Australia: Watching the Watchman – Full Federal Court rejects Australian Privacy Commissioners stance on metadata

The Full Federal Court1 has dismissed the Privacy Commissioner's appeal of a decision by the Administrative Appeals Tribunal which held that certain telecommunications metadata generated by Telstra did not constitute Personal Information under the Privacy Act.

In this article, we analyse what the Full Federal Court's judgment says about metadata regulation in Australia, and what it doesn't. To jump to our key takeaway points, click here.

BACKGROUND TO THE DISPUTE

The case involved a dispute between the Australian Privacy Commissioner and Telstra Corporation (Australia's largest telco) over whether certain mobile network data (including IP addresses and URL data) held by Telstra constituted 'personal information' under the Privacy Act.

In December 2015, the Administrative Appeals Tribunal (AAT) held in favour of Telstra (see our previous case note here), and shortly thereafter the Commissioner appealed the AAT decision to the Full Federal Court.

The Commissioner's grounds for appeal focused on disputing the two-step test that the AAT had used when applying the Privacy Act's definition of 'personal information' to the metadata in question:

  • The AAT had held that the first step requirement was to first establish that the metadata was information 'about an individual' (as opposed to being 'about' something else). The question of whether the information could be used to reasonably identify an individual could only be considered if this initial threshold requirement was met.
  • The Commissioner disagreed with this 'two-step' test, and argued that the proper test for 'personal information' should focus on the potential for identification rather than the subject matter of the data.

THE FULL FEDERAL COURT'S DECISION

The Full Federal Court dismissed the Commissioner's appeal on all grounds (with costs).

The Court held that the AAT's 'two-step' test was supported by the wording of the Privacy Act, which defined 'personal information' in section 6(1) as:

"information or an opinion (including information or an opinion forming part of a database), whether true or not, and whether recorded in a material form or not, about an individual whose identity is apparent, or can reasonably be ascertained, from the information or opinion" (emphasis added).2

The Commissioner argued that the words 'about an individual' were effectively redundant, and should be read as part of the broader phrase 'about an individual whose identity is apparent, or can be reasonably ascertained.'

The Court rejected this analysis, and instead held that the words 'about an individual' were intended to "direct attention to the need for the individual to be a subject matter of the information or opinion".3 The Court affirmed the AAT's finding that the test involved two discrete steps – first, determining that the subject matter of the data was an individual, and only then considering whether the individual's identity could be reasonably ascertained.

Due to the limited grounds of appeal (which focused on the correct formulation of the test), the Court was not required to rule on whether any of the metadata in dispute actually constituted 'personal information' and the AAT's findings on these matters continue to stand.

By way of recap, the AAT held that neither the mobile network data generated by the customer's calls and text messages, nor the IP addresses assigned to the customer's mobile device when accessing the Internet, constituted 'personal information'.

APPLYING THE NEW 'TWO-STEP' TEST

While the Court declined to provide a view on whether the metadata in dispute would constitute 'personal information', the Court did set out some guidance on how the 'two-step' test for personal information should be applied.

Specifically, the Court noted the following:4

  • both limbs of the test (i.e. 'about an individual' and 'reasonably identifiable') require 'an evaluative conclusion, depending on the facts of any individual case';
  • data and information may have more than one subject matter, and the individual only needs to be one of those subject matters in order to satisfy the 'about an individual' limb of the test; and
  • the data or information in question may be considered individually or in combination with other items of data or information when considering whether the "about an individual" requirement is satisfied.

Interestingly, the Court suggested that data such as certain information about a customer's mobile handset and network type (e.g. 3G or 4G) would not satisfy the 'about an individual' / 'subject matter' test.

The Court also noted the AAT's findings in relation to Telstra's mobile network data and IP address records, but did not comment on them other than to note that these findings were not challenged by the Commissioner on the appeal.

The Court did not elaborate on how the second limb of the test (which considers whether the individual is identifiable) will be applied. The AAT decision includes some discussion of the 'identifiability' limb, which is summarised in our case note on that decision.

WHAT ABOUT THE 2014 AMENDMENTS TO THE PRIVACY ACT?

Due to the timeline of the matter, the case was decided under the former version of the Privacy Act that applied until March 2014. Relevantly, the definition of 'personal information' was amended in March 2014, and now reads:

"information or an opinion about an identified individual, or an individual who is reasonably identifiable: (a) whether the information or opinion is true or not; and (b) whether the information or opinion is recorded in material form or not (emphasis added)."

The Court did not give any indication as to whether the interpolation of the word 'identified' in the phrase 'about an individual' will have any substantive impact on the formulation of the applicable test.

However, we think that the Full Federal Court's decision would likely be highly persuasive (even if not strictly binding) in the event that this issue is litigated again. The key features of the drafting that were emphasised by the Court (such as the repetition of the words 'about an individual' in the wording of the privacy principles) continue to apply in the current Privacy Act.

WHERE DOES THIS LEAVE US?

The decision has obvious ramifications for the regulation of metadata in Australia, but it also sets down some important markers for the way in which Australian courts will construe the limits of the Privacy Commissioner's jurisdiction under the Privacy Act 1988 (Cth).

At the time of writing this article, the Commissioner has not announced whether he intends to appeal the Full Federal Court's decision. Assuming that the decision is allowed to stand (or is affirmed on appeal), we see five key takeaways:

  1. This is not the end of the discussion on metadata.

The Full Federal Court's decision does not, as some reports have suggested, categorically exclude metadata such as IP addresses and URLs from being regulated as personal information under any circumstances.

The AAT's finding that the mobile network data was not 'personal information' was based on technical evidence regarding the architecture and function of Telstra's mobile network database. It is possible that metadata generated in systems that are architected in a different way (e.g. in a way that creates a clearer association between data points and individual data subjects) could still be captured as 'personal information.'

The Court made it clear that the test must be applied on a case-by-case basis, and that the Commissioner is required to make an 'an evaluative conclusion' when applying the test. This gives the Commissioner some scope to exercise discretion, subject to the general parameters imposed by administrative review.

  1. An incentive to implement Privacy By Design (but not necessarily the one that the Commissioner wanted).

The Full Federal Court's decision gives businesses further clarity regarding the 'goalposts' for architecting their systems and databases to minimise their exposure to regulatory obligations under the Privacy Act. This may actually serve as an incentive for businesses to conduct appropriate privacy and technical due diligence (such as Privacy Impact Assessments) at the outset of technology projects to inform decisions on system design.

  1. New challenges for cross-border arrangements.

The Full Federal Court's decision runs contrary to the trend in other jurisdictions for greater regulation of telecommunications metadata (such as cookie and IP address data).5

The Full Federal Court made it clear that the Privacy Act will be interpreted as a domestic piece of legislation, and that overseas case law will be of limited relevance – even where such legislation derives from common international instruments such as the OECD Privacy Principles.

It remains to be seen what impact the Full Federal Court's decision will have on cross-border data transfers. However, the decision does serve as a clear reminder that Australian privacy law requirements must be considered individually, and that international harmonisation on privacy issues (such as metadata) cannot be assumed.

  1. A reminder of the statutory limits of the Commissioner's jurisdiction.

While it's difficult to fault the Court's application of established statutory interpretation principles to the Privacy Act, the practical outcome of this decision will undoubtedly pose some challenges for the Commissioner in managing his response to developments such as the Internet of Things and the increasing sophistication of online tracking and data analytics.

Adding the second limb to the 'personal information' test will give companies more grounds to resist the Commissioner when he asserts jurisdiction, and the Court's 'black letter' approach towards construing the Commissioner's jurisdiction could result in the Commissioner adopting a more conservative approach towards emerging or 'borderline' privacy issues.

Given the increasing profile and importance of these 'emerging' issues (and the absence of any other Australian regulator with clear jurisdiction), it would not be out of the question for the Commissioner to pursue a further appeal of this decision to the High Court.

  1. Time for a more specific legislative response to new technologies?

This decision may also serve to highlight the gap between the general public's expectations regarding the Commissioner's role, and the technical limits of his jurisdiction under the Privacy Act.

This gap can be seen in the Full Federal Court's response to the amicus brief that was filed by the New South Wales Council for Civil Liberties as part of the appeal. The brief discussed a range of emerging technology issues that have been the cause of public concern in Australia (such as database aggregation and data linking), but the Court ultimately gave very little weight to the brief and noted that it was "unclear how any of those matters...had any bearing on the issues raised in this appeal."

It is interesting to note that the ACMA has been vocal in recent years about the need to restructure Australia's media and communications regulatory framework to accommodate new technologies and address convergence pressures.6

The Full Federal Court's decision could lead to similar calls for a review of the Privacy Commissioner's role (or some other form of specific legislative response to the privacy challenges raised by new technologies).

Footnotes

1 Privacy Commissioner v Telstra Corporation Ltd [2017] FCAFC 4

2 The Privacy Act's definition of "personal information" was amended in March 2014 as part of the amendments that replaced the National Privacy Principle regime with the current Australian Privacy Principle regime.

3 Privacy Commissioner v Telstra Corporation Ltd [2017] FCAFC 4 at [62]. The Court also noted that the words "about an individual" were repeated in the text of NPP 6.1, which weighed against the Commissioner's argument that they had no independent content of their own.

4 Ibid at [63].

5 For example, note the EU Court of Justice decision in Case 582/14 – Patrick Breyer v Germany, which held that dynamic IP addresses constituted personal information.

6 See for example the ACMA's 2013 report, "Broken Concepts".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Chambers Asia Pacific Awards 2016 Winner – Australia
Client Service Award
Employer of Choice for Gender Equality (WGEA)

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Bartier Perry
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Bartier Perry
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions