Clark Sargent: Data protection compliance is increasing onerous on all businesses, now that we are getting closer to a finalised set of EU data protection regulations I'm talking to Peter Hall, a partner in our Commercial, IT and Outsourcing team on the impact of those proposed regulations.
Peter we have been promised these new regulations for a long time so where are we now on timescale?
Peter Hall: Well somewhere near the end of the process hopefully. So after four years of waiting and debate, we think the final regulations will be with us in about the next two to three months. Our insiders at the ICO suggest probably around June this year as a possible final date, so we're, we're pretty close.
Clark: Ok, and when they come through what are we expecting for data processors?
Peter: Ok so major change for data processors. So under the current law data processors are not regulated, under the new laws they will be, and there are two aspects to this. If you are a data processor, say for example, providing services involving personal data processing within the EU then you will be directly regulated and in addition to that if you're a data processor outside of the EU you may under certain circumstances also be regulated, so a major change for data processors.
Clark: So things are changing for data processors outside the EEA...
Peter: They are.
Clark: ...but what else is changing outside of the EEA?
Peter: So, the new regulations will reach outside of the EEA in a more general way in that if you're a data controller selling to data subjects in the EU or monitoring data subjects in the EU then you're also going to be regulated, even if you are doing that from outside of the EU, which is, which is a major change. The law on that is quite unclear. What you're also going to have to do if you are falling into that category, a non-EU data controller, you're going to have to appoint a representative in the member states where the data subjects are based. This is all still subject to a lot of clarification I have to say.
Clark: That's, quite a new imposition isn't it?
Peter: Very much so brand new - yep.
Clark: Peter, if things go wrong on this are the fines going to be as hard as we thought they might be?
Peter: They are Clark. So quite a lot of publicity around this over the last well four years. So where we've settled now on the latest regulations is two levels of fines. The top level is four percent of worldwide turnover or 20 million euros whichever's higher. The lower limit is two percent or ten million euros, whichever is higher. So, compared with the half a million pound limit that the ICO's currently got in the UK, that's a significant increase. If you look at what is covered by each level of fines there's a list within the regulations and the bad news is the top level of fines covers a hell of a lot of core compliance issues including for example data export, so the fines are quite a significant issue really.
Clark: A lot of money at stake.
Peter: It is yeah.
Clark: There's quite a lot of change going on there for people to manage.
Clark: What are the things that are staying the same?
Peter: Ok so the good news is despite all of the concerns around the level of changes, much of the law is actually reflecting current law. So for example if you look at the guts of the law which is the eight data protection principles we currently have, those are largely reflected in the new regulations. You're actually having a reduction in the number of principles down to six. Those look very similar to the current principles. So if you view those as the backbone of the law, that isn't changing too much so, as I say, businesses which are currently good at data protection management and compliance should be largely compliant under the new regulations.
Clark: And looking at that issue about what's changing and what's not, what about issues around consent?
Peter: Ok so again consent isn't changing hugely it's just more onus on it. So consent is seen as a trump card for compliance really so if you can achieve data subject consent that is the way in which the European Commission would like you to be compliant. There are other ways of being compliant with fair and lawful processing. Probably the main thing to, to flag on consent is there is an onus on you to show consent, and that you really are going to have a burden of proof to show you've got it in some sort of active means. So, the way in which people have actually slightly fudged it in terms of getting consent in the past probably you're going to have to be much clearer on actually obtaining consent from data subject.
Clark: And we've heard a lot about the right to be forgotten.
Clark: What's the implications of that for organisations under the new regs?
Peter: Ok so, so the good news is we sort of already have a right to be forgotten since the Google Spain case and we have a right of data erasure already, and the other good news is they've actually watered down this so called right to be forgotten under the new regulations to some extent. So although there's a new right for data subjects in theory to be able to go to data control and say I want you to wipe out everything for me, there are some provisions in the new regulations which allow data controllers to say hang on a minute we don't need to get rid of everything because we, we might need to be able to hang on to some of that data. So it's not, it's not quite as drastic a change as we thought it might be.
Clark: And what about the new right to restrict?
Peter: Yeah that's a strange one I think. So they've introduced this thing called a right to restrict which is a completely new data subject right and what that does, it enables data subjects to say to a data controller, hang on a minute, I think there's some inaccuracy in my data I want you to flag that bit of data and suspend using it until we've sorted out verifying whether it's right or not. Which is a slightly odd concept of sort of putting that data into limbo and we, we need to think through the practicalities of that and how that might impact on data controls, because that is a new right.
Clark: And the way it will work if there are breaches, what are the reporting requirements there? Is it all mandatory?
Peter: Ok, so currently within Europe there's no mandatory laws requiring you to report to regulators data breachers in comparison to some other jurisdictions. There's obviously a voluntary regime in the UK at the moment with the ICO. There will be a mandatory regime under the new regulations. The baseline for reporting is 72 hours from breach or when you should have known about the breach, so that's quite onerous. There are some ways in which you can wiggle your way around that but I think you should treat that as the timeline you should be reporting and that's going to put a lot of pressure on people if there has been a data breach, because in my experience it takes quite a while to sort out all of the facts, and you're going to have to provide quite a lot of facts for regulators as well.
Clark: And under those kind of time pressures and, and these new obligations, what's our thinking on whether organisations are now really going to have to have a Data Protection Officer (DPO)?
Peter: So again this has been an area of regulations which has been somewhat watered down so, under the new regulations if your core activities are around data processing and you are processing a large amount of personal data or you are handling a large amount of sensitive personal data you are going to be under an obligation to appoint a Data Protection Officer. I would say actually most businesses of any great size should be looking at appointing a Data Protection Officer anyway because of the scale of compliance required under the new regulations. I think it makes sense to have somebody within your organisation handling all of that. So even if you're not strictly required to do so under the new regulations our advice is appoint a DPO and probably do it early because we're not sure there's an unenduring supply of people out there who can actually do that role.
Clark: This is a be safe don't be sorry after the event.
Peter: Yes, yes and really prepare now.
Clark: And just good corporate management really.
Peter: I think given the importance, not just of data protection compliance but the handling of information generally within organisations now having a DPO is probably a good idea anyway.
Clark: Peter thank you for all of that. What are the top tips for general counsel to take away from this?
Peter: Ok so we probably covered some of these already but I would be saying top of the list, look at whether you should appoint a data protection officer. Even if you're not strictly required to do so under the new regs I think the level of compliance it will be a good idea and given the importance of information management within businesses now having a DPO in place is a good idea. I would do that soon cause I'm not sure there's a never ending supply of people who are qualified to do that role. The second thing would be, depending on where you are on the scale of compliance, whether you think you're good, bad or indifferent, I would certainly be reviewing processes, policies may be you're thinking of doing another fresh audit if you haven't done one recently and just coming to, getting an idea of where you are on that compliance scale already and judging that against where you should be on the new regulations. And then finally, I guess if you are falling into the category of this is new territory like you're a data processor you've obviously got a much broader programme to deal with in terms of being self compliant.
Clark: Peter, thank you very much.
Peter: You're welcome.
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