European Union: GDPR - Data Protection As A Sword And A Shield

Last Updated: 20 July 2018
Article by Richard Field

Every day there is at least one headline concerning data protection and privacy. Whether it be a data breach, a jurisdiction introducing laws in response to the EU's General Data Protection Regulation (GDPR) or issues with technology, these are topics which are on everyone's radar in some form.

It was therefore a pleasure to be invited to speak about GDPR at the recent STEP conference in Guernsey, organised by the local branch of STEP and the GTA. Happily, there is no end of material where GDPR is concerned, but this time the presentation focused on using data protection as a sword and a shield, touching on a range of topical issues along the way. Privacy and data protection have always been important issues for trustees, but never more so than today.

Having covered matters such as the importance of data protection in today's global landscape and a number of the high profile cases such as Cambridge Analytica, Facebook and the confusion around "consent" emails, we moved on to look at the new regulatory landscape and scanned the horizon for the next key issues.

Using data protection as "a sword and a shield" is predominantly about taking a proactive, or conversely, reactive approach, depending upon the situation. It can also be used aggressively or defensively, though few would probably associate data protection with swords!

Sword

"Weaponising" your data to generate better intelligence on customers and more efficient marketing and servicing of those relationships is one example of that. Taking a proactive stance on information security and investigating best practice, using penetration testing and taking a robust stance is another.

One of the common themes we see is the uncertainty surrounding the correct lawful basis for processing personal data. Considering this in some detail and looking at the circumstances of the processing and the reasons for the information being obtained are both key steps to ensuring that you do not face issues further down the line. Not only does that approach demonstrate compliance (a key requirement under the new regime), but it means that your ability to process data lawfully is less likely to be challenged and/or interrupted.

Whilst the commercial aspects are still being settled, the requirement to have written provisions governing data protection in contracts with your suppliers is another opportunity to use data protection in a proactive and/or more aggressive fashion.

A recent survey by Island Global Research indicated that 88% of those surveyed across the Crown Dependencies thought that businesses could do more to protect their data. Regardless of the introduction of new legislation, market protection in contracts with your suppliers is another opportunity to use data protection in a proactive and/or more aggressive fashion.

A recent survey by Island Global Research indicated that 88% of those surveyed across the Crown Dependencies thought that businesses could do more to protect their data. Regardless of the introduction of new legislation, market forces are increasingly important in driving cultural and business change. Cambridge Analytica, the business embroiled in the recent Facebook/politicisation of data scandal collapsed under the weight of adverse reaction to its activities. Whilst the ICO's investigation is ongoing, the loss of its customer base was fatal.

In those circumstances, why would you not need to understand how a supplier processes personal data on your behalf? Having clear contractual provisions dealing with areas of responsibility, breach reporting and the sharing of data is crucial. The law is not intended as a barrier to commerce, but equally, in today's digital economy, complacency around information security generally is a high risk strategy, which may mean that some of your supply chain are outside your risk appetite.

Shield

Data protection is not simply about the physical act of securing the data, it covers the use of legal mechanisms to prevent unauthorised or speculative attempts to gain access to the data, demonstrating compliance to satisfy regulators and building trust with the ultimate clients.

Subject access requests (SARs) have been in place for many years, and whilst the new regime provides for enhanced rights for individuals, the fundamental position has not changed in this area. Nevertheless, a considered and rehearsed procedure for SARs means that not only will you ensure that you do not disclose more information than you are obliged to, but you may well be able to protect your/your client's position in any contentious situation.

Whilst regulators across the EU and beyond are grappling with the new requirements and the additional resourcing and practical issues they raise, it is helpful to note that the "collaboration" approach was reinforced at the launch of Guernsey's Data Protection Authority recently. However, there are requirements to evidence compliance, so to the extent you can use good practice, documentary records and training as tools for improving engagement and efficiency, they also provide a good "shield" as and when the regulator wants to know more about your procedures.

As mentioned above, one of the key factors in business relationships in a digital age is that of trust. By building a solid framework around information security and data protection, being able to demonstrate compliance and having effective technical measures in place, you'll be able to reassure the 88% that believe that businesses could do more to protect their data.

Polls

During the presentation, we ran two polls covering preparedness for the new regime and the areas attendees saw as their primary risks.

The first question asked how prepared people felt for the new regime. The results were:

1 – 0%

2 – 2%

3 – 27%

4 – 61%

5 – 11%

This shows a good level of engagement and builds upon the work that we and others across industry and government on the island have done in the previous few years in terms of raising awareness and advising on implementation.

The important point to note is that 25 May 2018 was a starting point, not the end goal – there will be plenty more to do and consider in the years to come! For those who are well advanced in this area, the changes should be more "evolution" than "revolution".

The second poll asked for views on the main risk areas:

Subject access request - 59%

Data breaches - 53%

Managing data as a trustee - 51%

Marketing data - 25%

Staff data - 12%

Regulatory oversight - 12%

Other (please identify) - 0%

There is clearly a concern that disgruntled customers, employees or interested third parties could cause significant management/staff time and cost issues if SARs are used frequently. Despite there being rumours that some institutions would be "flooded" with SARs, this has not proven to be the case (at least not locally). The right to make a SAR has long been in existence, but the awareness of the surrounding rights may be what drives a higher frequency of SARs. It is important to take appropriate advice where you are uncertain as to the approach or scope for a SAR, in order to reduce overall cost and time spent.

Data breaches are clearly a major concern, though the number was not as high as we'd anticipated. There have been a small number of breaches reported locally since the law came into force, but comparatively few compared to the ICO in the UK, which is reported to have received several thousand breach notifications in the few weeks since GDPR became enforceable. Not all breaches will result in a breach of the law, however and this is again something worth bearing in mind.

Finally, the peculiarities and nuances around managing data as a trustee were understandably at the forefront of the minds of the attendees. One of the many joys (if that is the right word) of dealing with data protection issues is that nearly every scenario is unique. There are inevitable overlaps which can form the basis of any advice, but considering the context is key. There are already significant challenges to being a trustee and many trustees are handling data protection issues very well already, not least as a consequence of the nature of the business. However, the increasing complexity of the international landscape and the globalisation of data makes "ringfencing" your data (or at least managing its distribution) a necessary time and cost investment.

We continue to run training for clients on all aspects of the new Guernsey regime and GDPR and similarly advise on these areas on a daily basis.

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.

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