Hong Kong: Privacy Commissioner Publishes Octopus Investigation Report

Last Updated: 19 October 2010
Article by Sara S.M. Or and On Yee Tam
Most Read Contributor in Hong Kong, November 2017

Originally published 19 October 2010

Keywords: Hong Kong, PCO, Octopus, personal data, data protection principles, DPP

The Hong Kong Privacy Commissioner's Office (PCO) published the Octopus investigation report yesterday (18 October 2010). Whilst the PCO's findings on Octopus are based on the facts of that case, its recommendations impact all data users.

PCO Concludes that Octopus Contravened Data Protection Principles (DPP) - DPP1(1), DPP1(3) and DPP3

  1. Octopus collected excessive personal data, namely, the members' identification number (HKID Card/Passport/Birth Certificate) - in contravention of DPP1(1);
  2. Octopus failed to take all reasonably practicable steps to inform the members of the classes of transferees of their personal data having regard to the small print of the relevant wording on the application form, and its failure to identify the transferees with a reasonable degree of certainty (wording like "any person who is under a duty of confidentiality to Octopus" was found to be too liberal and vague and thus inadequate) - in contravention of DPP1(3); and
  3. Octopus sold the members' personal data to third parties for monetary gains without members' express consent - in contravention of DPP3.

Implications of PCO's Recommendations

PCO expressly recognises direct marketing as a normal business activity serving both data users and the consumers. PCO has no intention to restrain or curb direct marketing activities. In making recommendations, PCO is mindful of the need to (i) give practical guidance to data users on how to comply with the requirements under the Personal Data (Privacy) Ordinance (PDPO) in conducting direct marketing activities and (ii) better protect general public's data privacy.

PCO's recommendations focus mainly on collection and transfer of consumer personal data to unrelated third parties with the ultimate purpose of using them for direct marketing. These recommendations have far-reaching implications on data users. Key recommendations include:

  1. The HKSAR Government will soon put forth legislative proposals to amend the PDPO. The public and relevant parties should seriously debate and resolve:

    1. with respect to collection and use of data for direct marketing purposes, whether to replace the existing "opt-out" right of individuals under the PDPO by the "opt-in" right - PCO favours measures and controls moving in the direction of "opt-in";
    2. whether and how controls and penalties should be increased to ensure data users act according to the authorisation given by individuals - PCO favours greater controls and heavier penalties;
    3. whether and how new legislative safeguards should be introduced to regulate sale of personal data for direct marketing purposes (including making such sale without the individuals' express consent a criminal offence) - PCO favours new legislative provisions to regulate such sale; and
    4. whether the enforcement power of PCO under the PDPO should be strengthened to further enhance data privacy protection - PCO favours greater enforcement power;

  2. Data users should make personal information collection statements (PICS) more reader-friendly by using simple language, appropriate font size, highlights, key words and contrasts. Data users should present PICS in a conspicuous manner and offer help desk or enquiry service to help individuals understand the contents of the PICS;
  3. Data users should avoid liberal and vague terms in describing the purposes of use and classes of transferees of personal data. Data users should use language which will make it practicable for individuals to ascertain with a reasonable degree of certainty how their data will be used and shared;
  4. Data users should obtain individuals' express and voluntary consent before selling their data to third parties for monetary gains;
  5. Data users that possess a dominant position vis-a-vis individuals should not exploit their position in the collection and use of personal data. They should be mindful of their dominant position and exercise great care to ensure compliance of the requirements under the PDPO;
  6. Individuals should have the right to elect standard benefits only and confine collection and use of their data for purposes of enjoying those benefits, and declining collection and use of data for enjoying additional benefits or other purposes;
  7. Data users should not collect excessive data and should not collect sensitive data such as HKID Card number if less sensitive data would serve the objective. Data users should comply with the PCO's Code of Practice on the Identity Card Number and other Personal Identifiers in handling sensitive personal identifiers; and
  8. In addition to reiterating its existing requirements on cross-marketing activities, PCO recommends that data users should not allow their business partners to represent themselves as the data user in making marketing approaches to individuals.

On the same date of publishing the Report, PCO issued the "Guidance on the Collection and use of Personal Data in Direct Marketing". It replaces the existing Guidelines on Cold-Calling and Guidance Note on Cross-Marketing Activities.

Balancing Legitimate Commercial Activities and Data Privacy Protection

The Octopus incident focuses public's attention on use of personal data for direct marketing. When used appropriately, direct marketing and cross marketing activities can benefit consumers as well as business operators. As alluded in the PCO's Report, it is important to balance legitimate commercial activities and consumer data privacy protection. In particular, before imposing criminal liability, great care should be given to target specific, serious, intentional and culpable acts which should be clearly identified and defined under the PDPO. It is imperative that legislative changes reflect the balance and refrain from unintended interference with normal, legitimate commercial activities.

HKMA Commissions Audit on Octopus Cards Limited

Octopus Cards Limited (OCL) is a deposit-taking company supervised by the Hong Kong Monetary Authority (HKMA). OCL is required by HKMA under section 59(2) of the Banking Ordinance to submit an independent auditor report on the assessment of OCL's processes and practices for handling Octopus cardholders' data. HKMA published auditor's interim findings yesterday (18 October 2010). HKMA has sent a copy of the interim report to PCO and will consider necessary follow-up action after the final report is available. HKMA will require OCL to implement auditor's recommendations and monitor its progress in liaison with PCO. HKMA will also liaise with the banking industry to ensure that banks and other authorised institutions will follow the latest standards set by PCO.

Learn more about our Hong Kong office, Banking & Finance, Company Secretarial, Corporate Governance, Employment & Benefits, Financial Services Regulatory & Enforcement, Investment Management, Health Care, Hospitality & Leisure and Insurance & Reinsurance practices.

Visit us at www.mayerbrownjsm.com

Copyright 2010. JSM, Mayer Brown International LLP and/or Mayer Brown LLP. All rights reserved. Mayer Brown is a global legal services organization comprising legal practices that are separate entities ("Mayer Brown Practices"). The Mayer Brown Practices are: JSM, a Hong Kong partnership, and its associated entities in Asia; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; and Mayer Brown LLP, a limited liability partnership established in the United States. The Mayer Brown Practices are known as Mayer Brown JSM in Asia.

This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein. Please also read the JSM legal publications Disclaimer.

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.

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”

Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

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