Perhaps the element of the General Data Protection Regulation ('GDPR') that has garnered the most attention so far is the area of sanctions. Currently under the Data Protection Acts 1988 and 2003 ('DPAs') and the ePrivacy Regulations (SI 336 of 2011), the number of criminal offences in data protection law is relatively low. Further, while the possibility of personal criminal liability for company officers exists, such prosecutions have been rare. This may be set to change once the GDPR becomes law, which is now expected to be in mid-to-late 2018.
Current offences under the DPAs
The DPAs contain a small number of offences relating principally to registration issues or obstructing or failing to comply with an investigation or sanctions notice issued by the Office of the Data Protection Commissioner ('ODPC'). In addition, there are offences in Sections 21 and 22 relating to the processing or disclosure of personal data without the authority of the data controller. Under Section 31 of the DPAs, the maximum fine on summary conviction of such an offence is €3,000. For convictions on indictment, the maximum penalty is a fine of €100,000.
Section 29 of the DPAs provide that in the case of a body corporate, an offence may be attributed to 'a director, manager, secretary or other office of that body corporate, or a person who was purporting to act in any such capacity' as well as the body corporate itself. In 2014, M.C.K. Rentals Limited was charged with 23 counts of breaches of Section 22 of the DPA and, in the first case of its kind, two directors of the company were also charged with 23 breaches of Section 29. Each director pleaded guilty to one sample charge and they were fined €1,500 each.
Offences and sanctions under the ePrivacy Regulations
The ePrivacy Regulations include a larger range of criminal offences than in the DPAs. Outside of the specialist offences relating to communications service providers, the most common prosecutions have related to unsolicited phone calls and sending unsolicited marketing messages to individuals by fax, SMS, email or automated dialling machine.
Fines under the ePrivacy Regulations can be extensive. For example, a fine of up to €5,000 on summary conviction is possible with each unsolicited communication/call constituting a separate offence. Summary prosecutions by the ODPC under the ePrivacy Regulations are frequent, but to date there have been no convictions on indictment (which carry a fine of up to €250,000).
As with the DPAs, Section 25 of the ePrivacy Regulations provides that if an offence is committed by a body corporate with the consent or connivance of, or is attributed to the neglect by, an officer of that body corporate, that officer is liable for a separate offence and is liable to be proceeded against and punished as if that person had committed the first mentioned offence. Section 25(2) of the ePrivacy Regulations states that an officer of the body corporate may be preceded against whether or not the body corporate in question has been proceeded against in respect of such offence. I am not aware of any personal convictions against company officers under the ePrivacy Regulations.
Sanctions under the GDPR
The GDPR will replace the sanctions regime in the DPAs.
The GDPR provides for large fines in respect of a broad range of prescribed offences.
It is intended that the fines regime should be 'effective, proportionate and dissuasive', so actual fines will depend on the circumstances of each individual case. However, fines can be imposed in addition to, or instead of, warnings, reprimands, compliance orders, bans on processing or the rectification, restriction of data and the notification of such actions to data recipients.
The GDPR provides for two levels of fines:
- fines of up to €10,000,000 or, in the case of an undertaking, up to 2% of the total worldwide annual turnover of the preceding financial year, whichever is higher; or
- fines of up to €20,000,000 or 4% of turnover.
There are two aspects of the regime that particularly stick out. First, the size of the fines available to Data Protection Supervisory Authorities far exceeds anything that currently exists within data protection law. Comparisons are drawn with the competition law regime, where massive fines for cartel activity or dominance abuse have been a feature for a long time.
The second aspect is the very broad range of activities that could attract a fine. For example, the GDPR provides for fines of up to €10,000,000 or 2% of worldwide turnover where:
- appropriate consent is not received from children;
- security measures are inadequate;
- non-EU controllers or processors fail to appoint a representative within the EU;
- a controller uses a processor who does not meet the standards laid down in the GDPR;
- record keeping does not meet the new GDPR requirements;
- there has been non-cooperation with a Supervisory Authority;
- there has been a failure to notify a personal data breach under the new reporting regime;
- there has been a failure to conduct a data protection impact assessment where the processing is likely to result in a high risk to the rights and freedoms of individuals;
- there has been a failure to appoint a Data Protection Officer.
The higher fine threshold of up to €20,000,000 or 4% of annual turnover can apply in the following nonexhaustive examples:
- failure to meet the core principles for processing such as legal, fair, limited and secure processing arising out of consent, contract or the protection of vital public or private interests;
- processing special categories of data in breach of the specific rules governing the likes of personal data revealing racial or ethnic origin, sexual life, political opinions, religious or philosophical beliefs, trade-union membership, and the processing of genetic or biometric data;
- the rights of data subjects are breached. This includes the right of the data subject to clear information regarding their rights, the right to access their data, the right to rectification of inaccurate data without undue delay, the right to be forgotten, the right to object and the right not to be subject to a decision based solely on automated processing including profiling where this produces legal effects (subject to certain exceptions); and
- transferring personal data to third countries which do not provide adequate protection and safeguards.
Mitigating factors under the GDPR
In mitigating the amount of a fine that will be awarded against a processor or controller, regard will be had to the following:
- the nature, gravity and duration of the infringement;
- the scope or purpose of the processing;
- the number of data subjects affected and the damaged suffered;
- the intentional or negligent character of the infringement;
- any action taken by the controller
- or processor to mitigate the damage suffered by data subjects;
- relevant previous infringements;
- co-operation with the supervisory authority in remedying infringement and mitigating damage;
- the categories of data affected;
- whether the controller notified the supervisory authority of the infringement;
- adherence to approved codes of conduct and certification mechanisms; and
- any other aggravating or mitigating factor applicable to the circumstances of the case, such as financial benefits gained, or losses avoided, directly or indirectly, from the infringement.
Personal liability under GDPR?
Various provisions of the GDPR state that Member States may impose criminal sanctions for infringements of the Regulation, including in respect of infringements of national rules adopted under the Regulation.
The Introduction to the GDPR text notes that national law should prescribe a system of 'effective, proportionate and dissuasive' penalties, whether these be criminal or administrative. Hence it is open to the Irish legislature to introduce implementing legislation which will serve to broaden the scope of the sanctions regime in the GDPR. Typically, domestic legislation which includes criminal sanctions would include the type of personal liability provisions we have seen in the DPA and the ePrivacy Regulations which are referred to above.
It will be interesting to see if Ireland chooses to apply that personal liability model in the context of its GDPR implementation. It will be equally interesting to see if other EU Member States seek to enhance or extend the potential administrative or criminal sanctions regime as set out in the GDPR, or whether in fact the sanctions regime will be properly harmonised.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.