European Union: Whose Law Is It Anyway? How Closely Aligned Is The Data Protection Directive With One-Stop-Shop?

The Google Spain case is most commonly recognised for introducing the 'right to be forgotten'. However, the judgment has had a more subtle but no less significant side effect. The case also extended the territorial application of EU data protection law to entities located outside the EU but which have some presence – like a marketing subsidiary – in Europe. Following Google Spain, certain EU data protection authorities ("DPAs") have taken an aggressive interpretation of this aspect to the case. DPAs have argued that Google Spain should be read as meaning that a pan-EU business should be simultaneously subject to the data protection laws of all EU Member States where it – or one of its affiliates – has a presence, even if that in-country affiliate has little to do with data processing. This has led to conflicting interpretations as to which national data protection law applies to a single set of processing activities under the Data Protection Directive. Helpfully, this past week has seen clarifying views provided at both national and EU level.

What does the Directive say?

Article 4 of the Directive sets down rules for determining if EU data protection law applies – and, if so, which Member State's law should apply – to the processing of personal data. The CJEU tested the bounds of this first question in its Google Spain decision, where it addressed the territorial reach of EU data protection law under Article 4. The CJEU found that an "inextricable link" existed between the Spanish and US entities, despite the fact that Google Spain did not actually process personal data related to Google Search. This permitted the CJEU to bridge a perceived "gap" in protection and apply EU (in that case, Spanish) data protection law to the US-based Google, Inc.

However, another significant rule flows from Article 4 – that addressing a 'conflict of laws' scenario. This applies to a situation where more than one Member State's national law has the potential to apply to a particular instance of data processing. Article 4(1)(a) states that:

"... when the same controller is established on the territory of several Member States, he must take the necessary measures to ensure that each of these establishments complies with the obligations laid down by the national law applicable ..."

What is the issue?

The precise intention behind this text has, over the past few years, served as an ever increasing point of contention in EU data protection law. One view is that the law of the Member State where the controller is principally established should apply, even where the controller is found to be established in other Member States. The competing view, however, is that each establishment of a controller must separately comply with the data protection rules of the Member State in which it is based.

A regulatory race

DPAs, in particular, have sought to leverage this language in order to re-regulate controllers that are already subject to another DPA's and Member State's oversight. Recently, the Article 29 Working Party ("WP29") – the collective body of DPAs – published an updated Opinion 08/2010 on applicable law in light of Google Spain.  In particular, WP29 changed its views on which Member State's data protection laws are to apply in cases where companies have several establishments across the EU. In the Opinion, WP29 admits that the "baselines provided by the Directive ... still provide a relatively high level of protection". However, it argues that, because there is not full harmonisation of data protection law, companies must comply with local laws of each Member State in which it has a presence to the extent that the EU headquarters carries out processing in the context of the relevant local entity. This is an about face from the original Opinion of WP29 on this topic which stated that the location of the EU headquarters or centre of operations determines the applicable law, despite the presence of commercial offices in other Member States.

Clarity provided

Last week, the Hamburg Administrative Court (the "Hamburg Court") handed down a decision, suspending an order of the Hamburg DPA which had challenged Facebook's 'real name' policy. The Hamburg DPA had argued that German national data protection law should apply to Facebook, and that users should be able to create profiles with pseudonymous (made-up) names. Despite Facebook's headquarters being located in Ireland, the Hamburg DPA tried to lean on the existence of Facebook Germany's offices as a means to apply German law. It is worth noting that the Hamburg DPA's case was based on a provision of German data protection law – the right to a pseudonymous online profile – that has no equivalent under EU or Irish rules.

When the Court analysed the matter of applicable law under Article 4(1), it concluded that German law was not applicable, despite the office of Facebook in Germany. The Hamburg Court first found that Facebook did have an establishment in an EU Member State (Ireland) and therefore a broad interpretation of the 'establishment test' was not justified. Distinguishing the CJEU's judgment in Google Spain, the Hamburg Court noted that there was no "gap" in protection to be bridged here but instead, there was a potential overlap of laws and regulation.

Where the controller has establishments in more than one Member State, the Hamburg Court indicated that the law of the state of the establishment with "the closest relationship" with the relevant data processing should be applicable. Given this, a case-by-case assessment must be undertaken. The Hamburg Court made it clear that if one of the establishments processes personal data as part of the activities of another primary establishment, then the data protection law of the Member State which hosts that primary establishment must apply. Because Facebook Ireland has the closest relationship with the relevant data processing, and not Facebook Germany, the Hamburg Court determined that German law was not applicable.

The Commission weighs in on inter-DPA cooperation

In parallel with the Hamburg Court's decision, the European Parliament recently published the European Commission's views on applicable data protection law. This arose in response to a German individual's petition to the Parliament on the handling of personal data by PayPal. One of his complaints was that the German regulatory authorities cannot supervise PayPal, which is headquartered in Luxembourg.

In its reply, the Commission said it was the role of national DPAs to address these issues. The Commission pointed to the Luxembourgish DPA as the competent regulator, given that the processing of the individual's data is carried out in the context of that establishment of the controller. This, again, supports the notion that the DPA of the Member State in which a controller's EU headquarters is based is most likely the competent regulator. Citing the Weltimmo case, the Commission added that the individual can submit a complaint to their local DPA, who in turn is obliged to cooperate with the competent DPA.

How do these decisions affect the interpretation of Article 4(1)?

This interpretation provided by the Hamburg Court is to be favoured because it is capable of avoiding a scenario in which cross border services must observe a multitude of different national data protection laws. At this point, it is worth remembering that the Data Protection Directive has two distinct purposes. First, it is designed to ensure an adequate level of protection of personal data. Second, it was intended to contribute to the building of the EU's Internal Market by removing a potential barrier to trade: overlapping and inconsistent national data protection rules that subject pan-EU businesses to re-regulation whenever they cross national borders.

The Hamburg Court found that there was no basis under EU law to justify the application of multiple data protection laws to the same processing activity – the Directive is intended to be uniform, Union-wide law, and it is both adequate and necessary that one instance of data processing is subject to the legal provisions of only one Member State. This significantly diverges from WP29's views that despite "relatively high level of protection" of the Directive's baseline, one must still comply with different national rules.

What does the future hold?

The most interesting facet of this debate is that the 'one-stop-shop' mechanism – which also addresses 'conflicts of law' scenarios – is a core component of the incoming data protection regime. The General Data Protection Regulation ("GDPR"), which is expected to formally replace the Directive in a little over 2 years' time, more closely reflects the views of the Commission and the Hamburg Court.

In essence, one-stop-shop seeks to regulate a company in the Member State where its EU headquarters or centre of control is based. That Member State's DPA is the "lead DPA". Other DPAs can act as "concerned" DPAs to the extent that the controller's activities affect individuals in their respective Member States.

Despite divergent views arising at DPA level, it appears that both national courts and EU institutions maintain a more pragmatic approach in relation to this conflict of laws issue. In any event, it is clear that the dual intentions of the Directive have sometimes been overlooked by DPAs when seeking to apply their own national law. It will be interesting to see whether DPAs modify their approach in light of these recent views. 

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.

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

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

Similar Articles
Relevancy Powered by MondaqAI
Mason Hayes & Curran
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Mason Hayes & Curran
Related Articles
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
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 (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

To Use 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.


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.


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