European Union: Brave New Data World: Radical Overhaul Of EU Data Protection Laws

Last Updated: 2 February 2012
Article by Vanessa Barnett

The European Commission has published details of a radical overhaul to EU data protection laws. The plans give sweeping new rights to citizens and impact all businesses, particularly those online. This is a significant 'once in a generation' change of the law.

"Rapid technological developments and globalisation have brought new challenges for data protection. With social networking sites, cloud computing, location-based services and smart-cards, we leave digital traces with every move we make. In this new 'brave new data world' we need a robust set of rules. The EU's data protection reform will make sure our rules are future-proof and fit for the digital age."

(EU Factsheet: Why do we need data protection reform?)

The key proposals include:

  • requirement that, where consent is required, it must be given by individuals explicitly (rather than 'assumed' consent as currently possible);
  • providing easier access for individuals to their data, along with a mechanisms to transfer data (e.g. porting to a different social network);
  • establishing a 'right to be forgotten' which lets individuals request social networking sites and others delete their data completely (if there are no legitimate reasons for keeping it);
  • requiring data controllers to notify the authorities and individuals 'without undue delay' (24 hours, where feasible) of instances where personal data has been accidentally or unlawfully destroyed, lost, altered or hacked;
  • implementing 'proportionate and dissuasive' sanctions on data processors, up to the greater of €1 million or 2% of the global annual turnover for serious violations (such as processing personal data without consent);
  • allowing individuals to report breaches or violations to the data protection to the data protection authority in their country, rather than in the country in which the data processor is established (even where data is processed by an organisation based outside the EU);
  • removing the general notification requirements contained in the 1995 Directive, with emphasis placed on the responsibility and accountability of businesses themselves (for example, with the requirement that businesses with 250+ employees must appoint a data protection officer);
  • establishing protection for individuals whose personal data is transferred within a company but outside of the EU (e.g. using binding corporate rules)

At their heart, these reforms seek to implement a single set of rules applicable across the EU to replace the patchwork of differing (and sometimes conflicting) national rules in the 27 Member States. In essence the proposals aim to establish a 'one stop shop' of EU data protection regulation, with one set of rules and one responsible data protection authority (being the national authority in the Member State in which the company has its main establishment).

The Commission believe that this will cut red tape, save businesses money and increase efficiency. But we anticipate there will be sacrifices along the way to achieve this 'brave new data world', including:

  • costs of implementation may be significant, depending on the design of any online service and the sheer amount of work needing to be done to audit and comply; and
  • costs of transparency may see a 'flight to security' by citizens, which may make it harder for growth businesses to gain a foothold in the online market (although, done well, transparency will be a customer care bonus)

The European Commission's proposals will now fall to be considered by the European Parliament and the European Council (the latter sitting in working groups comprising officials and national experts) for the First and Second Reading stages, during which amendments can be proposed by the Parliament. The Commission have pledged to 'work closely' with the European Parliament and Council to ensure agreement to the framework through these stages by the end of 2012. If the framework is agreed, this will then be put to the Conciliation Committee comprising a representative from each Member State, before finally going back before the Parliament and Council to approve the text. This is a lengthy process and, even with an easy passage through the EU, it certainly looks likely to be 2013 (or beyond) before the proposal will become law.

Even given this timetable, now is the time to get involved and start planning for privacy by design.

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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Vanessa Barnett
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