UK: Pseudonymisation: The Benefits And Getting Regulation Right

Last Updated: 17 March 2014
Article by Victoria Hordern

Article first appeared in E-Commerce Law & Policy - February 2014

Pseudonymisation bridges the gap between personal and anonymous data, being personal data under EU law but data that is at least difficult to link to a particular individual. The use of this type of data has, according to proponents, multiple benefits, but in the context of the draft EU Data Protection Regulation, the regulatory landscape for pseudonymisation is not yet fully decided. Victoria Hordern, Legal Director at Field Fisher Waterhouse LLP, describes the debate around regulating pseudonymisation, and argues that to disproportionally burden businesses seeking to properly use this kind of data could be counterproductive.

Using a pseudonym has come a long way since Currer, Ellis and Acton Bell. Although, to some extent, the principle hasn't changed. The Brontë sisters didn't want to be immediately identified as Charlotte, Emily and Anne when they published their first book of poems just as those using pseudonymising technology today don't want to identify the individuals within the data. Such organisations are not so much interested in actual individuals (their names etc.) but in human behaviour and patterns. So organisations involved in medical and social research typically collect pseudonymised data in order to pioneer new techniques to prevent diseases and understand behavior and not to assess the circumstances of particular individuals. The fraud prevention and online advertising industries also significantly rely on the use of pseudonymous data to carry out their data processing activities and provide services to clients.

But what exactly is pseudonymisation? It's certainly not a new legal concept in the EU as it's already recognised under German law where the concept of pseudonymisation or aliasing means replacing the individual's name and other identifying features with another identifier in order to make it impossible or extremely difficult to identify the individual. But although it already exists under German law it has provoked warm debate as part of discussions around the draft EU Data Protection Regulation.

Most people think of pseudonymous data as a third category of data. You have (i) personal data, (ii) anonymous data and then (iii) pseudonymous data. Personal data is what it is (and we're not going to get stuck into that debate here) and anonymous data cannot be personal data. But pseudonymous data bridges both concepts. So it is personal data (due to the broad definition of personal data under EU law) and yet it's not possible (or it is at least extremely difficult) to link or identify the data with the particular individual to whom the data relates. Consequently, there's a strong argument that the risk of a privacy intrusive action impacting the individual is considerably lower.

Using pseudonymous data is commonplace for online businesses, who remove data such as an IP address, which can single out a person, and replace it with a machine-generated identifier. However, technology being what it is, even this activity does not guarantee non-identifiability. Increasingly the power of technology allows disparate data which does not include identifiers to be linked up so that identities can be revealed. It's all about how granular the data gets and how turbo-charged the algorithms are that make connections. And yet it's possible to mitigate some of the risks of this occurring by instilling functionality, regular checks and processes so that the likelihood of identification across a big pool of data is reduced.

There is widespread industry support for pseudonymisation given that it can help to minimize privacy risks and therefore reduce the potential for non-compliance. Furthermore the availability of pseudonymisation techniques can encourage greater innovation. Data-rich organisations can crunch big data without the added risk of using identifiable personal data.

Pseudonymisation also benefits individuals. If you don't want to reveal your full identity online, you can retain a degree of anonymity. Additionally, an organization deploying pseudonymisation is restricted according to the types of data it can collect thus reducing the risk of privacy intrusiveness for individuals. One way for an organisation to demonstrate that it is serious about the privacy implications for individuals is to use pseudonymisation.

If there are clear industry and individual benefits to pseudonymisation, surely the regulatory landscape should incentivise its use? In other words, it should be easier not harder for organisations to use pseudonymous data. Regulation of pseudonymous data should therefore be pragmatic and not unduly restrictive. Which leads us back to the draft EU Data Protection Regulation and the proposed amendments to regulate pseudonymous data.

The original EU Commission's January 2012 draft of the Data Protection Regulation did not actually include a reference to pseudonymous data. It was introduced by the rapporteur for the EU Parliament's Civil Liberties, Justice and Home Affairs (LIBE) Committee whose draft report on the amendments was published in December 2012. Suddenly pseudonymous data appeared as a defined concept on the EU-wide regulatory landscape and the proposal was to regulate it with the full force of data protection legislation. Some in the scientific community were duly alarmed that these amendments would prevent or seriously impair scientific research studies due to the increased regulatory burden. They emphasised that the use of pseudonymised data in scientific research should be regulated proportionately.

Subsequently the EU Parliament's LIBE Committee voted on a compromise draft text of the Regulation in October 2013 where the definition of pseudonymous data is now'personal data that cannot be attributed to a specific data subject without the use of additional information, as long as such additional information is kept separately and subject to technical and organisational measures to ensure non-attribution.' This partly echoes the view of the European Data Protection Supervisor (EDPS) who has stated his preference for a definition of pseudonymous data that builds on the blocks of (i) information relating to a natural person who can be identified directly or indirectly, (ii) the means that may be used to identify the person are effectively separated from the data, and (iii) the identification by unauthorized persons is effectively prevented.

Significantly whereas the EDPS warns against the exemption of pseudonymous data from core data protection principles, the LIBE's October 2013 text allows that if the controller is unable to comply with a provision of the Regulation because the controller is processing pseudonymous data, the controller is not obliged to comply with that particular provision (this point may be tweaked given that the President of the Council's latest comments on pseudonymisation indicate that a controller cannot refuse to honour an individual's rights where the individual himself provides the additional information enabling identification). Additionally, the October 2013 text includes a new recital stating that profiling based solely on pseudonymous data processing is presumed not to significantly affect the interests, rights or freedoms of the individual and as such, by implication, an organisation can rely on the legitimate interest ground to process that data. The October 2013 text therefore marks a more flexible approach towards pseudonymisation than has been seen so far. This has prompted some privacy activists to argue that the safeguards are insufficient while, on the other hand, some in the online advertising industry still consider this latest draft to be unworkable in its current form and lacking legal certainty.

One hopes that within the trilogue (the informal discussions between the EU Parliament, Council and Commission about the proposed legislation), the EU institutions retain some perspective. Regulation should be proportionate to the potential risk. Although re-identification from pseudonymous data may be technically possible, where robust operational and contractual conditions have been established to minimise the opportunity of reidentification this should be acknowledged and incentivised. It would be counterproductive for the law to impose disproportionate burdens on organisations using data in a way that poses a very limited risk of privacy  intrusiveness.

EU Commissioner Neelie Kroes appears to appreciate this argument. She recently gave her backing to organisations that wish to rely on legitimate interest rather than consent when using pseudonymised data. In her view, legitimate interest should be the available ground for processing pseudonymous data so long as organisations remain accountable and still ensure that their internal processes and risk assessments comply with the guiding principles of data protection law. Big data proponents will further argue that where an organisation analyses pseudonymous data to draw out trends and there is no detrimental impact on individuals or intention to single someone out, it is disproportionate to require an organisation to comply with the full remit of data protection compliance obligations. Clearly a balance will need to be struck in order for big data processing to be incentivised under EU rules.

Neelie Kroes may be receptive to these arguments but it remains to be seen whether other key movers in the trilogue negotiations will accord pseudonymous data a lighter-touch regulatory approach. But, in any event, technology marches on even if the timetable for the new Regulation is now delayed. Pseudonymous data will become more and more widely used and therefore providing a proportionate, flexible, though privacy conscious, framework for the use of this third category of data will be crucial.

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.

Victoria Hordern
Similar Articles
Relevancy Powered by MondaqAI
Khurana and Khurana
Wright Hassall LLP
Shepherd and Wedderburn LLP
Waterfront Solicitors LLP
Lowndes, Drosdick, Doster, Kantor & Reed, P.A.
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Khurana and Khurana
Wright Hassall LLP
Shepherd and Wedderburn LLP
Waterfront Solicitors LLP
Lowndes, Drosdick, Doster, Kantor & Reed, P.A.
Related Articles
Related Video
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