European Union: The Article 29 Working Party Releases Draft Guidelines On Profiling And Automated Decision-Making Under The GDPR

On October 18, the Article 29 Working Party released its draft of "Guidelines on Automated individual decision-making and Profiling for the Purpose of Regulation 2016/679" ("Guidelines on Automated individual decision-making and Profiling," WP 251). The guidelines are not final yet and stakeholders may comment on these guidelines until November 28. 

Guidelines on Automated Individual Decision-Making and Profiling

The GDPR introduces new provisions addressing profiling and automated decision-making. Such instruments are used in an increasing number of sectors such as banking and finance, healthcare, taxation, insurance, marketing, and advertising. The Article 29 Working Party recognizes the benefits of profiling and automated decision-making, such as increased efficiencies and resource savings, but also points to significant risks can arise to individuals' rights and freedoms that require appropriate safeguards. The guidelines provide clarification regarding some core topics:

  • Profiling and 'solely' automated processing. The Article 29 Working Party recognizes that there are three ways in which profiling can be used in practice: (i) general profiling (defined in Article 4(4) GDPR); (ii) decision-making based on profiling; and (iii) solely automated decision-making, including profiling according to Article 22 GDPR. Automated decisions can be made with or without profiling, which in turn can take place without making automated decisions. Only where the profiling is based on solely automated processing does Article 22 GDPR apply, and in all other cases of general profiling the 'normal' system of the GDPR applies.
  • Processing activity that is wholly automated and leads to decisions that impact the individual in a sufficiently significant way is generally prohibited. The Article 29 Working Party interprets Article 22 of the GDPR as a prohibition on fully automated individual decision-making, including profiling that has a legal effect on, or similarly significantly affects, an individual. A decision is solely based on automated processing if there is no human involvement in the decision process. However, the key elements are the notions of 'legal' or 'similarly significant' effects, which the GDPR does not define. The Article 29 Working Party explains that "a legal effect suggests a processing activity that has an impact on someone's legal rights, such as the freedom to associate with others, vote in an election, or take legal action. A legal effect can also be something that affects a person's legal status or their rights under a contract." And even where no legal (statutory or contractual) rights or obligations are specifically affected, the data subjects could still be impacted sufficiently to require the protections under this provision. According to the Article 29 Working Party, in many typical cases, targeted advertising does not have a significant effect on individuals; for example, an advertisement for a mainstream online fashion outlet based on a simple demographic profile for 'women in the Brussels region.' But the Article 29 Working Party takes the view that it is possible that targeted advertising can have a significant effect on an individual depending on his or her specific characteristics, and considering the following attributes:

    • the intrusiveness of the profiling process;
    • the expectations and wishes of the individuals concerned;
    • the way the advertisement is delivered; or
    • the specific vulnerabilities of the data subjects targeted.

    In practice, this can be interpreted so that if data processing related to online advertising activities has a significant effect on an individual, this processing is prohibited and, to lawfully process the data, explicit consent by the data subject is required. Processing that might have little impact on individuals generally may in fact have a significant effect on certain groups of society, such as minority groups or vulnerable adults. Additionally, the Article 29 Working Party clarifies that automated decision-making that results in differential pricing could also have a significant effect if, for instance, prohibitively high prices effectively bar individuals from certain goods or services.
  • Exceptions to the prohibition. For automated decision-making under Article 22 GDPR, only three exceptions apply to justify the processing: (i) the automated decision-making is necessary under Article 22(2)(a) for entering into, or the performance of, a contract; (ii) the data subjects give their explicit consent; and (iii) Union or Member State law provides a legal basis. Here, the Article 29 Working Party reiterates its view, already published in its Opinion on legitimate interests (WP217), that "necessity" should be interpreted narrowly. According to the Article 29 Working Party, the controller must be able to show that profiling is necessary, and that no less privacy-intrusive methods could be adopted. This requirement of necessity apparently constitutes a high hurdle for the controller. 'Explicit consent' is not defined in the GDPR, but the implication is that consent must be specifically confirmed by an express statement rather than some other affirmative action. The Article 29 Working Party announced that 'explicit consent' will be addressed in the forthcoming consent guidelines. 
  • Rights of the data subject. Given the potential risk and interference that profiling poses to the rights of data subjects, the Article 29 Working Party states that data controllers should be particularly mindful of their transparency obligations since the profiling process is often invisible to the data subjects. Profiling involves the creation of derived or inferred 'new' personal data about the data subjects, which they themselves have not directly provided. The Article 29 Working Party also clarified the importance of the other data subject rights, including the right to access.  
  • General provisions on profiling and automated decision-making. The Article 29 Working Party provides an overview of the provisions applied to both profiling and automated decision-making. To aid compliance, the Article 29 Working Party states that controllers should consider the following key areas:

    • Transparency of the profiling process, as the process is often invisible to the data subject. The profiling process involves the creation of derived or inferred 'new' personal data about the data subjects, which they themselves have not directly provided.
    • Compatibility of additional processing with the original purpose for which the data was collected. 
    • Data minimization and the ability to explain and justify the need to collect and hold the personal data. Controllers should consider accuracy at all stages of the profiling process, specifically when collecting and analyzing data, building a profile for an individual or applying a profile for making decisions affecting the individual.
    • Storage limitation, because the long-term storage of information can conflict with the proportionality consideration.

The Annexes to the Guidelines, beginning on page 28, provide best practice recommendations built on the experience gained by EU Member States.

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 Mondaq.com.

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

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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

Mondaq.com (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 www.mondaq.com

To Use Mondaq.com 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.

Disclaimer

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.

General

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