United States: GDPR, Part II: Personal Data Breach Notification Requirements

This seven-part series analyzes the ways in which the General Data Protection Regulation (GDPR), which goes into effect May 25, 2018, will impact the regulatory landscape for entities doing business with, or transacting in the data of European Union citizens. The first part of the series provides an overview of the history of pre-GDPR European data protection law. Future installments will each address a discrete aspect of the GDPR itself. The second installment, below, focuses on the GDPR's notification requirements.

Notification Obligations Defined

One of the purposes behind the GDPR's enactment is to unify the patchwork of member state data protection laws behind a single regulation applicable across the EU. To that end, the GDPR creates a number of requirements with which entities that control or process data of EU citizens must comply, including the obligation to provide notification if citizens' data is involved in a "personal data breach." The GDPR defines a data "controller" as a person or entity that determines why and how personal data will be processed and a data "processor" as the person or entity that processes personal data on behalf of the controller.

The GDPR has three primary notification requirements in the event of a "personal data breach."

  1. Article 33 requires that any controller becoming aware of a breach must, without undue delay and where feasible within 72 hours, notify the applicable member state supervisory authority. 
  2. Under Article 34, the controller must also, without undue delay, notify affected data subjects.  
  3. Additionally, under Article 33, any processor that becomes aware of a breach must notify the controller without undue delay. 

Thus, the GDPR puts the onus of consumer and regulatory notification on the data controller, whether the data breach originated with it or with the data processor.

Notification to the supervisory authority must include:

  • A description of the nature of the breach, including the number of data subjects affected and the kinds of data involved;
  • The name and contact information of a contact person within the controller's organization from whom additional information may be obtained;
  • A description of the likely consequences of the breach;
  • A description of the measures being taken by the controller to address the breach.

Notification to the data subjects must, in clear and plain language, describe the nature of the breach, and, similar to the regulatory notification, must include:

  • The name and contact information of the a contact person within the controller's organization from whom additional information may be obtained;
  • A description of the likely consequences of the breach;
  • A description of the measures being taken by the controller to address the breach.

Exceptions to Notification Obligation

There is an exception to the regulatory notice requirement where the controller determines that the breach is unlikely to result in a risk to the rights and freedoms of natural persons. Similarly, data subjects need only be notified if the controller determines that the breach is likely to result in a high risk to the rights and freedoms of natural persons. 

Additionally, the GDPR provides specific safe harbors applicable to individual data subject notification, including where:

  • The controller has implemented and applied safeguards to the personal data which render it unintelligible to unauthorized users;
  • The controller has taken subsequent measures to ensure that the risk to data subjects' rights and freedoms is unlikely to materialize; or
  • Individual notification would involve disproportionate effort, in which case the controller may provide public notice.

Controllers and processors are subject to civil liability for damages caused by violations of any provision of the regulation, including the notification requirements. Additionally, the GDPR directs member-state supervisory authorities to impose on controllers and processors "effective, proportionate and dissuasive" administrative fines and/or penalties for violations.

Comparison to U.S. Data Protection Law

Generally speaking, the GDPR creates more stringent notification obligations than those imposed by U.S. law. Like pre-GDPR Europe, data protection laws in the U.S. fall within the purview of the individual states. (Check out Lewis Brisbois' interactive map detailing each state's data breach notification statutes, as well as our State of the (State) Data Breach Laws: 2017 Legislative Update series.) However, most states that have enacted a data breach notification statute have adopted some iteration of a common statutory framework. The GDPR creates broader obligations in a number of ways. Most U.S. states do not require more restrictive notification to regulatory officials than to consumers. However, the GDPR requires notification to both the applicable member-state regulatory authority and  to any affected data subjects within 72 hours. Additionally, unlike many of its U.S. state counterparts, the GDPR requires notification of the breach to a regulatory authority no matter the size of the affected population.

The most significant expansions, however, arise from the way in which the GDPR defines (1) the data subject to its protections, i.e., "personal data," and (2) the event requiring notification, i.e. "personal data breach." Most U.S. state data protection laws limit the definition of personal information to specific items or categories, such as a Social Security number, driver's license number, financial account information or health information. The GDPR defines "personal data" as any identifying information relating to a data subject. Many U.S. state data protection laws limit the definition of a data breach to incidents involving unauthorized access or acquisition of data. The GDPR broadens the scope of incidents qualifying as a "personal data breach" to include accidental or unlawful destruction, loss, or alteration in addition to unauthorized access or disclosure. Therefore, for entities offering goods and services to EU citizens that experience a data breach, the GDPR may expand the circumstances under which the entity is obligated to report the breach.

Conclusion

The GDPR aggressively mandates a series of notifications surrounding "personal data breaches." Without undue delay, and where feasible within 72 hours, controllers of data must notify member-state supervisory authorities and any affected data subjects of a breach. In addition, processors of data that become aware of a breach must also notify without undue delay, any affected controller of data. While it is too soon to determine whether GDPR compliance mechanisms can effectively enforce these notification provisions, the fines and sanctions imposed by the GDPR for non-compliance (discussed more fully in an upcoming installment of this series) are stringent enough to warrant immediate attention when a breach is discovered. Prompt notification to supervisory authorities, data subjects, and controllers can avoid fines which can reach as much as €20 million or four percent of global annual turnover for the preceding financial year.

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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