United States: China Issues Draft Amendments To The Personal Information Protection Standard

 On February 1, 2019, China's National Information Security Standardization Technical Committee issued a set of draft amendments ("the Amendments") to GB/T 5273-2017 Information Security Technology –Personal Information Security Specification (信息安全技术–个人信息安全规范) (the "Specification") for public comments, to be provided by March 3, 2019. The Specification took force on May 1, 2018.

The Specification is defined as a "recommended national standard" and, as such, not legally binding. It is viewed, however, as setting out best practices, and data controllers typically evaluate and adjust their internal policies in relation to the Specification.

The Amendments address, among other issues, forced consent, third-party access and personalized display.

Changes to Consent

The Amendments introduce more stringent consent requirements for collecting personal information.

The Amendments conceptualize the business functions of a data controller as divided into "basic" business functions and "extended" business functions, with distinct consent requirements for the different functions. Annex C of the Amendments, which suggests factors to consider in determining whether a function is "basic" or "extended," indicates that as a general matter, "basic" functions are those integral to the data subjects' demands or expectations regarding a particular product or service. (Another way of imagining this is that, if the data subject would not choose the given product or service if it lacked certain features, such features constitute business functions.) Appendix C points to various elements to consider in categorizing a function as basic or extended, including how the good/service is marketed, the name of the product or service and how it is described in the App Store. The Amendments explicitly state that improvement of service quality, enhancement of user's experience and R&D for new products would not be considered as "basic" functions.

Rules for collecting personal data are articulated in relation to function category. We highlight a few key points regarding these rules under the Amendments:

  • For basic functions, the data controller can bundle basic functions into a package, provided that all such basic functions are necessarily activated at the same time. The data controller cannot, however, bundle various functions of products or services into a single package and request the data subject either accept or reject the package if it is not necessary to activate all the basic functions of products or services at a time. For the extended functions, the data subject is entitled to an item-by-item activation of functions.
  • The data controller must inform data subjects about basic or extended functions via some sort of interface, such as pop-up windows, written descriptions, notification bars or notification sounds, before activating the basic functions—likely when the data subjects install or use the software or app for the first time, or register the account—or before use of the extended functions for the first time.
  • Consent (either to activate a specific function or relating to personal data collection) can be given only through the data subject's affirmative action, e.g., filling in consent language, clicking an "Agree" bottom or checking a box.
  • Data subjects must be given the option to close or opt out of a given function, and doing so must be as easy as activating or opting in to such function.
  • The Amendments forbid data controllers from sending data subjects repeated requests for consent to the extended functions if the data subject has declined to do so. Such requests cannot be made more than once in a 24-hour period.
  • If a data subject objects to, closes, or opts out of extended functions, the data controller cannot suspend other functions or lower the service quality of other functions.

As indicated above, explicit consent is required for the collection of both sensitive and non-sensitive personal data collection. This is a notable shift away from the sensitive versus non-sensitive distinctions the Specification originally made regarding consent.

Privacy Policies

The Amendments add mandatory material to privacy policy content, including:

  • Privacy policies must distinguish personal data collected through basic versus extended functions.
  • Any collection of personal sensitive information must be clearly identified or highlighted.
  • Privacy policies must disclose any cross-border transfer of personal data.
  • Privacy policies must inform data subjects of the potential risks of providing their personal data and of the potential impact if the data subject objects to doing so.
  • With respect to using products or services for the first time, or in connection with account registration, the Amendments recommend data controllers employ a pop-up window or comparable notice to proactively display the main or substantial contents of the privacy policy to the data subject.

As a general matter, the Amendments are more protective of data subjects' interests, and specify that in the event multiple interpretations of a privacy policy are possible, the more protective interpretation rules.

No Exception for Consent by Performance of Contract

The Amendments deleted performance of contract as an exception to obtaining consent. If this amendment remains effective, the data controller could not rely on the contract with the data subject to collect the subject's personal information, and would instead be obligated to seek the subject's prior consent.

Personalized Display

The Amendments introduce, for the first time, the notion of "personalized display," and set forth requirements governing two types of data controllers that provide information, merchandise or services based on the data subject's browsing history, personal interests, consumption records, personal habits and other personal information. (The paradigmatic example is targeted advertisement.)

Controllers that provide targeted news or information must mark the material as "personalized display" or "target push" and provide a simple and direct means to opt out. Separately, e-commerce operators providing personalized recommendations or search results must provide the data subject with the option of a non-personalized display. The Amendments also recommend that data subjects be allowed to specify their preferences for receiving targeted marketing. If the data subject opts out of receiving targeted advertisements, the subject must have the option to delete/de-identify the personal data used for such advertisements.

Integration of Personal Data Collected by Various Functions

For the first time, the Amendments impose restrictions on data controllers integrating data collected from different sources, namely that the use of (integrated) information is compatible with the purposes stated at the time of collection, and that the data controller conduct security assessments and take appropriate measures to protect the integrated data.

Third-Party Access

To the extent third parties can collect personal information through the data controller's service or product, the data controller must adequately supervise and manage the third party. The Amendments impose the following duties in case of third-party access:

  • Establishing a management program for the third-party access and, as necessary, establishing access conditions;
  • Executing a contract with the third party that specifies each party's security obligations;
  • Notifying the data subject that the certain products or services are provided by the third party;
  • Adequately maintaining relevant contract and management records properly and making them available for review as necessary;
  • As applicable, reviewing consents the third party obtains from data subjects;
  • Requiring third parties establish procedures for responding to data subjects' complaints and requests, making and maintaining relevant records, and making such records available for the data subject's review;
  • Monitoring the third party's security practices regarding personal information, and, as necessary, cutting off the third party's access to personal information;
  • Auditing APIs and other technologies the third party embeds to ensure compliance with the agreement between the parties, and, as necessary, cutting off the third party's access to information.

Data Breach Notification

Under the present cybersecurity-related laws and regulations, it is unclear which of the relevant authorities to whom data breaches should be reported. The Amendments provide two pieces of guidance related to data breach notification, but there are still many unknowns.

Pursuant to the Specification, data controllers must notify the data subject of any incident. Under the Amendments, in contrast, the data controller is not obliged to notify the data subject of all data breach incidents; notification obligations will only be triggered in the event that such incidents substantially impact the data subjects (e.g., if personal sensitive information is disclosed).

In addition, in the case of leakage, damage or loss of the personal sensitive data of more than 1 million individuals, or if related to national economy and people's livelihood or public interests, the data controller must report such incidents to the competent cybersecurity administration. This provision is in line with National Contingency Plans for Cybersecurity Incidents, which became effective on January 10, 2017.

Data Protection Officer

The Amendments raise the threshold requirements for naming a data protection officer, requiring such an officer when the data involved pertains to 1 million (rather than the previous 500,000) individuals. The Amendments also require that the data controller honor the data protection officer's independence.

Records of Personal Data Processing

The Amendments recommend that the data controller establish, maintain and update an inventory of data collection-related records. The contents of the records may include the type, volume and source of the personal data collected; the processing purposes, whether third-party processors are used and the sharing, transfer, disclosure and cross-border transfer of personal data; and the systems and personnel involved in the processing.

Conclusion

The Specification has been important guidance in privacy and data security matters in China, and valued by many companies and relevant authorities. The Amendment will certainly bring heated discussions in the market and we will keep a close eye on its development and finalization.

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
Wilson Elser Moskowitz Edelman & Dicker LLP
Dickinson Wright PLLC
Dickinson Wright PLLC
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Wilson Elser Moskowitz Edelman & Dicker LLP
Dickinson Wright PLLC
Dickinson Wright PLLC
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
 
Email Address
Company Name
Password
Confirm Password
Country
Position
Industry
Mondaq Newsalert
Select Topics
Select Regions
Registration (please 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