Privacy and mHealth Apps: EU Draft Code of Conduct

March 13, 2017

The Internet of Things is fast becoming a familiar feature of everyday
life.  Nowhere is this more apparent than
in the health sector. The ubiquity of smart phones, tablets, sensors,
wearables, personal trackers and similar wireless smart devices means that huge
volumes of data concerning health, fitness, lifestyle, stress and sleep are
being harvested and processed. This demand for services and products is feeding
an enormous growth in mobile health apps (‘mHealth apps’).  A 2015 report commissioned by iMedicalApps[1]
estimated that 165,000 mHealth apps were then available. A separate report
estimates that the mHealth sector will become a $59 billion market by 2020.[2] This new
marketplace is certain to offer commercial opportunities for app developers,
healthcare providers and health insurers, but also presents several challenges.
In particular, there are important data privacy implications where personal
data relating to individual’s health and well-being is collected and processed
on such a large scale. At present there is little harmonisation, whether by
accident or design, across EU Member States in terms of the data protection
legislation governing this sector. The European Commission has acknowledged
this legal fragmentation and in July 2016 proposed a ‘Code of Conduct on
privacy for mHealth apps’.[3]

Adopting the Code of

The European Commission submitted the draft Code to the Article 29
Working Party (the ‘WP29’)
for approval in July 2016, which is required before the Code can have effect. The
WP29 has not yet approved the Code, or given any indication of when approval
might be granted. If the WP29 does approve the Code, it will then be possible
for mHealth app developers to adopt the Code.  The Code is a voluntary framework and is thus not
automatically binding on app developers.  Those who wish to be certified under the Code
are required to: (i) conduct a Privacy Impact Assessment (PIA), together with
submitting the results to the Code’s Monitoring Body: and (ii) self-certify
compliance with the Code.[4]  If accepted by the Monitoring Body, the app
developer and the mHealth app will be placed on a public register.  Continued adherence to the Code is necessary
in order to remain on the register and the app developer can be subject to
further investigations by the Monitoring Body, either by random selection by
the Monitoring Body or following a complaint.

The Code has its origins in the Commission’s Green Paper on mHealth
which revealed that 45% of consumers were concerned with unwanted use of their
data when using mobile devices for health related activities. The stated aim of
the Code is therefore to foster
trust among users of mobile applications which process personal data that
includes data concerning health
’. By certifying compliance with and
following the guidance in the Code, app developers will not only go a long way
towards ensuring full compliance with EU data protection legislation, but also
potentially gain a competitive advantage by assuring consumer trust.  Before submitting the current draft of the
Code to the WP29, the Commission had earlier requested clarification from the
WP29 on the scope of the definition of health data in the context of wellbeing
and lifestyle apps.   The WP29 identified
three distinct situations whereby the processing of personal data by mHealth
apps would be considered ‘health data’:

data processed by an app
that is inherently medical data;

raw sensor data that can be
used to draw conclusions about the status of one’s health; and

data where conclusions are
drawn about a person’s health status or health risk

Scope of Code

Differing slightly from the definition of ‘health data’ given by WP29, the Code defines ‘data concerning health’ as ‘any personal data related to the
physical or mental health of an individual, including the provision of health
care services, which reveal information about his or her health status
’.  The Code makes it clear that it covers only
apps dealing with data concerning health, and apps that deal only with users’
lifestyles are excluded from the Code.  For
example, a lifestyle app that monitors the amount of steps someone takes in a
day for the sole purpose of measuring the user’s activity, but without processing
that data to draw conclusions about that person’s physical condition or health
status, would not be considered a lifestyle app and would fall ourtside the
scope of the Code.  It would be bound by
data protection law generally.  It will
be necessary to assess potential application of the Code to mhealth apps on a
case-by-case basis. 

The Code is currently governed by the Data Protection Directive 95/46/EC
, but it provides targeted
guidance on how mHealth app developers can ensure compliance with the GDPR. The
Code is not intended to replace or add to existing data protection obligations
(whether under the Directive or GDPR), but rather is intended to provide
guidance to assist app developers in ensuring that their mHealth apps are in compliance
with EU data protection law. 

The Code addresses a broad range of challenging issues and sets out a
number of guidelines for app developers, the most important of which are:

User Consent: mHealth app developers
must obtain the user’s free, specific, informed and explicit consent for their health
data to be processed for the purposes indicated by the mHealth app prior to or
as soon as users install the app.

Data Protection Principles: the principles outlined
and defined in the Code include purpose limitation, data minimisation,
transparency, privacy by design and privacy by default and data subject rights
that are of the utmost relevance to mHealth apps.

User Information: the user must be informed
of the purpose(s) and lawful basis for which their personal data is collected
and processed, the identity of the app developer, where their data will be
processed and stored, including whether their data will be stored in other
locations, such as back-up servers. Users must also be informed of their rights
to access, correct or delete their data, as well as the right to data
portability.  A layered approach is
recommended, whereby users are provided with a condensed notice which contains
the vital information in accessible language with the possibility of clicking
through to a full privacy policy containing all other relevant
information.  The information should be
available before app installation and should be easily accessible again after
installation should the user so wish.

Data Retention: personal data may not be
stored any longer than is necessary for the functionalities of the app.  Criteria must be set out and communicated to
the user for either the deletion or the anonymisation of data.  As an alternative to deleting data, apps
providers may also irreversibly anonymise personal data,  such that there is no risk of individuals
being subsequently identified from the data.

Security: the Code requires the carrying out of a
Data Privacy Impact Assessment and
adoption of security measures which have been recommended by ENISA. 
Provisions in both areas are outlined in annexes to the Code.  It might be noted that mHealth app
developers, as well as being within the scope of data protection legislation,
including the Code (which is a voluntary arrangement), may also be within the
scope of the Directive on Network and Information Security (the ‘NIS Directive’),
whether as an ‘Operator of Essential Services’
or ‘Digital Service Provider’.  Further discussion of the NIS Directive is
outside the scope of this article.

Advertising: any advertising within
the mHealth app must have been given prior authorisation by the content user,
but this requirement differs depending on whether the advertising involves the
processing of personal data.  For
contextual advertising, which
is a form of targeted advertising
based on the identity of the user and the content displayed, an opt-out option
must be given to the user before any processing of personal data can occur.

Use of Data for Secondary Purposes: Any
further data processing must be compatible with the purposes for which it was
originally collected, as communicated to the content users.  Processing for scientific or historical
research may be considered as compatible with original purposes, provided all
relevant national and EU-level restrictions are observed. Data anonymisation or
pseudynomisation may facilitate secondary processing for the purpose of big
data analytics.

  • Disclosing
    Data to Third Parties
    : Data
    may be made available to a third party for processing only after the user has
    been appropriately informed.  A legally
    binding agreement must be entered into with the third party, which restricts
    the third party from processing the data for any purpose other than that which
    the user has been informed of and must contain specific security obligations on
    the third party.

Data Transfers: The Code provides that
data can be transferred and stored on the app developer’s servers only if
proper consent has been obtained from the user. 
Transferring data to third parties must satisfy the conditions mentioned
above, and, in the case of data transfers to locations outside the EU/EEA,
legal guarantees are required to ensure that the transfer is permitted under EU
data protection law (ie must ensure that the country to which the data is being
transferred has an adequate level of data protection).  The European Commission has published a list
of countries that it deems to have an adequate standard of data
protection.  Subject to several
exceptions,[6] the
Directive states that transfers of personal data should not be made to
countries that do not appear on this list.

Data Breaches: The Code sets out
practical steps to follow in the event of a data breach. These steps could be
pro-actively implemented by app developers to compile a data breach ‘play-book’
before a data breach occurs. The Code outlines the notification process that
accompanies breaches of personal data. 
Note that, where applicable to a developer, the NIS Directive contains a
(separate) notification and post-notification investigation, including
potential sanction, process.

Children’s Data: The Code places specific conditions
on mHealth apps that are deliberately aimed at children.  It is recommended that app developers pay
attention to the age limit defining minors (which may vary from one EU Member
State to another under the GDPR), and apply the most restrictive data
processing approach to children’s data. 
Moreover, it is noted that parental involvement is critical for such
apps and therefore ‘reasonable efforts
must be taken by app developers to verify consent.  The approach adopted in the Code largely
mirrors that of the GDPR, particularly as regards the processing of children’s

Code Oversight

A three-tiered governance system has been
proposed under the Code to ensure compliance with the Code and that the views
of relevant stakeholders are taken into account.  The governance of the Code will be financed
and supervised by a General Assembly, comprised of representatives of all
stakeholders, namely app developers, the ‘data protection community’ (which appears
to be the collective term for the relevant regulatory bodies), industry
associations, and end-users.  A
Governance Board consisting of 6-10 members selected from the General Assembly
has been proposed to manage the everyday interpretation and maintenance of the
Code, as well as any potential code amendments. 
Furthermore, a Monitoring Body comprised of members chosen by the
Governance Board after consultation with the General Assembly will deal with
complaints and ensure the adherence to and effective enforcement of the Code by
keeping a public registry of all app developers complying with the requirements
of the Code and by engaging in reviews of app developers’ applications.

Is the Code Likely to be
Attractive to App Developers?

While the purpose of the Code is to assist
app developers in ‘making responsible and informed choices that comply with
European data protection law’, it remains to be seen whether the Code will
prove attractive to app developers in large numbers.  There is no guarantee that stating adherence
to the Code will lend a competitive advantage to app developers. Further, if
this were to be the case, it is unclear whether any commercial advantages
accrued would outweigh the administrative and regulatory burden of continued
compliance with the Code (such as the necessary completion of a PIA and ongoing
checks by the Monitoring Body). For example, in certain circumstances, app
developers who conduct a PIA may be subject to an obligation to ‘consult’ with
the relevant data protection authority on the findings of the PIA.


The huge increase in the number and type of
mHealth apps available over a short timeframe, largely driven by the consumer
willingness to utilise IOT devices, has alerted the Commission to the need to
intervene based on its consumer protection and personal data protection

The Code has been some time in gestation
and has been with WP29 since July 2016 awaiting approval.  The time taken
is likely due to overlap with the general overhaul of data protection
legislation, seen in the GDPR and the January 2017 Commission proposed
Regulation on Privacy and Electronic Communications, together with new
information security initiatives, seen in the Directive on Security of Network
and Information Systems (with the two Regulations and one Directive taking
effect in May 2018).

The Code provides a harmonised EU data
privacy framework, intended to protect users’ privacy and ensure adequate data
security in a burgeoning area which shows no signs of slowing down.  While
the Code benefits mHealth solution users it remains to be seen whether mHealth
app developers will find the Code as beneficial, given its high administrative
and regulatory burdens, which will quite likely impact on the volume of
developer take-up.

We will follow the legislative progress of
the Code, as well as its subsequent roll-out, with interest.

Pearse Ryan and Colin Rooney are both
partners and Hugh McCarthy is an associate in Arthur Cox’s Technology and
Innovation Group.