Eduardo Ustaran warns that the draft report by the LIBE Committee on the data protection reform directive, with its revised proposal for the regulation, looks to tighten control yet further, not slacken the reins
If anyone thought that the European Commission's draft data protection regulation was prescriptive and ambitious then they must prepare themselves for the European Parliament's approach. The much awaited draft report by the LIBE Committee with its revised proposal (as prepared by its rapporteur Jan-Philipp Albrecht) has now been made available. What was already a very complex piece of draft legislation has become by far the strictest, most wide-ranging and potentially most difficult to navigate data protection law ever to be proposed.
This is by no means the end of the legislative process, but here are some of the highlights of the European Parliament's proposal currently on the table:
· The territorial scope of application to non EU-based controllers has been expanded in order to catch those collecting data of EU residents with the aim of (a) offering goods or services (even if they are free) or (b) monitoring those individuals (not just their behaviour).
· The concept of 'personal data' has also been expanded to cover information relating to someone who can be singled out (not just identified).
· The Parliament has chosen to give an even bigger role to 'consent' (which must still be explicit), since this is regarded as the best way for individuals to control the uses made of their data. In turn, relying on the so-called 'legitimate interests' ground to process personal data has become much more onerous, as controllers must then inform individuals about such specific processing and the reasons why those legitimate interests override the interests or fundamental rights and freedoms of the individual.
· Individuals' rights have been massively strengthened across the board. For example, the right of access has been expanded by adding to it a 'right to data portability' and the controversial 'right to be forgotten' potentially goes even further than originally drafted, whilst profiling activities are severely restricted.
· All of the so-called 'accountability' measures imposed on data controllers are either maintained or reinforced. For example, the obligation to appoint a data protection officer will kick in when personal data relating to 500 or more individuals is processed per year, and new principles such as data protection by design and by default are now set to apply to data processors as well.
· The 'one stop shop' concept that made a single authority competent in respect of a controller operating across Member States has been considerably diluted, as the lead authority is now restricted to just acting as a single contact point.
· Many of the areas that had been left for the Commission to deal with via 'delegated acts' are now either specifically covered by the Regulation itself (hence becoming more detailed and prescriptive) or left for the proposed European Data Protection Board to specify, therefore indirectly giving a legislative power to the national data protection authorities.
· An area of surprising dogmatism is international data transfers, where the Parliament has added further conditions to the criteria for adequacy findings, placed a time limit of two years to previously granted adequacy decisions or authorisations for specific transfers (it's not clear what happens afterwards – is Safe Harbor at risk?), reinforced slightly the criteria for BCR authorisations, and limited transfers to non-EU public authorities and courts.
· Finally, with regard to monetary fines, whilst the Parliament gives data protection authorities more discretion to impose sanctions, more instances of possible breaches have been added to the most severe categories of fines.
All in all, the LIBE Committee's draft proposal represents a significant toughening of the Commission's draft (which was already significantly tougher than the existing data protection directive). Once it is agreed by the Parliament, heated negotiations with the Council of the EU and other stakeholders (including the Commission itself) will then follow and we have just over a year to get the balance right. Much work no doubt awaits.
Eduardo Ustaran is a Partner and the Head of the Privacy and Information Law Group at Field Fisher Waterhouse LLP. He can be contacted at email@example.com.