Unlocking the EU General Data Protection Regulation: A practical handbook on the EU's new data protection law: Chapter 10: Obligations of controllers

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Overview

Why does this topic matter to organisations?

Each time an organisation processes personal data, it will do so as either a controller or a processor. These roles bear different responsibilities. Therefore, it is critically important for an organisation to be able to:

  • identify the scenarios in which it acts as a controller;
  • understand the obligations that apply to controllers; and
  • comply with those obligations.

What types of organisations are most affected?

All organisations are likely to process at least some personal data as data controllers (even if only in relation to their own employees). Therefore, all organisations that are subject to EU data protection law are affected by this issue.

What should organisations do to prepare?

Each organisation that acts as a controller should:

  • review all of its data processing activities in preparation for the GDPR;
  • identify the data processing activities for which it is a controller, and ensure that it understands its responsibilities as a controller;
  • ensure that, in respect of each processing activity for which it is a controller, it has implemented appropriate technical and organisational measures to ensure compliance with the GDPR; and
  • ensure that it has appropriate processes and templates in place for identifying, reviewing and (to the extent required) promptly reporting data breaches.

Icons are used below to clarify the impact of each GDPR change. These GDPR impact icons are explained here.    

Detailed analysis

Issue

The Directive

The GDPR

Impact

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Definition of "controller"

In general terms, the "controller" is the entity that determines the purposes for which (i.e., "why") and the means by which (i.e., "how") personal data are processed.

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Art.2(d)

In summary, a "controller" is an entity that, alone or jointly with others, determines how and why personal data are processed. A full definition is set out in Chapter 5.

does not materially change

In summary, a "controller" is an entity that, alone or jointly with others, determines how and why personal data are processed. A full definition is set out in Chapter 5.

neutral

The concept of a "controller" is essentially unchanged under the GDPR. Any entity that is a controller under the Directive likely continues to be a controller under the GDPR.

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Accountability

The principle of accountability seeks to guarantee the enforcement of the Data Protection Principles. This principle goes hand-in-hand with the growing powers of DPAs.

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Art.6(2)

The controller must ensure compliance with the Data Protection Principles.

materially changes

Rec.85; Art.5(2)

The controller is responsible for, and must be able to demonstrate, compliance with the Data Protection Principles.

negative

Under the GDPR, organisations are obliged to demonstrate that their processing activities are compliant with the Data Protection Principles (see Chapter 6).

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Responsibility of controllers

In general, controllers bear primary responsibility for ensuring that processing activities are compliant with EU data protection law.

blank

Art.6(2)

The controller is responsible for ensuring that its processing activities are compliant with the requirements of the Directive.

materially changes

Rec.74; Art.24

The controller is responsible for implementing appropriate technical and organisational measures to ensure and to demonstrate that its processing activities are compliant with the requirements of the GDPR. These measures may include implementing an appropriate privacy policy. Adherence to approved Codes of Conduct (see Chapter 12) may provide evidence of compliance.

neutral

The general principle is unchanged. Where an organisation acts as a controller, it is responsible for ensuring that its processing activities are lawful.

 

positive

The GDPR provides additional detail on how organisations can demonstrate that their processing activities are lawful.

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Data protection by design and by default

This principle means that compliance with EU data protection law should not be an after-thought, but should instead be treated as a key issue in the planning and implementation of any new product or service that affects personal data.

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N/A

Although the Directive clearly obliges controllers to ensure compliance with its requirements, it does not specifically oblige them to take any particular steps with respect to the design or default implementation of any data processing activities.

materially changes

Rec.78; Art.25

Controllers must ensure that, both in the planning phase of processing activities and the implementation phase of any new product or service, Data Protection Principles, and appropriate safeguards, are addressed and implemented. For example, the controller must implement measures that provide for the security of any data processed, and give effect to the rights of data subjects (see Chapter 9).

negative

The GDPR imposes a significant burden on organisations by requiring them to ensure that data protection compliance is "baked in" to their data processing activities. In addition, organisations are required, by default, to process only the minimum amount of personal data necessary.

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Joint controllers

In relation to any processing activity, it is possible for more than one entity to be the controller (on the basis that more than one entity may make decisions about the purposes for which, and means by which, those data are processed).

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Art.2(d)

The Directive does not use the term "joint controllers", but does recognise the fact that multiple entities may jointly determine the purposes and means of processing personal data.

materially changes

Rec.79; Art.4(7), 26

Where two or more controllers jointly determine the purposes and means of the processing of personal data, they are joint controllers. Joint controllers must, by means of an "arrangement" between them, apportion data protection compliance responsibilities between themselves (e.g., the responsibility for providing clear information to data subjects – see Chapter 9).

A summary of the arrangement must be made available for the data subject. The arrangement may designate a contact point for data subjects.

negative

In many circumstances (particularly where processing takes place in an intra-group context) organisations may not realise that a joint controllership has come into existence. The GDPR obliges organisations to keep watch for potential instances of joint controllership. Where those instances arise, organisations must enter into suitable "arrangements" that apportion data protection compliance responsibilities between joint controllers.

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Liability of joint controllers

Where liability arises in a joint controllership scenario, EU data protection law's primary focus is on ensuring that the data subject is protected. The question of how liability should be apportioned between the joint controllers, while important to organisations, is a secondary question from the perspective of EU data protection law.

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Rec.55; Art.23(2)

The controller may be exempted from liability, in whole or in part, if it proves that he is not responsible for the event giving rise to the damage. It may also be a defence to show that the liability arose in whole or in part from force majeure.

materially changes

Rec.79, 146; Art.26(3), 82(3)-(5)

Data subjects are entitled to enforce their rights against any of the joint controllers. Each joint controller is liable for the entirety of the damage, although national law may apportion liability between them. A controller may be exempted from liability if it proves that it is not in any way responsible for the damage. If one joint controller has paid full compensation, it may then bring proceedings against the other joint controllers to recover their portions of the damages.

negative

The GDPR makes joint controllers fully liable. Once "full compensation" has been paid to the affected data subject(s), joint controllers may recover damages from one another. This means that some joint controllers may find themselves facing much higher liability for claims made under the GDPR.

 

negative

The Directive exempts controllers from liability for harm arising in cases of force majeure. The GDPR contains no such exemption, meaning that controllers may bear the risk in force majeure cases.

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Appointment of representatives

Where EU data protection law applies to a controller (or, under the GDPR, a processor) established outside the EU (see Chapter 4), that controller (or processor) is obliged to appoint a representative in the EU, as a point of contact for EU data subjects and DPAs.

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Art.4(2)

A controller established outside the EU must appoint a representative in the Member State whose data protection laws apply to that controller. The appointment of the representative is without prejudice to legal actions which could be initiated against the controller.

materially changes

Rec.80; Art.4(17), 27

A controller established outside the EU must appoint a representative in one of the Member States in which the controller offers goods or services or monitors EU residents, unless the processing is occasional, small-scale and does not involve Sensitive Personal Data. The appointment of the representative is without prejudice to legal actions which could be initiated against the controller. The representative must be mandated by the controller or processor to be addressed in addition to or instead of the controller or the processor by supervisory authorities and data subjects, on all issues related to data protection. A representative may be subject to enforcement actions by DPAs in the event of non-compliance by the controller.

positive

Non-EU organisations whose processing activities are occasional, small-scale, and do not involve Sensitive Personal Data are not obliged to appoint a representative under the GDPR.

 

negative

Under the GDPR a representative may be liable for the controller's failure to comply with the GDPR. Organisations should therefore be wary of agreeing to act as representatives for third parties without strong contractual indemnities in place.

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Appointment of processors

Organisations that act as controllers commonly appoint service providers to process personal data on their behalf. EU data protection law permits this practice, but imposes certain requirements on organisations that wish to do so.

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Art.17(2)-(3)

A controller that wishes to appoint a processor must only use processors that guarantee compliance with the GDPR. The controller must appoint the processor in the form of a binding contract in writing, which states that the processor:

  • shall only act on the controller's instructions; and
  • must ensure the security of the personal data that it processes.

materially changes

Rec.81; Art.28(1)-(3)

A controller that wishes to appoint a processor must only use processors that guarantee compliance with the GDPR. The controller must appoint the processor in the form of a binding agreement in writing, which states that the processor must:

  • only act on the controller's documented instructions;
  • impose confidentiality obligations on all personnel who process the relevant data;
  • ensure the security of the personal data that it processes;
  • abide by the rules regarding appointment of sub-processors (see Chapter 11);
  • implement measures to assist the controller in complying with the rights of data subjects;
  • assist the controller in obtaining approval from DPAs where required;
  • at the controller's election, either return or destroy the personal data at the end of the relationship (except as required by EU or Member State law); and
  • provide the controller with all information necessary to demonstrate compliance with the GDPR.

negative

The GDPR imposes significant new requirements that must be included in all data processing agreements. It is likely that processors located outside the EEA will resist the imposition of these new obligations, potentially making it harder for controllers to lawfully appoint their desired processors, and resulting in more complex negotiation of outsourcing agreements.

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Records of processing activities

In order to ensure compliance, EU data protection law requires organisations to keep records of their data processing activities, and that the information in those records is provided to (or is available on request by) DPAs.

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Rec.48; Art.18

Each controller (and its representative, if any) must notify the relevant DPA before processing any personal data. Member States can provide simplifications or exemptions from this requirement (e.g., some Member States allow controllers not to register, provided that they have appointed a DPO).

materially changes

Rec.82; Art.30

There is no obligation to notify DPAs. Instead, each controller (and its representative, if any) must keep records of the controller's processing activities, including:

  • the contact details of the controller/representative/ DPO;
  • the purposes of the processing;
  • the categories of data subjects and personal data processed;
  • the categories of recipients with whom the data may be shared;
  • information regarding Cross-Border Data Transfers;
  • the applicable data retention periods; and
  • a description of the security measures implemented in respect of the processed data.

Upon request, these records must be disclosed to DPAs.

neutral

The GDPR does away with the requirement to notify DPAs regarding an organisation's processing activities. However, in effect, the information that would have been included in such a registration is simply recorded by the controller (or its representative) for disclosure to the DPA upon request. Consequently, the obligation on organisations to identify and record their data processing activities does not materially change.

 

positive

The GDPR provides an exemption for organisations employing fewer than 250 persons (unless the processing in question is of a high-risk nature).

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Cooperation with DPAs

DPAs are responsible for enforcing and regulating EU data protection law. Controllers are therefore required to cooperate with DPAs.

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N/A

The Directive does not explicitly require controllers to cooperate with DPAs, although this is generally a requirement under the national laws through which Member States create DPAs and provide them with powers.

materially changes

Rec.82; Art.31

Controllers (and their representatives, if any) are required to cooperate, on request, with DPAs in the performance of their tasks.

neutral

The GDPR merely codifies the existing de facto (or, in some Member States, national legal) obligation of controllers to co-operate with DPAs.

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Data security

The idea that controllers should ensure the security of the personal data that they process is a core concept in EU data protection law. As noted in Chapter 6, the controller is also obliged to abide by the principle of data security.

blank

Rec.46; Art.17(1)

The controller must implement appropriate technical and organisational security measures to protect personal data against accidental or unlawful destruction or accidental loss, alteration, unauthorised disclosure or access.

materially changes

Rec.83; Art.32

The controller must implement appropriate technical and organisational security measures to protect personal data against accidental or unlawful destruction or loss, alteration, unauthorised disclosure or access. Depending on the nature of the processing, these measures may include:

  • encryption of the personal data;
  • on-going reviews of security measures;
  • redundancy and back-up facilities; and
  • regular security testing.

Adherence to an approved Code of Conduct (see Chapter 12) may provide evidence that the controller has met these obligations.

neutral

The Directive leaves a significant amount of discretion to the controller, in terms of the technical and organisational measures to be implemented in the controller's particular context. The GDPR is more prescriptive, but the net effect is very similar—the primary requirement is that the controller must ensure the security of the personal data that it processes.

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Reporting data breaches to DPAs

DPAs can only take appropriate enforcement action in relation to data breaches if they are aware of those breaches. Therefore, EU data protection law requires controllers to report such breaches to DPAs in certain circumstances.

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N/A

The Directive does not specifically oblige controllers to report data breaches to DPAs. Some Member States have implemented data breach reporting requirements in their respective national laws.

materially changes

Rec.73, 85-88; Art.33

In the event of a data breach, the controller must report the breach to the DPA without undue delay, and in any event within 72 hours of becoming aware of it. There is an exception where the data breach is unlikely to result in any harm to data subjects. The notification must include at least:

  • a description of the data breach, including the numbers of data subjects affected and the categories of data affected;
  • the name and contact details of the DPO (or other relevant point of contact);
  • the likely consequences of the data breach; and
  • any measures taken by the controller to remedy or mitigate the breach.

The controller must keep records of all data breaches, comprising the facts and effects of the breach and any remedial action taken.

negative

The GDPR's 72 hour deadline for reporting data breaches to DPAs is likely to prove extremely challenging, as it will require organisations to identify, review and report data breaches under intense time pressure.

 

negative

Records of all data breaches must be included in the controller's internal data processing records (see above). All breaches must be recorded no matter how small, and these records must be disclosed to DPAs on demand.

 

negative

In addition, the notification obligations under the ePrivacy Directive continue to apply to telecommunications providers. Such organisations may therefore be required to notify a data breach twice (once under the GDPR and once under the ePrivacy Directive).

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Notifying data breaches to affected data subjects

Data subjects can only take steps to protect themselves from the adverse consequences of data breaches (e.g., by replacing credit cards if their card details have leaked) if they are aware of those breaches. Therefore, EU data protection law requires controllers to notify such breaches to affected data subjects in certain circumstances.

blank

N/A

The Directive does not specifically oblige controllers to report data breaches to affected data subjects. Some Member States have implemented data breach reporting requirements in their respective national laws.

materially changes

Rec.73, 86-88; Art.34

In the event of a data breach causing high risk to data subjects, the controller must notify the affected data subjects without undue delay. The notification must include at least:

  • the name and contact details of the DPO (or other relevant point of contact);
  • the likely consequences of the data breach; and
  • any measures taken by the controller to remedy or mitigate the breach.

However, the controller may be exempt from this requirement if:

  • the risk of harm is remote because the affected data are protected (e.g., through strong encryption);
  • the controller has taken measures to protect against the harm (e.g., suspending affected accounts); or
  • the notification requires disproportionate effort (in which case the controller must issue a public notice of the breach).

negative

The obligation to notify data subjects imposes a potentially significant burden on organisations (especially those that process large volumes of personal data). This obligation also significantly increases the danger of widespread reputational harm arising as a consequence of a data breach.

 

neutral

The exemptions provided under the GDPR largely reflect the position under existing national laws. Most importantly, if the risks associated with the breach have been effectively resolved then the organisation may be exempt from the notification requirements.

Further analysis

Commentary: Data protection by design and by default

Under the GDPR, in respect of each current or proposed data processing activity, organisations must "bake in" measures to ensure data protection compliance. This means that, for each new or existing product or service that involves any collection or further processing of personal data, organisations must ensure that the relevant product or service is designed with data protection compliance in mind.

In addition, in relation to all processing activities, organisations must ensure that, by default, they process personal data in accordance with the rights afforded to individuals under the GDPR. This is likely to require many businesses to re-think their data processing activities from the ground up.

Commentary: Liability of joint controllers

Under the Directive, joint controllers are generally only liable for the harm for which they are responsible. This means that, in some circumstances (e.g., where one of the joint controllers becomes insolvent) data subjects may not be able to obtain full compensation for any harm arising from the joint processing. The GDPR reverses this approach, making each of the joint controllers fully liable to the data subject. The data subject is therefore entitled to bring a claim against whichever of the joint controllers he or she wishes. Once "full compensation" (a term that is not further explained in the GDPR) has been paid, the joint controller(s) who paid that compensation may then seek to recover damages from any other joint controllers involved in the joint processing. There is an exemption, but it only applies if the controller is not in any way responsible for the harm. Consequently, where a joint controller only has minimal responsibility for that harm, it nevertheless remains liable to pay "full compensation" to affected data subjects. It is likely that, under the GDPR, joint controllers will increasingly seek contractual indemnities from one another prior to commencing any joint processing.

Commentary: Data breach reporting

The GDPR's 72 hour deadline for reporting data breaches to DPAs is likely to prove extremely challenging. In most cases, the amount that an organisation knows about the extent and causes of a data breach develops substantially in the first couple of weeks after the breach is discovered. It will be extremely difficult for organisations to ascertain whether or not a data breach poses a high risk (and therefore needs to be notified) within that timeframe.

In order to prepare for the GDPR, it is important for organisations to:

  • appoint a person to take responsibility for reviewing and reporting data breaches (e.g., the DPO) and provide that person with the necessary power and authority to investigate data breaches within the organisation;
  • implement clear data breach reporting policies that provide employees with sufficient tools and training to identify actual or suspected breaches, and set out a clear escalation procedure for promptly notifying the DPO or other appropriate contact person; and
  • prepare template data breach reporting letters (e.g., template letters to DPAs and to affected data subjects) in order to accelerate the process of providing the necessary information in accordance with the GDPR.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

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This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.