Global Privacy & Security Compliance Law Blog

China’s New Data Security Law: What to Know

Posted in Legislative & Regulatory Developments, Security

The Data Security Law will enhance an increasingly comprehensive legal framework for information and data security in the PRC.

By Hui Xu and Kieran Donovan

On June 10, 2021, the Standing Committee of China’s National People’s Congress passed the Data Security Law (DSL), which will come into effect on September 1, 2021. The primary purpose of the law is to regulate data activities, safeguard data security, promote data development and usage, protect individuals and entities’ legitimate rights and interests, and safeguard state sovereignty, state security, and development interests. The DSL will enhance an increasingly comprehensive legal framework for information and data security in the People’s Republic of China (PRC). Highlights in the DSL include that it:

  • Applies to a wide range of data and data activities, with extraterritorial jurisdiction. The DSL broadly defines “data” as any record of information created in electronic or other forms, and comprehensively defines “data activities” to include data collection, storage, usage, processing, transmission, provision, and disclosure of data. The territorial scope of the DSL extends beyond the PRC and also applies to data activities conducted outside of the PRC, if they may “harm the national security or public interests of the PRC, or the legitimate rights of Chinese citizens or entities.”
  • Refines regulations on “important data” and emphasizes protection of “core state data.” The DSL proposes to classify and protect data based on importance of the data and requires authorities to provide a list of important data to strengthen the protection. The DSL further introduces the concept of core state data and emphasizes that the state will implement a strengthened management system in relation to core state data involving national security, lifelines of the national economy, important people’s livelihood, and major public interests.
  • Imposes a set of obligations combined with high fines and severe penalties on entities and individuals who conduct data activities. In particular, entities violating regulations of cross-border data transfer, or entities violating the core state data management system or harming state sovereignty, national security, and development of interests, may face penalties including monetary fines of up to CNY10 million (~US$1.5 million) and/or revocation of business licenses or demands to close down businesses, and may bear criminal responsibilities (if applicable).

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EDPB Issues New Guidance on Storing Credit Card Data for Future Purchases

Posted in Legislative & Regulatory Developments, Security

Online retailers storing credit card data for the sole purpose of facilitating further purchases will likely need to obtain consumer consent.

By Christian F. McDermott, Calum Docherty, and Victoria Wan

Online shopping has boomed in recent years. In 2020, the European statistics agency Eurostat estimated that 7 out of 10 internet users made online purchases within a 12-month period. The European Central Bank found that the total number of non-cash payments in the euro area increased by 8.1% in 2019 (the last year statistics are available) year-on-year with a total value of €162 trillion, which included 45 billion transactions processed by retail payment systems worth €35 trillion. This growth has likely surged during the COVID-19 pandemic, when many consumers turned to e-commerce.

The opportunities for retailers also present data protection risks. On 19 May 2021, the European Data Protection Board (EDPB) adopted Recommendations 02/2021 on the legal basis for the storage of credit card data for the sole purpose of facilitating further online transactions (the Recommendations) to address the vast data processing operations behind these transactions. The Recommendations focus on when and how online retailers can store a customer’s credit card data after a sale or transaction for the sole purpose of facilitating future purchases by that customer. The EDPB has expressly excluded from the scope of the Recommendations the storage of credit card data in relation to ongoing contracts, such as for subscription services, and the activities of payment institutions operating in online stores. The Recommendations only reference credit cards and not payment cards more generally (such as debit cards, prepaid cards, etc.). It is unclear whether the EDPB might have similar expectations of online retailers that store other payment card or direct debit data for the same purposes.

The Recommendations are not legally binding, but provide a brief exploration of the EDPB’s assessment of the legal bases available to the online retailer. The EDPB concludes that, in its view, the only appropriate legal basis for such processing is consent under Article 6(1)(a) of the General Data Protection Regulation 2016/679. Continue Reading

New Standard Contractual Clauses and Final EDPB Recommendations – Next Steps

Posted in Legislative & Regulatory Developments

Companies have three months to prepare to use the latest standard contractual clauses for new data transfers, and 18 months to migrate existing arrangements.

By Gail Crawford, Fiona Maclean, Danielle van der Merwe, and Amy Smyth

On 4 June 2021, the European Commission released its much-anticipated final Implementing Decision containing the new standard contractual clauses (SCCs) for the transfer of personal data to third countries, which will enter into effect on 27 June 2021. Organisations may continue to use the existing SCCs until 27 September 2021, after which time the new SCCs must be used for relevant new data transfers. Organisations have an 18-month grace period (until 27 December 2022) during which they must migrate any existing SCC arrangements to the new SCCs.

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Austrian Court Submits Questions on GDPR Civil Damages Claims to CJEU

Posted in GDPR

The CJEU’s decision is likely to have significant implications for ongoing and future proceedings for damages claims under Art. 82 GDPR.

By Tim Wybitul, Christoph Baus, Stefan Patzer, and Isabelle Brams

On April 15, 2021, the Austrian Supreme Court (OGH) referred key questions regarding non-material damages for data protection infringements under Art. 82 GDPR to the European Court of Justice (CJEU) for a preliminary ruling under Art. 267 TFEU. So far, a number of claims for non-material damages based on violations of the GDPR have been dismissed by the courts in Austria and Germany because the plaintiffs did not allege or prove any noticeable immaterial impairment. The OGH makes reference to a decision of the German Federal Constitutional Court (BVerfG) dated January 14, 2021 in which the court overturned a decision by the Goslar Local Court (AG). The BVerfG ruled that the AG would have had submit significant questions about damages to the CJEU before making a decision in the final instance. Whilst the OGH disagreed with the finding of the BVerfG, it considered it helpful to refer question to the CJEU in order to ensure a harmonized application of the law within the EU. Continue Reading

Privacy Group Launches Cookie Complaints Campaign Against EU Website Operators Based on Its Interpretation of Cookie Rules

Posted in GDPR, Privacy

The privacy organisation noyb will file more than 10,000 complaints for use of cookies contrary to its interpretation of compliance.

By Gail Crawford, Myria Saarinen, Tim Wybitul, Wolf Boehm, Charlotte Guerin, and Amy Smyth

On 31 May 2021, the nonprofit privacy organisation noyb (short for “none of your business”) launched a large-scale campaign to combat allegedly unlawful cookie banners and practices. According to a press release, noyb has already sent draft complaints to the operators of more than 500 frequently visited websites, and is intending to send a further 10,000 complaints this year. This is space where website operators arguably have considerable room for interpretation and to develop a variety of approaches for providing cookie information and obtaining cookie consent. Noyb’s campaign seeks to impose its interpretation of applicable cookie rules across the EU through threats of complaints to supervisory authorities.

Affected companies that fail to bring their cookie practices into compliance with noyb’s interpretation of the legal requirements will face complaints brought by noyb to the competent data protection supervisory authorities. Continue Reading

UAE’s New Consumer Protection Law: An End to Direct Marketing?

Posted in Legislative & Regulatory Developments

The new legislation extends both the protections available to consumers, as well as the obligations applicable to e-commerce retailers.

By Brian A. Meenagh and Avinash Balendran

With its recent implementation of a new consumer protection law, the United Arab Emirates has taken a significant step forward in protecting the rights of consumers. The new legislation — Federal Law No. (15) of 2020 (the New CPL) — entered into force on 16 November 2020, repealing Federal Law No. (24) of 2006. In particular, the New CPL extends both the protections available to consumers, as well as the obligations applicable to e-commerce retailers.

One stand-out provision in the New CPL is Article 4(5), which places an obligation on Entities (as defined below) to protect “consumers’ privacy and data security”. Article 4(5) also implies that Entities should not use consumer data for “the purposes of promotion or marketing”. Continue Reading

Virginia Consumer Data Protection Act: Second US State Passes Comprehensive Data Privacy Legislation

Posted in Legislative & Regulatory Developments, Privacy

The Act represents an accelerating trend among US states to attempt to pass comprehensive privacy legislation in the wake of the CCPA.

By Jennifer C. Archie, Michael H. Rubin, Marissa R. Boynton, and Alexander L. Stout

On March 2, 2021, Virginia Governor Ralph Northam signed comprehensive state privacy legislation titled the Consumer Data Protection Act (CDPA). Previously, the Virginia Senate unanimously passed the bill on February 5, 2021, and the Virginia House of Delegates followed suit in a special legislative session on February 18, 2021. The law will take effect on January 1, 2023. This post addresses some key provisions. Continue Reading

German Court: CJEU Must Clarify Whether GDPR Provides Materiality Threshold

Posted in GDPR

The decision means the CJEU will need to clarify the framework for GDPR damages claims.

By Tim Wybitul, Dr. Christoph Baus, and Dr. Isabelle Brams

The German Federal Constitutional Court has ruled that the Court of Justice of the European Union (CJEU) needs to clarify if the General Data Protection Regulation (GDPR) provides for a materiality threshold for GDPR damage claims. The decision overturns a judgment of the Goslar Local Court of 27 September 2019 regarding the unlawful sending of an advertising email. Continue Reading

Extensive Changes to Singapore’s Data Protection Regime Take Effect

Posted in Legislative & Regulatory Developments

Amendments to the PDPA significantly change Singapore’s data protection landscape, including mandatory data breach notification and criminal offences for mishandling of personal data.

By Farhana Sharmeen, Esther Franks, and Gen Huong Tan

On 1 February 2021, certain sections of the Personal Data Protection (Amendment) Act 2020 (the Act) took effect, implementing the following changes to the Personal Data Protection Act in 2012 (PDPA):

   •  Strengthened enforcement powers for the Personal Data Protection Commission (PDPC)

   •  New criminal offences for individuals for egregious mishandling of personal data

   •  Mandatory data breach notification requirements

   •  New provisions for “deemed” (i.e., implied) consent and exceptions to the PDPA consent requirements, namely the “legitimate interests” exception and “business improvement” exception

Other changes from the Act have yet to take effect but are expected to be introduced in phases. These include:

  • Increased financial penalties for companies in breach of the PDPA
  • A new right of data portability for individuals

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FTC Chair Rebecca Slaughter Outlines Data Privacy Enforcement Agenda

Posted in Legislative & Regulatory Developments, Privacy

Slaughter discusses the FTC’s priorities under the new administration, including ed-tech, health apps, and racial equity.

By Jennifer Archie, Michael Rubin, Marissa Boynton, and Jimmy Smith

On February 10, 2021, in her first major speech as acting chair of the Federal Trade Commission (the Commission, or the FTC), Rebecca Slaughter discussed the Commission’s enforcement priorities under the new administration — with a particular focus on deterring problematic data practices.

In her opening remarks at the Future of Privacy Forum, Slaughter stated that she would urge innovation and creativity and the use of all tools available to the Commission in order to bring about the best outcomes for consumers and to deter problematic privacy and data security practices.[i] She also noted that enhanced enforcement around ed-tech, health apps, and racial equity would be priorities for the new administration. In particular, Slaughter mentioned two types of relief that she believes the Commission should focus on going forward: disgorgement and effective consumer notice.

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