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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.

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”.