Privacy Lawyer & Attorney : Proskauer Rose Law Firm : CAN-SPAM, FCRA, FACTA

For some years, the ICO has had only limited means of securing compliance with section 55 of the DPA, which makes it a criminal offense to knowingly or recklessly obtain or disclose personal data without consent. While the ICO has had the power to take action against individuals who violated section 55, the imposition of a penalty was left to the courts.

All this changed on May 9, 2008 with the enactment of the Criminal Justice and Immigration Act. The Act grants the ICO the power to impose fines directly for violations of section 55 of the DPA. This increase in the ICO’s authority mirrors that of other U.K. regulators like the Financial Services Authority, which in 2001 obtained the power to impose fines on banks and other financial institutions for data security failures.

Proskauer summer associate Noemi Blasutta contributed to this post.

Definition of Personal Data

According to an earlier opinion issued by the Working Party, personal data includes an individual’s Internet search history if the individual to whom it relates is identifiable. In this most recent opinion, the Working Party found that, although IP addresses are not usually directly identifiable by search engines, the necessary data usually is available to identify the user(s) of the IP address. Therefore, unless a search engine operator can ensure “with absolute certainty” that data corresponding to users cannot be identified, it must treat all IP information as personal data.  

Scope

Article 4 of the Data Protection Directive provides that each Member State will apply its national data protection law to data processing in certain circumstances. The Working Party concluded that the Data Protection Directive applies even where a search engine company’s headquarters is outside the European Economic Area. Where the search engine service provider is not based in one of the Member States, the Data Protection Directive applies where either: (a) the search engine provider has an establishment in a Member State; or (b) the search engine makes use of equipment in the territory of a Member State. “[U]se of equipment” includes a user’s personal computer.

Thus, in the case of multi-national search engine providers:

• Those that are established in a Member State are subject to the Member State’s national data protection laws in which the search engine provider is established;

• Those that are not established in a Member State are subject to the Member States’ national data protection laws in each Member State in which the service provider makes use of equipment in the territory of that Member state for the purposes of processing personal data (e.g., the use of a cookie).

The Working Party expressly excluded from its opinion search functions on websites that were limited to searching only the website’s own domain. 

Processing of Personal Data

The Working Party Opinion found that, in general, search engines must only process personal data for legitimate purposes and the amount of data processed and/or retained must be relevant to and not excessive in respect of the purposes to be achieved by the processing. Search engine providers are “fully responsible under data protection laws for the resulting content related to the processing of personal data.” Specifics are outlined below.

Collection and Processing

The Working Party found that collection and processing of personal data must be based on at least one legitimate ground. Legitimate grounds include:

(1)   Consent of the user for the search engine provider to use specified data for a specified purpose (Data Protection Directive Art. 7(a));

(2)   Necessary for the performance of a contract (Data Protection Directive Art. 7(b)) – however, the Working Party expressly rejected any argument that users enter into a de facto contractual relationship when using services offered by a search engine provider;

(3)   Necessary for the purposes of a legitimate interest pursued by the controller (Data Protection Directive Art. 7(f)):

(a)    Service improvement – however, this is not a legitimate reason for storing data that has not been anonymized;

(b)   Systems security – however, any personal data stored for system security must be subject to a strict purpose limitation and cannot be used for any other purpose;

(c)    Fraud prevention – however, the amount of personal data stored and/or processed and the amount of time it is retained depends on whether and for how long the data is necessary for fraud detection and prevention;

(d)   Accounting – the Working Party expressed “serious doubts that personal data of search engine users are really essential for accounting purposes” and called on search engine providers to develop accounting mechanisms that are more privacy-friendly;

(e)    Personalized advertising – the Working Party expressed its “clear preference for anonymi[z]ed data”;

(f)     Law enforcement and legal requests – the Working Party recognized that search engine providers must comply with legitimate requests from law enforcement and legal orders, but noted that “compliance should not be mistaken for a legal obligation or justification for storing such data solely for these purposes.”

Retention

The Working Party found as follows:

(1)   The Working Party sees no basis for a retention period of more than six (6) months in any instance and the retention period should be “no longer than necessary for the specific purposes of the processing.” Where data is retained for longer than six (6) months, a search engine provider must demonstrate that such retention “is strictly necessary for the service.”

(2)   Search engine providers must delete personal data when a legitimate purpose no longer exists; in the alternative, search engine providers may anonymize data as long as the anonymization is completely irreversible.

(3)   Search engine providers must inform users about the applicable retention policies for all types of user data they process.

Other Specific Practices

The Working Party found as follows:

(1)   Persistent cookies containing a unique user ID are personal data and should be defined to allow an improved web surfing experience and a limited cookie duration. Moreover, users must be informed about the use and effect of cookies.

(2)   Where search engine providers utilize a cache functionality, they should only retain content in a cache for the “time period necessary to address the problem of temporary inaccessibility to the website itself” – any caching period of personal data contained in indexed websites beyond this necessity of technical availability should be considered an independent republication.

(3)   Correlation of personal data across services and platforms for authenticated users can only be legitimately done based on informed consent by the user.

(4)   Search engine providers may not suggest that using their service requires a personalized account by automatically re-directing unidentified users to a sign-in form for a personalized account.

User Rights

Following a period of public consultation, Dubai (the Dubai International Financial Center, or DIFC) strengthened its previous data protection law of 2004, giving it some extra teeth and enhanced enforcement powers by a newly created independent Office of Commissioner of Data Protection.   The law protects all "personal information", which is broadly defined as "any information relating to an identifiable natural person."  The law also protects "sensitive data" such as information about a person's political affiliation or racial identity.  

Arguably the most significant aspect of the new law is its international transfer provisions, codified at Articles 11 and 12, which govern the transfer of personal data out of the DIFC to third countries.  Like the European data directive, the Dubai law allows for the transfer of personal information to countries that offer an "adequate level of protection."  Transfer of information to countries that fall short of providing the adequacy requirement (such as, presumably, the United States) is permitted-- provided, however, the newly appointed data protection Commission gives its consent to the transfer.  

The new law's regulations specify that a data controller (e.g. an employer) must apply to the Commissioner of Data Protection for a permit to transfer the data to a country with less than adequate protection.  Unfortunately, however, the regulations do not specify which countries qualify as those that do offer an adequate level of protection-- although one would not be surprised if Dubai simply adopted the EU's list of "certified" countries, such as Argentina, Switzerland, Canada, and the Isle of Man.  

Fortunately, the application process is greatly simplified by a well-drafted and user-friendly application that may be filled out by the data controller and sent to the Commissioner (there is no fee for the application to seek a permit to transfer data; nor is there a fee to apply for a permit to process sensitive data, also required under the Act).    

While it remains to be seen how strictly the new data protection law is enforced, employers operating in Dubai would be well-advised to comply with its provisions.   Based on the text of the law and its similarities to the EU model, one would not be surprised to find the EU soon anointing Dubai as the first Arab nation to have a data protection law that offers substantially similar protections, allowing for the free transfer of data.