In our monthly GDPR Updates we discuss various key issues of the General Data Protection Regulation, (EU) 2016/679 (the GDPR), which applies from 25 May 2018. With the introduction of the GDPR, the existing Directive 95/46/EC and its implementation in the local laws of the various EU Member States will be repealed. The GDPR will bring significant and substantial changes with respect to the processing of personal data. It introduces several new concepts, such as Privacy by Design, Privacy by Default and Data Portability. As the GDPR contains several onerous obligations that require significant preparation time, organisations are recommended to timely commence the implementation process.
We notice that personal data protection is becoming more and more topical within organisations, and that the first steps towards compliance with the GDPR are undertaken. Our GDPR Updates illustrate the relevant changes resulting from the GDPR and provide readers with practical recommendations on the implementation of the GDPR within their organisations.
In the August edition of our GDPR Updates we address the position of the data processor. Under the GDPR the data processor is given certain specific responsibilities, meaning that it will no longer be only the data controller who is responsible for compliance with the privacy regulations. From 25 May 2018 also the data processor can be held liable for not complying with the GDPR requirements and additional legislation relating thereto.
If the data processor falls within the territorial scope of the GDPR (data processors will be confronted with an expansion of the territorial scope of the European privacy regulations), the data processor could face the following obligations:
- the obligation to designate a representative in the EU if the data processor is not established in the EU but its processing is related to (i) offering of goods and/or services to data subjects in the EU; or (ii) monitoring of data subjects in the EU;
- complying with the mandatory requirements with regard to the content of the processing agreement as set out in Article 28 GDPR;
- the obligation to maintain a written record of processing activities. Note that this obligation is not applicable to organisations employing fewer than 250 employees, unless (i) the processing is likely to result in a risk to the rights and freedoms of data subjects, (ii) the processing is not occasional, or (iii) the processing includes special categories of data. Data processors that provide services whereby the processing of personal data is standard practice are not likely to fall within the scope of the exceptions and will therefore be obliged to maintain a written record of processing activities (e.g. SaaS, hosting and other cloud service providers);
- the obligation to designate a data protection officer if (i) the data processor is a public authority or body; (ii) its core activities consist of processing on a large scale of special categories of personal data or data relating to criminal convictions; or (iii) its core activities consist of processing operations that require regular and systematic monitoring of data subjects on a large scale; and
- the obligation to notify the data controller (without undue delay) after becoming aware of a breach of the processed personal data and assist the data controller in ensuring compliance with its subsequent obligations towards the competent supervisory authorities and (where necessary) the data subjects.
Instead of only being contractually liable on the basis of a processing agreement with a data controller, under the GDPR data processors will also be subject to administrative liability in case of non-compliance. Administrative fines can increase up to EUR 20 million or (if higher) 4% of the total worldwide annual turnover of the organisation concerned. In addition to administrative liability and contractual liability towards the data controller, a data processor can be held liable towards data subjects who have suffered damages as a result of a breach of the GDPR by the data processor.
Organisations are recommended to carefully examine their positions within the various data processing activities and to make a very clear assessment on the associated responsibilities and obligations. A careful inventory should be made of the parties involved in the various personal data processing activities within an organisation and their roles (data controller/co or joint data controller/data processor/sub-processor, et cetera). This is particularly relevant as the division of roles directly influences the responsibilities a party has in the personal data processing activity, as well as the corresponding liability.
Please click here to read the entire August GDPR Update.