You did get the the memo that GDPR goes into effect next month?
Good! This new EU regulation has a few nuances and uncertainties that will generate more questions than answers over the coming months. Fortunately, we’ve spoken to many attorneys with deep expertise in GDPR. To help you untangle GDPR, the IOS staff reviewed the old transcripts of our conversations, and pulled out a few nuggets that we think will help you get ready.
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Does the GDPR cover US businesses? Is the 72-hour breach notification rule strict? Do you need a DPO? We have the answers below! If you have more time, listen to our podcasts for deeper insights.
Privacy By Design Raised the Bar
Inside Out Security: Tell us about GDPR, and its implications on Privacy by Design.
Dr. Ann Cavoukian: For the first time, right now the EU has the General Data Protection Regulation, which passed for the first time, ever. It has the words, the actual words, “Privacy by Design” and “Privacy as the default” in the stature.
What I tell people everywhere that I go to speak is that if you follow the principles of Privacy by Design, which in itself raised the bar dramatically from most legislation, you will virtually be assured of complying with your regulations, whatever jurisdiction you’re in.
Because you’re following the highest level of protection. So that’s another attractive feature about Privacy by Design is it offers such a high level of protection that you’re virtually assured of regulatory compliance, whatever jurisdiction you’re in.
US Businesses Also Need To Prepare for GDPR
Inside Out Security: What are some of the concerns you’re hearing from your clients on GDPR?
Sue Foster: When I speak to my U.S. clients, if they’re a non-resident company that promotes goods or services in the EU, including free services like a free app, for example, they’ll be subject to the GDPR. That’s very clear.
Also, if a non-resident company is monitoring the behavior of people who are located in the EU, including tracking and profiling people based on their internet or device usage, or making automated decisions about people based on their personal data, the company is subject to the GDPR.
Is the 72-hour rule as strict as it sounds?
Inside Out Security: What we’re hearing from our customers is that the 72-hour breach rule for reporting is a concern. And our customers are confused and after looking at some of the fine print, we are as well!! So I’m wondering if you could explain the breach reporting in terms of thresholds, what needs to happen before a report is made to the DBA’s and consumers?
Sue Foster: So you have to report the breach to the Data Protection Authority as soon as possible, and where feasible, no later than 72 hours after becoming aware of the breach.
How do I know if a breach is likely to ‘result in a risk to the rights and freedoms of natural persons’?
There is actually a document you can look at to tell you what these rights and freedoms are. But you can think of it basically in common sense terms. Are the person’s privacy rights affected, are their rights and the integrity of their communications affected, or is their property affected?
If you decide that you’re not going to report after you go through this full analysis and the DPA disagrees with you, now you’re running the risk of a fine to 2% of the group’s global turnover …or gross revenue around the world.
But for now, and I think for the foreseeable future, it’s going to be about showing your work, making sure you’ve engaged, and that you’ve documented your engagement, so that if something does go wrong, at least you can show what you did.
What To Do When You Discover A Breach
Inside Out Security: What are one the most important things you would do when you discover a breach? I mean if you could prioritize it in any way. How would you advise a customer about how to have a breach response program in a GDPR context?
Sheila FitzPatrick: Yeah. Well first and foremost, you do need to have in place, before a breach even occurs, an incident response team that’s not made up of just the IT. Because normally organizations have an IT focus. You need to have a response team that includes IT, your chief privacy officer. And if the person… normally a CPO would sit in legal. If he doesn’t sit in legally, you want a legal representative in there as well. You need someone from PR, communications that can actually be the public-facing voice for the company. You need to have someone within Finance and Risk Management that sits on there.
So the first thing to do is to make sure you have that group in place that goes into action immediately. Secondly, you need to determine what data has potentially been breached, even if it hasn’t. Because under GDPR, it’s not… previously it’s been if there’s definitely been a breach that can harm an individual. The definition is if it’s likely to affect an individual. That’s totally different than if the individual could be harmed. So you need to determine okay, what data has been breached, and does it impact an individual?
So, as opposed to if company-related information was breached, there’s a different process you go through. Individual employee or customer data has been breached, the individual, is it likely to affect them? So that’s pretty much anything. That’s a very broad definition. If someone gets a hold of their email address, yes, that could affect them. Someone could email them who is not authorized to email them.
So, you have to launch into that investigation right away and then classify the data that has been any intrusion into the data, what that data is classified as.
Is it personal data?
Is it personal sensitive data?
And then rank it based on is it likely to affect an individual?
Is it likely to impact an individual? Is it likely to harm an individual?
So there could be three levels.
Based on that, what kind of notification? So if it’s likely to affect or impact an individual, you would have to let them know. If it’s likely to harm an individual, you absolutely have to let them know and the data protection authorities know.
Do we need to hire a DPO?
Inside Out Security: An organization must appoint a data protection officer (“DPO”) if, among other things, “the core activities” of the organization require “regular and systematic monitoring of data subjects on a large scale.” Many Varonis customers are in the B2B space, where they do not directly market to consumers. Their customer lists are perhaps in the tens of thousands of recipients up to the lower six-figure range. First, does the GDPR apply to personal data collected from individuals in a B2B context? And second, how when does data processing become sufficiency “large scale” to require the appointment of a DPO?
Bret Cohen and Sian Rudgard with Hogan Lovells: Yes, the GDPR applies to personal data collected from individuals in a B2B context (e.g., business contacts). The GDPR’s DPO requirement, however, is not invoked through the maintenance of customer databases.
The DPO requirement is triggered when the core activities of an organization involve regular and systematic monitoring of data subjects on a large scale, or the core activities consist of large scale processing of special categories of data (which includes data relating to health, sex life or sexual orientation, racial or ethnic origin, political opinions, religious or philosophical beliefs, trade union membership, or biometric or genetic data).
“Monitoring” requires an ongoing tracking of the behaviors, personal characteristics, or movements of individuals, such that the controller can ascertain additional details about those individuals that it would not have known through the discrete collection of information.
Therefore, from what we understand of Varonis’ customers’ activities, it is unlikely that a DPO will be required, although this is another area on which we can expect to see guidance from the DPAs, particularly in the European Member States where having a DPO is an existing requirement (such as Germany).
Whether or not a company is required to appoint a DPO, if the company will be subject to the GDPR, it will still need to be able to comply with the “Accountability” record-keeping requirements of the Regulation and demonstrate how it meets the required standards. This will involve designating a responsible person or team to put in place and maintain appropriate policies and procedures , including data privacy training programs.