Italian DPA Imposes Largest Ever Fine Imposed by a European Data Protection Authority: UK Payments Company Found to Have Breached Consent and Other Rules

On February 2, the Italian Data Protection Authority, known as the “Garante,” imposed a fine of EUR 5,880,000 on a UK money transfer company that it found to be in violation of Italian data privacy rules. This is the largest ever publicly-known fine imposed by an EU data protection authority, and it approaches the level of fines that are likely to be imposed under the EU’s General Data Protection Regulation (“GDPR”) that will come into force in May 2018. Although the GDPR is not yet in force, the Garante’s enforcement action shows that European data protection authorities are willing to levy the kind of fines allowed by the GDPR.

According to the Garante, Sigue Global Service Limited (“Sigue”), which is registered in the UK but has a branch in Rome, worked with other companies to split large monetary transfers to China in order to evade anti-money laundering rules.  The Italian regulators found that Sigue attributed money transfers to over one thousand individuals, using their personal data obtained from a database of photo identification, even though those individuals did not consent to the processing of their data, or even know about the transfers.  Some of the transfers were executed through forms that were not signed, or signed by deceased or non-existent individuals.  The Garante found a separate privacy violation by Sigue with regard to each of the more than one thousand privacy code violations.

The Garante found that the database used to carry out the violations was of sufficient size and importance to trigger Italian data privacy sanctions. Five companies were fined for their involvement in this arrangement.  The fine imposed on each company reflects all the violations in which the company played a role.

The Garante fined the companies EUR 10,000 for each data subject whose data consent rights were violated and applied an additional EUR 50,000 fine because of the database size and importance. For Sigue, which processed the data of 583 data subjects without their consent, this accumulated to EUR 5,880,000, the largest fine ever imposed by a European data protection authority. Total fines for all five companies exceeded EUR 11 million.

The Garante’s enforcement action demonstrates the willingness of European data protection authorities to impose large fines for breaches of data privacy requirements, even under the current EU data protection framework, which is generally less onerous than the GDPR, and is indicative of the approach that European data protection authorities could adopt under the GDPR. The GDPR allows for fines of up to the greater of 20 million Euros or 4% of a business group’s annual worldwide gross revenues to be imposed for certain breaches of the GDPR. To avoid such fines, it is critical to put in place a robust GDPR implementation plan in advance of the GDPR coming into force in 2018.