EU Council Agrees on Proposed ePrivacy Regulation
On February 10, 2021, the Council of the European Union (which includes representatives of the European Union (EU) member states, hereinafter Council) reached an agreement on the ePrivacy Regulation proposal that governs the protection of privacy and confidentiality of electronic communications services (ePrivacy Regulation).
The first draft of the ePrivacy Regulation was approved by the European Commission in 2017 and has since been under discussion in the Council. The current agreement in the Council comes shortly after Portugal took over the Council presidency (on January 1, 2021) and released a revised draft of the ePrivacy Regulation (on January 5), which was the 14th draft including the original EU Commission proposal. The present agreement is therefore a breakthrough in the negotiation process and allows the Portuguese Council presidency to start negotiations with the European Parliament on the final text.
French Council of State Partially Annuls CNIL Cookie Guidelines on Use of Cookie Walls
On June 19, 2020, the French Conseil d’État (“Council of State”) issued a decision partially annulling the Guidelines of the French Data Protection Authority (the “CNIL”) on cookies and other tracking tools (“Guidelines”). The Council of State ruled that the CNIL’s Guidelines could not prohibit the use of ‘cookie walls’, a practice which consists of blocking user access to a website where the user refuses to consent to cookies and other tracking tools. Nevertheless, the Council of State confirms the Guidelines on other key points, such as the requirement to facilitate the right to withdraw consent to cookies, the retention period for cookies and the information requirement for cookies not subject to a consent requirement.
Google Inc. v. Vidal-Hall: Opening the Doors to EU Data Protection Litigation?
The English Court of Appeal has recently issued a landmark judgment against Google which could open the door to data privacy litigation in the EU.
The case concerned the collection by Google of Safari users’ browser information, allegedly without their knowledge or consent. In its opinion, the Court of Appeal held that four individuals who used Safari browsers can bring a claim for breach of privacy and that the damages claimed can include distress – even in circumstances where there is no financial loss, as this had been the intention of the EU’s Data Protection Directive. To reach this result, the Court relied on EU legal authorities to override and displace limitations on recovery under the UK Data Protection Act.
Heads Up for Privacy, Data Protection and Cybersecurity in 2014
The new year will ring in significant privacy, data protection and cybersecurity changes in the U.S., Europe, Asia and elsewhere around the world. Below are some key developments and possible concrete action items for General Counsels, Chief Privacy Officers and Chief Information Officers:
EU Website Cookie Consent Requirements Now Being Enforced
The deadline of 26 May 2012 for businesses to comply with new EU website cookie consent requirements in the UK has now passed. Under the EU’s amended e-Privacy Directive 2002/58/EC new rules were introduced last year for businesses to obtain the consent of website users to place cookies on a user’s computer. Although EU Member States were required to implement the consent requirements by 25 May 2011, the UK’s Information Commissioner’s Office (“ICO”) gave businesses a 12 month grace period to become compliant with the new law which ended on 26 May 2012. Many other EU Member States have still to implement the cookie consent requirements with only 20 of the 27 Member States having so far implemented the requirements into their national laws.1
The new EU cookie consent requirements contain an exception where the website is using a cookie “that is strictly necessary” to provide the service explicitly requested by the user. The ICO considers this exception should be narrowly interpreted and cannot, for example, be used to exclude cookies used for analytical purposes, such as counting the number of visits to a website, from the new consent requirements. Failure to comply with the EU cookie consent requirements can lead to enforcement action including fines from national data protection authorities.
UK Guidance
The cookie consent requirements under the amended ePrivacy Directive were implemented in the UK through “The Privacy and Electronic Communications (EC Directive) (Amendment) Regulations 2011” (the “UK Regulations”). The ICO has published helpful guidance on implementing the UK Regulations entitled “Guidance on the rules on use of cookies and similar technologies” (the “UK Guidance”).
Regarding the scope of the UK Regulations, the UK Guidance states that websites based outside of the EU, designed for the European market or providing products or services to customers in the EU, should consider that their users in the UK and the EU will clearly expect that information about cookies will be provided to them and their consent to set cookies obtained.
Providing clear and comprehensive information to the user
In addition to obtaining consent, the requirements under the ePrivacy Directive include that the user is provided with “clear and comprehensive information” about the purposes for which the information, such as that collected through cookies, is used.
The ICO suggests that wherever possible, the placing of cookies on a user’s terminal equipment should be delayed until the user has had the opportunity to understand what the cookies are being used for and so they can make their choice to accept the cookies or not. However, the ICO acknowledges that obtaining prior consent might be difficult as many websites set cookies as soon as a user accesses a website. The ICO therefore states that at present websites should be able to demonstrate that they are doing as much as possible to reduce the amount of time before the user receives information about cookies and is provided with the option to accept the use of cookies.
Responsibility for compliance
Although the UK Regulations do not define who should be responsible for complying with the new requirements, the ICO clearly states in the UK Guidance that “where a person operates an online service and any use of cookies will be for their purposes, it is clear that that person will be responsible for complying with this Regulation”. The ICO also makes it clear that where third party cookies are used through a website, the person operating the website and the third party should be responsible for complying with the UK Regulations. However, the ICO acknowledges that it could be challenging in practice for third parties to comply, and therefore proposes that a third party using cookies on a website should consider putting a contractual obligation into agreements with the website provider “to satisfy themselves that appropriate steps will be taken to provide information about the third party cookies and obtain consent.”
Potential solutions to gain the consent of the user:
The UK Guidance refers to a number of potential solutions to obtain consent for use of cookies including:
Use of pop ups and similar techniques, such as header or footer bar on the home page – while using a pop up to directly ask a user if they agree to the use of cookies will amount to consent if they click yes, as the ICO acknowledges this could spoil the user experience if the website uses several cookies. Moreover, the ICO comments that some users might not click on the options available and go straight to another part of the website. In these circumstances it may be possible to infer consent from the fact that the user has seen a clear notice and actively indicated that they are comfortable with cookies by clicking through and using the site.
Terms and conditions – when users open an online account or sign in to use the services, they could consent through terms and conditions to the use of cookies. The ICO specifies that changing the terms of use alone to include consent for cookies is not sufficient even if the user had previously consented to the global terms. To satisfy the new rules on cookies, the website operator must make users aware of the changes and specifically that the changes refer to the use of cookies. The website operators will then need to gain a positive indication that users understand and agree to the changes. The positive indication is commonly obtained by asking users to tick a box.
Settings-led consent – some cookies are set up when a user confirms what he/she wants to do or how he/she wants the site to work, for example, when selecting a feature such as the language of the website. The website should, during that process, explain to the user that by allowing the website to remember the user and the way he/she wants to use the website, the user gives the website consent to use cookies.
Feature-led consent – some information is stored in the user’s computer when the user decides to use a particular feature of a website such a watching a video or when the website remembers what the user did on a previous visit in order to personalise the content of the website. In these cases the website can ask for the consent to set a cookie at this point.
Browser settings – the view of the ICO is that most browser settings are not currently sophisticated enough to allow a website provider to assume that the user has given his consent. The UK Guidance confirms that the ICO and the UK Government are currently working with the major browser manufacturers to establish a new browser solution.
Steps to take now
Many businesses have been considering the best ways to obtain consent to the use of cookies for some time. For those businesses that have not yet implemented a cookie consent solution for their websites it is important that they do so now, particularly as the UK deadline has now passed. According to the UK Guidance the first steps should be:
Cookie Audit – businesses should check what cookies they are using on their websites, confirm the purposes, what data each cookie holds and the type of cookie (i.e. session or persistent and first or third party cookie). This could involve carrying out a comprehensive audit of the websites. The cookies used should also be analysed to determine which, if any, are “strictly necessary” and therefore might not need consent.
Cookie Assessment of Intrusiveness – the more intrusive a cookie the more priority should be given to getting meaningful consent. Some analytical cookies may have a limited privacy impact while cookies involved in creating detailed profiles of an individual’s browsing activity can have a significant privacy impact. An assessment of the intrusiveness of the cookies used should also be undertaken.
Cookie Consent Solution – in addition to deciding on the most appropriate of the cookie consent options, which are referred to above, it is also necessary to consider the information on cookies that should be provided to users. According to the ICO, for most users it may be helpful to provide a broad explanation of the way cookies operate and the categories of cookies that are used on the website.
If you have any questions regarding this update, please contact:
John Casanova, Partner
jcasanova@sidley.com
+44 20 7360 3739
William Long, Counsel
wlong@sidley.com
+44 20 7360 2061
1 Austria, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Greece, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Malta, Slovakia, Spain, Sweden The Netherlands and the UK.
This Sidley update has been prepared by Sidley Austin LLP for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this without seeking advice from professional advisers.
Attorney Advertising – For purposes of compliance with New York State Bar rules, our headquarters are Sidley Austin LLP, 787 Seventh Avenue, New York, NY 10019, 212.839.5300 and One South Dearborn, Chicago, IL 60603, 312.853.7000. Prior results do not guarantee a similar outcome.
Business Concern Over New EU Consent Requirement to Use Website Cookies
New EU cookie consent requirement
Amendments to the EU’s ePrivacy Directive have meant that since 25 May 2011 the EU has required website operators to obtain the consent of users to the use of cookies. This is a significant development and it is causing considerable concern among businesses. The new consent requirements for use of cookies, which consist of small text files that are used by virtually every website to recognise a user’s computer and collect information on a user’s activities and preferences, has caused a storm of debate as regulators and businesses struggle to find a practical way of obtaining consent.
There is also particular concern regarding compliance with the new requirements in relation to so called “third party” or “tracking” cookies used in behavioural advertising, where information from cookies is shared with third parties. In these circumstances obtaining consent may be more complex and care needs to be taken to make sure users are made aware of what data are being collected and by whom.
There is only one exception to the new EU consent requirement where the website is using a cookie “that is strictly necessary” to provide the service explicitly requested by the user. However, this is a narrow exception covering, for example, use of a cookie to allow the website to remember items placed in a virtual shopping basket and would not apply, to use of cookies to collect website analytics data.
Confused transposition process in the EU
Another particular concern is the lack of a harmonised approach to implementation of the new consent requirements in different EU Member States. Despite the 25 May 2011 implementation deadline only ten EU Member States have yet implemented the requirements into their national laws, including Estonia, Finland, Ireland, Latvia, Lithuania, Malta, Sweden, Hungary, Luxembourg and the UK. The table on page 3 summarises the current position.
There is also a lack of clarity on how in practice consent may be obtained and in particular whether browser settings can be used to obtain consent. It is understood that in Ireland, Luxembourg, Sweden and the UK the implementing legislation or guidance expressly provides that consent may result from the browser settings. Of these early adopting Member States national guidance has only been published, so far, in Ireland, Sweden and the UK although further national guidance may be published in due course.
In the UK, the Information Commissioner’s Office (the “ICO”) has issued guidance on what may constitute a sufficient opt-in consent:
- Pop ups and similar techniques – using pop ups on the website screen for users to click that they consent to use of cookies, although the ICO acknowledges that this could spoil the user experience.
- Terms and conditions – when users open an online account, or sign in to use the services, they could consent through terms and conditions to operation of the account and to use of cookies but a positive indication of consent is required such as through the user ticking a box.
- Settings–led consent – obtaining consent as part of the process by which the user confirms what they want to do, or how they want the site to work, for example, when selecting a feature as to the size of text they want displayed.
- Feature–led consent – placing text in the footer or header of the web page which is highlighted or which turns into a scrolling piece of text when wanting to set a cookie on the user’s device.
- Browser settings – using browser settings to obtain consent, although the view of the ICO is that most browser settings are not sophisticated enough to allow a website provider to assume that the user has given their consent to the website using a cookie.
To allow businesses to achieve compliance the UK has a grace period of 12 months until May 2012 during which time the ICO will refrain from using its enforcement powers although businesses are expected to take steps to comply with the new requirements. It is also understood that in Sweden a grace period, expected to be around 6 months, will also be applied.
Another question that is still not clear is whether national Member State laws implementing the new cookie consent requirement will apply to website operators not established in a Member State, for example a US website accessed by French consumers.
Practical steps to be considered by businesses now
While there are still some unanswered questions concerning the implementation and scope of the new EU cookie consent requirement it is important that website operators start to consider the new requirements now and how they may apply to their business. Some practical steps that can be taken now include:
- monitoring the implementation of the cookie consent requirement in different Member States over the next few months;
- carrying out an audit of the business use of cookies, including the type of cookies used (e.g. first party or third party cookies, session only cookies or persistent cookies);
- updating privacy policies to include more explicit disclosures on the use and ability to opt-out of use of cookies;
- evaluating consent options, taking into account customer impact, costs and applicable laws; and
- reviewing existing arrangements with service providers concerning the collection of data and use of cookies.
John Casanova at jcasanova@sidley.com or on +44 (0)20 7360 3739, Jens Rinze at jrinze@sidley.com or on +49 69 22 22 1 4020, William Long at wlong@sidley.com or on +44 (0)20 7360 2061, or the Sidley lawyer with whom you usually work.
1 Based on adopted or draft legislation or based on views of Government authorities or national Data Protection Authorities. Some of the information in this update is based on views of local counsel which is likely to change and where Sidley Austin LLP is not admitted.
This Sidley update has been prepared by Sidley Austin LLP for informational purposes only and does not constitute legal advice. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Some of the information in this update is based on views of local counsel which is likely to change and where Sidley Austin LLP is not admitted. Readers should not act upon this without seeking advice from professional advisers.
Attorney Advertising – For purposes of compliance with New York State Bar rules, our headquarters are Sidley Austin LLP, 787 Seventh Avenue, New York, NY 10019, 212.839.5300 and One South Dearborn, Chicago, IL 60603, 312.853.7000. Prior results do not guarantee a similar outcome.