On 2 September 2020, the European Data Protection Board (EDPB) published draft guidelines on the concepts of controller and processor under the GDPR (Draft Guidelines). The Draft Guidelines are intended to expand on and ultimately replace the guidance issued by the former Article 29 Working Party in 2010 (WP29 Guidance). The Draft Guidelines should be reviewed carefully to assess whether: (i) the understanding of an organisation’s role as a controller, joint controller or processor should be revised; and (ii) changes to existing vendor processes and contracts are needed in light of the assessment of guarantees provided by vendors and the more detailed processing provisions and ongoing diligence now required.
The Draft Guidelines consist of two parts. The first part seeks to further clarify the meaning of these concepts—which are crucial in determining compliance responsibilities under the GDPR—by reference to various examples. The second part provides detailed guidance on their respective roles and responsibilities, and the relationships between them.
The Draft Guidelines, accessible here, are subject to public consultation until 19 October 2020.
Following the Court of Justice of the European Union’s (“CJEU”) decision in Data Protection Commissioner v Facebook Ireland Ltd and Maximillian Schrems (“Schrems II”), the Swiss Federal Data Protection and Information Commissioner (“FDPIC”) concluded in a position paper published on 8 September that the Swiss-US Privacy Shield no longer provides a valid mechanism for the transfer of personal data from Switzerland to the US.
The U.S. Department of Commerce, Bureau of Industry and Security (BIS) published an advance notice of proposed rulemaking (ANPRM) soliciting comments to identify foundational technologies essential to U.S. national security by October 26, 2020 (the Foundational Technologies ANPRM). The ANPRM is only one step in a multiyear process through which the U.S. government transforms the regulations restricting the availability of U.S.-sourced technology in the global marketplace.
This long-awaited ANPRM launches an intra-agency review process required under Section 1758 of the Export Control Reform Act of 2018 (ECRA), which Congress passed in the National Defense Authorization Act for Fiscal Year 2019 (2019 NDAA). ECRA directed BIS to identify and establish controls on the export, reexport, or transfer (in country) of emerging and foundational technologies essential to the national security of the United States. On November 19, 2018, BIS issued an ANPRM on identification of emerging technologies (the Emerging Technologies ANPRM), indicating that a separate notice for foundational technologies was forthcoming.
Today’s Foundational Technologies ANPRM can be found here. Sidley’s prior updates on ECRA and the Emerging Technologies ANPRM can be found here.1 Here we summarize five key takeaways from today’s notice.
Schrems II — Legal Analysis
With the EU-U.S. Privacy Shield declared invalid as a result of the Schrems II decision, there will be an immediate impact on the future of international data flows and potentially for your business.
Join OneTrust DataGuidance, Sidley, and speakers from industry for a webinar taking a detailed look at the Schrems II decision and discussing what additional safeguards may be required for international transfers following the decision, as well as legal analysis into whether there is essential equivalence between U.S. and EU privacy protections.
On July 23, 2020, the European Data Protection Board (the “EDPB”) published a set of important responses to a set of 12 frequently asked questions put forward to supervisory authorities regarding the recent Court of Justice of the European Union (“CJEU”) decision in Case C-311/18 – Data Protection Commissioner v Facebook Ireland Ltd and Maximillian Schrems (“Schrems II”) (“FAQs”).
Below is a summary of the key take-aways from the EDPB’s FAQs, which is intended to address a range of topics including the lack of a grace period following the decision and the conditions surrounding the use of certain data transfer mechanisms:
(*As with all posts, this article is for informational purposes only; Sidley Austin LLP does not have offices in or practice law in Brazil; Felipe Saraiva is a former Sidley associate licensed to practice law in Brazil.)
The enactment of Law n. 13.709/2018 (the Brazilian Data Protection Law, or “LGPD”) in 2018 was followed by great enthusiasm from the general public in Brazil. Indeed, the comprehensive law has been viewed as a necessary measure for the country to join a select but growing group of nations in the systematic protection of individuals’ personal data.
Originally, the LGPD provided for a 12-month grace period for its enforcement; however, this term was subsequently extended to 24 months, as legislators understood the initial time frame wouldn’t give companies enough time to adapt. As previously analyzed in an article by these authors published on January 20, 2020, the LGPD’s provisions require a great deal of compliance effort from all organizations that are subject to the law.
In view of the current crisis caused by the spread of COVID-19, the compliance difficulties companies are facing, and the fact that the actual creation of the National Agency of Data Protection (“ANPD”) called for in the law is still pending, Brazilian legislators are further extending the LGPD’s grace period; these legislators now indicate that enforcement of the law’s general provisions are extended to May 3, 2021, while its legal sanctions would become enforceable as of August 1, 2021.
In a decision with significant implications for international trade and cross-border data flows, the EU’s highest court – the Court of Justice of the European Union (“CJEU”) ruled on 16 July 2020 that a key legal mechanism (called the EU-US Privacy Shield program) used to enable transfers of personal data from the European Union (“EU”) was invalid, while also potentially requiring additional protections to be implemented when another key transfer mechanism (called Standard Contractual Clauses) is used. The case – Data Protection Commissioner v. Facebook Ireland, Max Schrems (“Schrems II”) – considered the validity of the EU-US Privacy Shield (“Privacy Shield”) program (a privacy certification made available for US organizations through an agreement between the European Commission and the US government) and Standard Contractual Clauses (“SCC”) (a form of international data transfer agreement made available for use by the European Commission).
Data is key to innovation, growth, and staying competitive in the payments sector. In recent years, there has been a massive increase in the volume of data maintained and processed by payment service providers. Regulators and policymakers on both sides of the Atlantic are imposing increasingly prescriptive cybersecurity regulatory frameworks and closer scrutiny upon companies, while new and escalating cybersecurity threats challenge standard safeguards.
For the latest insights on the risks posed and effective ways to mitigate them, please join OneTrust DataGuidance and Sidley for a webinar focusing on the cybersecurity issues confronting the payments and fintech sectors in the EU, UK, and U.S.
The Supreme Court has recently granted Google permission to appeal the Court of Appeal’s decision in the case of Lloyd v Google LLC () EWCA Civ 1599). The class action brought against Google by Richard Lloyd, the former editor of consumer protection rights group “Which?”, relates to the alleged tracking of personal data by Google of 4.4 million iPhone users and subsequent selling of the users’ data to advertisers, without the users’ knowledge and consent. Google is now appealing the Court of Appeal’s decision granting Mr Lloyd permission to serve his representative action on Google. This landmark case is of particular importance as it has the potential to significantly widen the scope for claims to be brought in respect of a failure to protect data under the GDPR.
There has been a rapid increase in collaboration between fintechs and other technology firms and more traditional payment service providers (PSPs) such as banks, merchant acquirers, and money transmitters. While fintechs and technology firms are often seen as direct competitors of traditional PSPs, in a market driven by innovation, both sides of the market increasingly consider collaboration a mutually beneficial way to play to each participating firm’s strengths. For more traditional PSPs, the technologies that a fintech or technology firm develops can help enhance and streamline, and in some cases modernize, the services provided to customers. For a fintech or technology firm, partnering with a PSP can provide an efficient and effective way to expand into the payment services market, particularly for customers who are more inclined to use traditional PSPs.
Regulators are monitoring these developments with growing interest and with an eye to potential risks to customers and markets as well as their ability to supervise regulated firms and their operations. This post highlights a number of EU/UK regulatory issues that fintechs, technology companies, and PSPs should consider when collaborating with one another.