Chapter 12: Impact Assessments, DPOs and Codes of Conduct – Unlocking the EU General Data Protection Regulation

Under the GDPR, the position on this issue has materially changed (e.g., the GDPR has introduced a new obligation that did not previously exist).

Under the GDPR, the position on this issue has not materially changed (e.g., although the wording may be different in the GDPR, the nature of the relevant obligation is unchanged).

The impact of the GDPR on this issue is likely positive for most organisations (e.g., because the GDPR provides certainty in relation to a previously unclear issue).

The impact of the GDPR on this issue is likely neutral for most organisations (e.g., because the requirements under the GDPR and the Directive are essentially the same).

The impact of the GDPR on this issue is likely negative for most organisations (e.g., because the GDPR introduced a new obligation on organisations).

The impact of the GDPR on this issue is unknown at this stage (e.g., because the impact on organisations is dependent upon secondary guidance that has not yet been written).

Impact Assessments

In order to assess the potential risks arising out of any new processing activity, EU data protection law requires organisations to conduct an Impact Assessment.

The WP29 has issued Guidelines on Impact Assessments (WP 248) (the "Impact Assessments Guidelines") which provide further clarity on the requirements around Impact Assessments.

Rec. 53

Member States could legislate regarding specific types of processing that were likely to pose high risks. However, the Directive did not expressly require controllers to conduct Impact Assessments.

 Rec.84, 90-94; Art.35; WP29 Impact Assessment Guidelines

Where a new processing activity is proposed (especially where new technologies will be used) resulting in a high degree of risk for data subjects, the controller must first conduct an Impact Assessment. Factors that elevate the level of risk, according to the WP29, include:

• evaluation of data subjects (e.g., performance at work, health; behaviour; or location);
• automated decision making with significant effect on a person (e.g., automated refusal of credit);
• systematic monitoring (especially covert monitoring);
• processing Sensitive Personal Data;
• large-scale processing;
• combining or matching separate datasets;
• processing affecting vulnerable individuals;
• processing using untested technology; and
• Cross-Border Data Transfers.

A single Impact Assessment can cover multiple processing operations that present similar risks. However, the Impact Assessment may need to be an on-going process, depending on the circumstances of the data processing. Any organisation that conducts a DPIA must seek the advice of its DPO (if any).

 The express obligation to conduct Impact Assessments is, in principle, a new burden on controllers. However, even under the Directive, many DPAs expected controllers to conduct Impact Assessments in relation to new, high-risk processing activities.

 By conducting Impact Assessments, controllers may identify and address risks that would otherwise not have been detected. This may help controllers to avoid breaches of the GDPR that might otherwise have occurred.

Prior Consultation

Whenever an organisation is planning to engage in a form of processing that presents particular risks to the rights and freedoms of data subjects, that organisation should consult the relevant DPA(s).

Rec.54; Art.20

Member States were responsible for creating a list of processing operations likely to present specific risks to the rights and freedoms of data subjects. Where a controller intended to engage in a processing activity on such a list, it was first required to consult with the relevant DPA.

 Rec.94-95; Art.35(4)-(6), 36

DPAs are responsible for creating a list of the types of processing that are subject to Impact Assessments. Those lists must be put through the Consistency Mechanism and then sent to the EDPB (see Chapter 15). Where a controller intends to engage in a processing activity on such a list, it must first consult with the relevant DPA.

 The obligation to conduct Impact Assessments imposes a new, and in some cases significant, compliance burden on controllers.

 The requirement to apply the Consistency Mechanism (see Chapter 15) in respect of high risk processing activities should mean that businesses face more consistent enforcement measures from DPAs.

Appointment of a DPO

A DPO is a person who provides the primary contact point for data protection issues within an organisation.

The WP29 has issued Guidelines on Data Protection Officers (WP 243) (the "DPO Guidelines") which provide further clarity on the key terms of Art 37, including "core activities", "large scale" and "regular and systematic monitoring".

N/A

The Directive did not explicitly require organisations to appoint a DPO. In some Member States (e.g., Germany, Sweden) the appointment of a DPO offered certain advantages (e.g., by obviating the need to register with the local DPA). Many organisations in other Member States appointed DPOs simply to ensure that responsibility for data protection compliance was allocated to a specific person, and did not slip through the gaps.

 Rec.97; Art.37; WP29 DPO Guidelines

A controller or processor must appoint a DPO if local laws require it to do so, or if its core data processing activities involve:

• regular and systematic monitoring of data subjects on a large scale; or
• processing Sensitive Personal Data on a large scale.

A corporate group may collectively appoint a single DPO.

Organisations that are not required to appoint a DPO are free to do so voluntarily (although the DPO Guidelines note that a voluntary DPO is subject to the same requirements as mandatory DPOs). If a DPO is appointed, the organisation must publish the details of the DPO, and communicate those details to the relevant DPA.

 The obligation to appoint a DPO may impose a significant burden, especially for smaller organisations.

 The DPO Guidelines clarify that a single DPO can be appointed for a corporate group (or several entities within a group) provided that he or she is easily accessible from each business location for which he or she is responsible. Explicit permission to appoint a single DPO for a corporate group is a welcome development for organisations, but it will be important to ensure that such a DPO is provided with sufficient resources to perform the role.

Qualifications of a DPO

A DPO is responsible for data protection compliance. It therefore makes sense for organisations to ensure that their DPOs are suitably qualified for this role.

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The Directive did not specify any minimum qualifications for DPOs.

 Rec.97; Art.37(5)-(6)

A DPO should have expert knowledge of data protection law and practice, and should be capable of performing the functions of a DPO (outlined below). A DPO can be an employee or an outside consultant.

 The DPO Guidelines state that sensitivity, complexity and amount of data processed within an organisation will impact the expertise required for a DPO and a sufficient understanding of operations, as well as information systems, data security and data protection needs of the controller is recommended. For many organisations, it will be challenging to find an existing employee who satisfies the prerequisite requirements of being a DPO. This may mean that such organisations have to engage outside consultants, at potentially significant expense, to fulfil this role.

Role of a DPO

The role of the DPO is to ensure that the relevant organisation achieves data protection compliance.

N/A

The Directive did not set out a specific role for DPOs to fulfil.

 Art.38(1)-(2), (4)-(5)

The DPO must deal with all data protection matters affecting the controller or processor properly and in a timely manner. The controller or processor must provide the DPO with the necessary resources and support. Data subjects may contact the DPO (e.g., to exercise their rights under the GDPR). The DPO must be bound by a confidentiality obligation in relation to his or her work.

 The GDPR formalises requirements not expressly set out in the Directive. However, in most cases this will make little practical difference.

 The DPO Guidelines state that the DPO must be included in all aspects of data processing decisions undertaken within the organisation and that the DPO's opinion on such matters are given weight. If the organisation acts contrary to the DPO's opinion, it should record the reasons for that decision.

Special protection for DPOs

In principle, an organisation should not be able to take disciplinary action against a DPO merely because the DPO makes life harder for the organisation. If an organisation could do so, it would leave the DPO unable to act in a truly independent manner.

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The Directive did not offer DPOs any special protection. However, the laws of several Member States (e.g., Germany) provided that a DPO who is also an employee is protected from almost all disciplinary actions by the employer, making it very difficult to remove the DPO. Consequently, many organisations in these Member States elected to engage an outside consultant as a DPO.

 Art.38(3)

The organisation cannot instruct the DPO in the performance of his or her duties, and cannot terminate the DPO's employment (or take any other disciplinary action) as a result of the performance of the DPO's duties.

 Organisations should consider this issue very carefully, in conjunction with applicable employment laws in the relevant Member States. In practice, some organisations may conclude that it is better to appoint an outside consultant to the role of DPO, as opposed to an employee who will become very difficult to remove from that position. However, the DPO Guidelines state that even external DPOs cannot be "unfairly" removed.

Tasks of a DPO

The DPO's role involves the performance of certain tasks, such as advising the relevant organisation of its data protection compliance obligations.

N/A

The Directive did not specifically oblige DPOs to perform any particular tasks, although the national laws of some Member States allocated particular tasks to DPOs.

 Art.38(6), 39

A DPO must fulfil at least the following tasks:

• informing and advising the relevant controller or processor (and any employees who process personal data) about their obligations under the GDPR;
• monitor compliance with the GDPR by the controller or processor;
• advise on Impact Assessments and prior consultation with DPAs; and
• cooperate with DPAs and act as a point of contact for DPAs.

 The GDPR obliges organisations to appoint a DPO (where applicable) and requires that DPO to perform certain tasks.

 The fulfilment of those tasks by the DPO should, in theory, mean that the organisation is better able to achieve compliance with the GDPR.

Purpose of Codes of Conduct

Codes of Conduct provide a means for certain industry sectors, or groups of organisations, to create context-specific rules regarding the processing of personal data, in their respective industries, in compliance with EU data protection law.

Rec.26; Art.27

Associations and other industry bodies could prepare Codes of Conduct covering compliance with the Directive in general, as implemented in the laws of the relevant Member States, or specific aspects of those laws.

 Rec.77, 81, 98-99; Art.40(2)

Associations and other industry bodies may prepare Codes of Conduct covering compliance with the GDPR, in respect of general or specific aspects of the GDPR.

 The essential aim of the provisions relating to Codes of Conduct is the same in the Directive and the GDPR. In both cases the creation of Codes of Conduct, to be adhered to by organisations, is encouraged for the purpose of improving overall compliance with EU data protection law.

Encouragement of Codes of Conduct

Creating a Code of Conduct is a laborious undertaking, but one that can help improve compliance. EU data protection law therefore obliges authorities to encourage the creation of Codes of Conduct.

Rec.61; Art.27(1)

The Commission, and Member States, were obliged to encourage the drawing up of Codes of Conduct.

 Rec.98; Art.40(1), 57(1)(m), (p), (o)

Member States, DPAs and the EDPB are all obliged to encourage the drawing up of Codes of Conduct.

 The language in the GDPR makes only minor adjustments to the position as it was set out in the Directive, and these are unlikely to materially affect organisations.

Adherence to Codes of Conduct by non-EEA controllers and processors

One of the core dangers of transferring data out of the EEA is that those data will be subject to lower standards of protection. By adhering to Codes of Conduct, non-EEA controllers and processors can address this risk, and provide a legal basis for Cross-Border Data Transfers (see Chapter 13).

N/A

The Directive did not specifically provide for non-EEA controllers or processors to sign up to Codes of Conduct.

 Rec.81; Art.40(1)(j), (3), 46(2)(e)

Controllers and processors that are outside the EEA, and that are not subject to the GDPR, may adhere to Codes of Conduct in order to create a framework for providing adequate protection to personal data in third countries. The GDPR specifically allows adherence of non-EEA controllers and processors to an approved Code of Conduct to provide the basis for Cross-Border Data Transfers (see Chapter 13).

 The fact that non-EEA organisations can use adherence to approved Codes of Conduct as a basis for Cross-Border Data Transfers provides a new option for organisations seeking to transfer personal data internationally. It may also make compliance simpler for organisations that frequently exchange data with other organisations in the same industry.

Enforcement of Codes of Conduct

A Code of Conduct only serves a useful purpose to the extent that it is enforceable against entities that sign up to it. The question of who carries out such enforcement, and what powers they have for doing so, is therefore of critical importance to the operation of any Code of Conduct.

Art.27(2)-(3)

DPAs were responsible for reviewing and enforcing Codes of Conduct. Where Codes of Conduct applied in multiple Member States, the WP29 could also have responsibility for reviewing those Codes of Conduct, although enforcement would still have been carried out by DPAs.

 Art.40(4), 41

An independent body may be appointed by the relevant DPA to monitor and enforce a Code of Conduct if it is:

• independent and has demonstrated its expertise;
• has established procedures for reviewing and assessing compliance with a Code of Conduct;
• has established procedures for dealing with complaints or infringements of the Code of Conduct; and
• can demonstrate that it has no conflicts of interest in this role.

Such a body may be appointed to monitor and enforce compliance with a Code of Conduct. DPAs still retain their own separate enforcement powers.

 An industry body that is already familiar with the processing taking place within that industry may be better placed than a DPA to enforce a Code of Conduct for that industry. That said, such bodies cannot act to the exclusion of DPAs, and it is always open to a DPA to intervene in any such enforcement proceedings.

Advantages of adherence to approved Codes of Conduct

Codes of Conduct clearly need to provide practical advantages for organisations, in order for the effort necessary to create such Codes of Conduct to be worthwhile.

Rec.26, Art.27

Approved Codes of Conduct under the Directive could:

• provide guidance on specific data protection issues (e.g., anonymisation); and
• provide evidence of compliance with the requirements of the national laws that implement the Directive.

 Rec.77; Art.24(3), 28(5), 35(8), 46(2)(e), Art.83(2)(j)

Adherence to an approved Code of Conduct:

• may provide guidance on specific compliance issues;
• may provide evidence of compliance with the GDPR;
• is a positive factor in an Impact Assessment;
• may provide the basis for Cross-Border Data Transfers (see Chapter 13); and
• may affect any fines imposed upon the adherent controller or processor.

 The increased advantages of adherence to an approved Code of Conduct create significant new reasons for organisations to consider creating and implementing Codes of Conduct.

Approval of Codes of Conduct by DPAs

In order for a Code of Conduct to provide the advantages identified immediately above, that Code of Conduct must first be formally approved by DPAs.

Art.27(2)

DPAs had to ascertain, among other things, whether a Code of Conduct was in accordance with the relevant national law that implemented the Directive. The DPA had the power to seek the views of data subjects on the issue.

 Art.40(5), 57(1)(p), 58(3)(d)

Draft Codes of Conduct must be submitted to the competent DPA, which must then:

• approve the Code of Conduct if it provides sufficient protections in accordance with the GDPR, or amend it if it does not;
• register and publish approved Codes of Conduct; and
• publish the criteria for gaining such approval.

If a Code of Conduct affects processing in several Member States, DPAs must review the Code of Conduct in accordance with the Consistency Mechanism (see Chapter 15) and refer it to the EDPB.

 Because the approval criteria must be published, and DPAs must act uniformly under the Consistency Mechanism (see Chapter 15), the approvals process under the GDPR is likely to be more transparent and objective than the process under the Directive.

Approval of Codes of Conduct by the WP29/EDPB

Where organisations seek to implement a Code of Conduct affecting multiple Member States, approval of the Code of Conduct at an EU-level is generally required.

Art.27(3), 30(d)

A draft Code of Conduct could have been submitted to the WP29, which would then have issued an opinion on whether that Code of Conduct complied with the Directive (although, on a literal interpretation of Art.27(3), a Code of Conduct would have to have complied with the national laws of all 28 Member States that implemented the Directive). The WP29 could have sought the views of data subjects. The Commission could also have publicised any approved Codes of Conduct.

 Art.40(8), 64(1)(b)

The EDPB is required to issue an opinion on any draft Code of Conduct before it is approved. The EDPB must also register and publish approved Codes of Conduct.

 Although the GDPR changes the language, the approval format and process, and the body from which approval must be obtained, the overall outcome results in minimal changes for organisations seeking to implement a Code of Conduct affecting multiple Member States.

Purpose of seals and certifications

The primary purpose of seals and certifications is to provide organisations with a formally recognised confirmation of compliance with EU data protection law, typically with an associated visual symbol (e.g., a badge or emblem that can be displayed on published documents and websites, confirming that the organisation satisfies the requirements of the relevant seal or certification).

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The Directive did not specifically address certification. A number of national DPAs and industry bodies created their own certification schemes.

 Rec.77, 81; Art.42, 43

The GDPR provides for a voluntary system of accreditation, under which controllers or processors may adhere to the requirements of a seal or certification scheme, for the purpose of demonstrating compliance with the GDPR.

 Although seals and certifications gain formal recognition under the GDPR, their essential purpose is unchanged: organisations that want a visual badge or emblem that demonstrates their compliance with all, or any aspect, of EU data protection law can apply to the relevant scheme. If they are successful in their application, they earn the right to display the relevant badge or emblem.

Encouragement of seals and certification

Implementing a seal or certification scheme is a difficult and time-consuming exercise, but one that can help improve compliance. EU data protection law therefore obliges DPAs to encourage the creation of seal or certification schemes.

N/A

This issue was not specifically addressed in the Directive.

 Rec.100; Art.42(1), (8)

Member States, DPAs, the EDPB and the Commission are all obliged to encourage the establishment of certification mechanisms, particularly targeting small and medium enterprises. The EDPB is responsible for maintaining and publishing a register of seal and certification schemes.

 By drawing additional attention to the various seal and certification schemes, Member States, DPAs, the EDPB and the Commission may increase the value of such schemes in the eyes of the public, and also in the eyes of organisations.

Adherence to seal or certification schemes

In order to adhere to a seal or certification scheme, an organisation must provide the DPA or independent body that oversees the relevant scheme with all information and access to its processing activities which are necessary to conduct the seal or certification review procedure.

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This issue was not specifically addressed in the Directive.

 Art.42(4), (6)

An organisation may apply for a certification or seal by providing all necessary information and submitting its relevant processing activities to the DPA or independent body that oversees the relevant scheme. Adherence to a certification or seal does not reduce the obligation of a controller or processor to comply with the GDPR.

 Organisations that wish to obtain a seal or certification are able to select the type of seal or certification for which they wish to apply, and must then agree to provide the relevant DPA or independent body with the necessary information and access to their processing activities.

Enforcement of seal or certification schemes

A seal or certification scheme only has value if it demonstrates compliance with EU data protection law. Therefore, it must be overseen and enforced, in order to ensure that it achieves that aim.

N/A

This issue was not specifically addressed in the Directive.

 Art.42(5), 43(2)

Seal and certification schemes are overseen and enforced, either by the relevant DPA, or an independent body which has an appropriate level of expertise in relation to data protection and has been accredited by the relevant DPA. An independent body may be appointed to this role for a maximum of five years if it is:

• independent and has demonstrated its expertise;
• has established procedures for issuing, reviewing and withdrawing seals or certifications;
• has established procedures for dealing with complaints or infringements of the seals or certifications; and
• can demonstrate that it has no conflicts of interest in this role.

Such a body may be appointed to monitor compliance with a seal or certification scheme and withdraw the seal or certification if its requirements are no longer met. DPAs still retain their own separate enforcement powers.

 Organisations that wish to obtain a seal or certification are subject to enforcement by the DPA or independent body that oversees the relevant seal or certification scheme.

Expiry of seals or certifications

Seals or certifications have a maximum shelf life, in order to ensure that organisations keep their compliance responsibilities under review.

N/A

This issue was not specifically addressed in the Directive.

 Art.42(7)

Seals and certifications last for a maximum of three years, and may be renewed provided that the relevant conditions are still met. If the conditions are not met, the seal or certification may be withdrawn.

 Seals and certifications last for a relatively brief period of three years, after which a renewal is necessary. Consequently, seal and certification schemes result in an ongoing, burdensome and potentially expensive process.