Inter­na­tio­nal data trans­fers: data pro­tec­tion aut­ho­ri­ties laun­ching inves­ti­ga­ti­ons and sen­ding out questionnaires

Thre­at of pro­hi­bi­ti­on orders and fines

Data pro­tec­tion aut­ho­ri­ties in seve­ral Ger­man Fede­ral Sta­tes have recent­ly announ­ced (only in Ger­man) that they will be inves­ti­ga­ting data trans­fers by com­pa­nies based in count­ries out­side the EU or the Euro­pean Eco­no­mic Area (third count­ries) as part of a coör­di­na­ted enforce­ment cam­paign. The aut­ho­ri­ties taking part in the­se inves­ti­ga­ti­ons, which will be con­duc­ted by means of ques­ti­on­n­aires, will include the data pro­tec­tion aut­ho­ri­ties in Bava­ria (PDF only in Ger­man), Baden-WuerttembergBer­linHam­burgLower Sax­o­nyRhineland-PalatinateBran­den­burg (only in Ger­man) and Saar­land. The inves­ti­ga­ti­ons will ser­ve to enforce com­pli­ance with the requi­re­ments estab­lished by the ECJ in its “Schrems II” decis­i­on  of 16 July 2020 (Case No. C‑311/18) for inter­na­tio­nal data transfers.

Back­ground: core state­ments of the “Schrems II” decision

In its “Schrems II” decis­i­on last sum­mer, the ECJ rai­sed the stan­dards for data trans­fers to third count­ries (par­ti­cu­lar­ly the US) con­sider­a­b­ly, ruling that the EU-US Pri­va­cy Shield is inva­lid as an ade­quacy decis­i­on for the exch­an­ge of data bet­ween the EU and the US and at the same time set­ting strict requi­re­ments for the use of stan­dard con­trac­tu­al clau­ses as the basis for data trans­fers to third count­ries. Under the ECJ’s ruling, con­trol­lers using stan­dard con­trac­tu­al clau­ses are requi­red to check in advan­ce in order to deter­mi­ne whe­ther tho­se clau­ses ensu­re an ade­qua­te level of data pro­tec­tion. The appli­ca­ble stan­dard for this assess­ment is Euro­pean law, and par­ti­cu­lar­ly the EU Char­ter of Fun­da­men­tal Rights. Con­trol­lers which are unable to ensu­re an ade­qua­te level of data pro­tec­tion are requi­red to crea­te addi­tio­nal safe­guards, which may be dif­fi­cult to accom­plish par­ti­cu­lar­ly for data trans­fers to the US, given the powers of the US secu­ri­ty aut­ho­ri­ties to access data.

Approach of the data pro­tec­tion authorities

The data pro­tec­tion aut­ho­ri­ties of the various Fede­ral Sta­tes will be approa­ching com­pa­nies based on joint ques­ti­on­n­aires (only in Ger­man) in order to deter­mi­ne whe­ther con­trol­lers are imple­men­ting the “Schrems II” decis­i­on. The ques­ti­on­n­aires which have been published to date focus on the fol­lo­wing areas:

But the indi­vi­du­al aut­ho­ri­ties also have the opti­on of taking an indi­vi­dua­li­zed approach. For exam­p­le, they can deci­de which are­as to focus their inves­ti­ga­ti­on on and how many of which ques­ti­on­n­aires they will send out to con­trol­lers. Nota­b­ly, howe­ver, the data pro­tec­tion aut­ho­ri­ties appar­ent­ly do not curr­ent­ly intend to con­duct an inves­ti­ga­ti­on spe­ci­fi­cal­ly devo­ted to third-country trans­fers in con­nec­tion with video con­fe­ren­cing ser­vices and other col­la­bo­ra­ti­on solu­ti­ons (only in Ger­man), pre­su­ma­b­ly in light of the coro­na­vi­rus pan­de­mic.

Moreo­ver, our ana­ly­sis of the ques­ti­on­n­aires indi­ca­tes that their sub­ject mat­ter will be limi­t­ed to deter­mi­ning whe­ther con­trol­lers are fol­lo­wing the recom­men­da­ti­ons of the data pro­tec­tion aut­ho­ri­ties with regard to imple­men­ta­ti­on of the “Schrems II” decis­i­on, like the ques­ti­on­n­aires recent­ly sent out by the Ham­burg data pro­tec­tion aut­ho­ri­ty con­cer­ning Office 365. Howe­ver, con­trol­lers should not take this as a reason to unde­re­sti­ma­te the questionnaires.

What con­se­quen­ces do com­pa­nies need to fear and what can they do now?

Pos­si­ble con­se­quen­ces of the inves­ti­ga­ti­ons which have recent­ly been initia­ted, as the data pro­tec­tion aut­ho­ri­ty of Rhineland-Palatinate has announ­ced, include pro­hi­bi­ti­on orders as well as other pos­si­ble pen­al­ties, such as e.g. fines . The ECJ’s “Schrems II” decis­i­on has estab­lished new prin­ci­ples for third-country trans­fers which affect near­ly every com­pa­ny, as almost every com­pa­ny enga­ges in the trans­fer of per­so­nal data to third count­ries, whe­ther kno­wing­ly or unknowingly.

Tho­se who recei­ve a ques­ti­on­n­aire are the­r­e­fo­re advi­sed as follows:

  • If the let­ter does not con­tain ins­truc­tions as to legal reme­dies (which is to be expec­ted based on what we now know), it is mere­ly a request for infor­ma­ti­on. In this case, the ques­ti­on­n­aire does not have the cha­rac­ter of an admi­nis­tra­ti­ve act and reci­pi­ents can­not be requi­red to respond under thre­at of pen­al­ties from the authorities.
  • The ques­ti­on­n­aires ser­ve to pro­vi­de an initi­al over­view. Howe­ver, it is high­ly likely that they will be fol­lo­wed by addi­tio­nal mea­su­res, par­ti­cu­lar­ly pro­hi­bi­ti­on orders. Accor­din­gly, com­pa­nies should take care at all times in respon­ding to the questionnaires.
  • Get help from an att­or­ney if you have had litt­le or no cont­act in the past with the com­pe­tent aut­ho­ri­ty or if you feel unsu­re about how to deal with the aut­ho­ri­ty. We have exten­si­ve expe­ri­ence deal­ing with Ger­man and Euro­pean super­vi­so­ry aut­ho­ri­ties and are eager to pro­vi­de any assis­tance you may need.
  • Given the thre­at of pro­hi­bi­ti­on orders and addi­tio­nal pen­al­ties, such as fines, even com­pa­nies which have not yet recei­ved ques­ti­on­n­aires would be well-advised to imme­dia­te­ly exami­ne their third-country trans­fers, if they have not alre­a­dy done so, as well as docu­men­ting the­se exami­na­ti­ons. If the aut­ho­ri­ties nevert­hel­ess find in the end that a vio­la­ti­on has taken place, this docu­men­ted exami­na­ti­on may have the effect of miti­ga­ting the penal­ty, as the aut­ho­ri­ties have express­ly stated.

If you have recei­ved a ques­ti­on­n­aire or requi­re legal assis­tance in con­nec­tion with data trans­fers to third count­ries, plea­se cont­act the Co-Head of our Digi­tal Busi­ness Unit, Att­or­ney Ste­fan Hessel.

More infor­ma­ti­on about the ECJ’s “Schrems II” decis­i­on and pos­si­ble actions by the data pro­tec­tion aut­ho­ri­ties can also be found in our artic­le titled “Data trans­fer to third count­ries? Imme­dia­te action urgen­tly advi­sed.

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