Legal chal­lenges in con­nec­tion with vir­tu­al site visits

Vir­tu­al site visits save time and money for natio­nal and par­ti­cu­lar­ly inter­na­tio­nal com­pa­nies and inves­tors. Due in no small part to the coro­na­vi­rus pan­de­mic, tra­vel and bor­der crossings have beco­me a bur­den in cor­po­ra­te labor prac­ti­ce, even within the Euro­pean Uni­on. As a result, vir­tu­al site visits are a wel­co­me alter­na­ti­ve to in-person mee­tings for many com­pa­nies. But in an age of pro­gres­si­ve digi­tiza­ti­on, this deve­lo­p­ment also invol­ves a wide ran­ge of chal­lenges, par­ti­cu­lar­ly from the view­point of data pro­tec­tion law.

Chal­lenges in data pro­tec­tion law in con­nec­tion with vir­tu­al site visits

Vir­tu­al tours of pro­duc­tion sites also typi­cal­ly invol­ve the pro­ces­sing of per­so­nal data (only in Ger­man), so that the Gene­ral Data Pro­tec­tion Regu­la­ti­on (GDPR) appli­es. Employee data may be pro­ces­sed during vir­tu­al tours e.g. if employees are film­ed in the back­ground per­forming their work. Even if the pro­ces­sing of employee data is not the focus of the vir­tu­al site visit, a legal basis is requi­red from the view­point of data pro­tec­tion law. One chall­enge in this regard that, under Germany’s Fede­ral Data Pro­tec­tion Act, employee data may only be pro­ces­sed if such pro­ces­sing is neces­sa­ry for con­duct of the employ­ment rela­ti­onship (§ 26(1) of the Fede­ral Data Pro­tec­tion Act) (only in Ger­man). That is typi­cal­ly not the case when pro­ces­sing the per­so­nal data of employees who are not par­ti­ci­pa­ting in the vir­tu­al site visit. The only opti­on which remains, in most cases, is for the employ­er to obtain the con­sent of the affec­ted employees. The lawful­ness of this con­sent depends hea­vi­ly on the cir­cum­s­tances of the indi­vi­du­al case, so that a detail­ed legal ana­ly­sis must be per­for­med in advan­ce in each case. On the other hand, the pro­ces­sing of data for employees who actively par­ti­ci­pa­te in the vir­tu­al site visit should be easier to jus­ti­fy in this analysis.

Sin­ce vir­tu­al site visits are fre­quent­ly inter­na­tio­nal in cha­rac­ter, the ques­ti­ons as to the lawful­ness of third-country data trans­fers may also be rai­sed, in the con­text of the ECJ’s “Schrems II” decis­i­on. Trans­fers to the US in par­ti­cu­lar may crea­te chal­lenges, so that imme­dia­te action is urgen­tly advi­sed. The issue of third-country data trans­fers may be rai­sed even if the soft­ware used for the vir­tu­al tour is from an Ame­ri­can video con­fe­ren­cing pro­vi­der. It should also be kept in mind in this regard that the recent ques­ti­on­n­aires sent out by Ger­man data pro­tec­tion aut­ho­ri­ties spe­ci­fi­cal­ly address the exch­an­ge of employee data within cor­po­ra­te groups as well.

Chal­lenges posed by the Trade Secrets Act

As attrac­ti­ve as vir­tu­al site visits may be for tho­se invol­ved, com­pa­nies should take spe­cial pre­cau­ti­ons in advan­ce to ensu­re the pro­tec­tion of com­pa­ny infor­ma­ti­on in accordance with the Trade Secrets Act (only in Ger­man). Trade secrets may be vio­la­ted e.g. if white­boards are visi­ble in the back­ground which con­tain inter­nal infor­ma­ti­on or infor­ma­ti­on about the pro­ducts of other busi­ness part­ners. The­r­e­fo­re, vir­tu­al tours requi­re careful pre­pa­ra­ti­on and exten­si­ve ana­ly­sis of actu­al con­di­ti­ons at the loca­ti­ons whe­re the film­ing will be taking place, as well as chan­ges to the mea­su­res taken by the com­pa­ny for the pro­tec­tion of con­fi­den­ti­al infor­ma­ti­on, if necessary.

Out­look and future developments

Par­ti­cu­lar­ly during the coro­na­vi­rus pan­de­mic, vir­tu­al site visits offer com­pa­nies a good way to view sites quick­ly and wit­hout com­pli­ca­ti­ons. Whe­ther this trend will con­ti­nue in the coming years remains to be seen given that the asso­cia­ted legal requi­re­ments should not be unde­re­sti­ma­ted, simi­lar to the case for the trend of employees working from home. In any case, com­pa­nies which offer vir­tu­al site visits should per­form a detail­ed ana­ly­sis of the poten­ti­al legal risks and actu­al con­di­ti­ons in order to ensu­re that they stay on the safe side with regard to data pro­tec­tion and the pro­tec­tion of trade secrets.


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