By Jan Dhont
Paving the way for new standards in data security, on October 26, 2009, the Council of the European Union approved the directive amending Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector (the Directive). Following a trend, these amendments introduce notification requirements on public providers of electronic communication services in the event of data breaches. Such notification requirements exist in the U.S. and have been recently implemented in Germany, with many other European nations soon to follow.
Under the amended Directive, providers of publicly available e-communications must notify the relevant national authorities without delay when a personal data breach has occurred. A data breach is vaguely defined as “a breach of security leading to the accidental or unlawful destruction, loss, alteration, unauthorised disclosure of, or access to” personal data.
Providers must also notify individuals or subscribers of electronic communication services if the breach is likely to adversely affect their personal data or privacy. Notification to a customer or subscriber will not be required if the provider can demonstrate that it has implemented certain protection measures to the satisfaction of the competent national authorities.
Further, the national authorities are granted the right to require notification regardless of the harm to the individual. Notifications should contain the nature of the breach, contact information and possible steps to mitigate damages and, if to the national authorities, the consequences and measures taken by the provider to address the breach. Additionally, national authorities are authorized to adopt guidelines on the notification process and are empowered to audit the service providers’ compliance. The providers are required to keep a log of breaches and any mitigating steps taken.
Following notification trends in the U.S., healthcare, insurance, and financial services industries will likely be the next industries affected by notification requirements. The European Data Protection Supervisor stated that “citizens will expect such a system to apply not only to their Internet access providers, but also to their online banks and online pharmacies” (EDPS press release January 12, 2009). The amendment recitals state that all EU member states should implement mandatory notifications for security breaches in all industries “as a matter of priority” and that a subsequent review on the member’s legislation in this respect, the Commission should take steps to encourage notification laws throughout the EU, “regardless of the sector, or the type of data concerned.” Thus, it is anticipated that notifications will branch out into other industries throughout Member States.
Overall, companies should consider their data security policies and procedures and assess their implementation of IT risk management in light of the new notification requirements. This is especially attenuated with regard to assessment of risks and harm to individuals and communication channels with the relevant national authorities.
Jan Dhont heads the privacy practice of Lorenz Brussels. He specializes in data protection and privacy, telecommunications, media, and technology law. He can be reached at email@example.com.