The Court of Justice of the European Union (‘the Court’ or ‘CJEU’) gave a second judgment this week on the compatibility of data retention measures with the fundamental rights of persons as guaranteed by the Charter of Fundamental Rights of the EU (in Joined Cases C-203/15 and C-698/15 Tele2Sverige). The Court confirmed all its findings from the earlier Digital Rights Ireland judgment and took the opportunity to clarify and nuance some of its initial key-findings (for an analysis of the DRI judgment, see my article published in 2015).
The two cases that were joined by the Court emerged in the fallout of the invalidation of the Data Retention Directive by the CJEU in the DRI judgment. Even if that Directive was declared invalid for breaching fundamental rights, most of the national laws that transposed it in the Member States were kept in force invoking Article 15(1) of the ePrivacy Directive. This Article provided for an exception to the rule of ensuring confidentiality of communications, which allowed Member States to “inter alia, adopt legislative measures providing for the retention of data for a limited period justified on the grounds laid down in this paragraph”. What the Member States seem to have disregarded with their decision to keep national data retention laws in force was that the same paragraph, last sentence, provided that “all the measures referred to in this paragraph (including data retention – my note) shall be in accordance with the general principles of Community law” (see §91 and §92 of the judgment). Respect for fundamental rights is one of those principles.
The Tele2Sverige case was initiated by a telecommunications service provider that followed the decision of the Court in DRI and stopped to retain data, because it considered that the national law requiring it do retain data was in breach of EU law. The Swedish authorities did not agree with this interpretation and this is how the Court was given the opportunity to clarify the relationship between national data retention law and EU law after the invalidation of the Data Retention Directive. The Watson case originates in the UK, was initiated by individuals and refers to the Data Retention and Investigatory Powers Act 2014(DRIPA).
In summary, the Court found that “national legislation which, for the purpose of fighting crime, provides for general and indiscriminate retention of all traffic and location data of all subscribers and registered users relating to all means of electronic communication” is in breach of Article 7 (right to private life), Article 8 (right to the protection of personal data) and Article 11 (right to freedom of speech) from the Charter of Fundamental Rights of the EU. The Court clarified that such legislation is precluded by Article 15(1) of the ePrivacy Directive. (See §1 from the executive part of the judgment)
Moreover, the Court found that national legislation in the field of the ePrivacy Directive that regulates the access of competent national authorities to retained data is incompatible with the three fundamental rights mentioned above, as long as:
- the objective pursued by that access, in the context of fighting crime, is not restricted solely to fighting serious crime;
- access is not subject to prior review by a court or an independent administrative authority;
- there is no requirement that the data concerned should be retained within the European Union (§2 of the operative part of the judgment).
There are a couple of remarkable findings of the Court in the Tele2Sverige/Watson judgment, analysed below. Brace yourselves for a long post. But it’s worth it. I’ll be looking at (1) how indiscriminate retention of metadata interferes with freedom of speech, (2) why data retention is merely an exception of the principle of confidentiality of communications and must not become the rule, (3) why the Court considers retaining on a generalised basis metadata is a far-reaching intrusion in the right to private life, (4) what is “targeted retention” and under what conditions the Court sees it acceptable and, finally (5) what is the impact of all of this on the Privacy Shield and PNR schemes.
(1) Indiscriminate retention of metadata interferes with freedom of speech
Even though none of the preliminary ruling questions asked the Court to look at compliance of national data retention measures also in the light of Article 11 Charter (freedom of speech), the Court did so by its own motion.
This was needed so that the Court finishes what it began in DRI. In that previous case, the Court referred to Article 11 Charter in §28, replying to a specific preliminary ruling question, by mentioning that:
“it is not inconceivable that the retention of the data in question might have an effect on the use, by subscribers or registered users, of the means of communication covered by that directive and, consequently, on their exercise of the freedom of expression guaranteed by Article 11 of the Charter”.
However, it never analysed if that was the case. In §70, the Court just stated that, after finding the Directive to be invalid because it was not compliant with Articles 7 and 8 of the Charter, “there is no need to examine the validity of Directive 2006/24 in the light of Article 11 of the Charter”.
This time, the Court developed its argument. It started by underlying that data retention legislation such as that at issue in the main proceedings “raises questions relating to compatibility not only with Articles 7 and 8 of the Charter, which are expressly referred to in the questions referred for a preliminary ruling, but also with the freedom of expression guaranteed in Article 11 of the Charter” (§92).
The Court continued by emphasising that the importance of freedom of expression must be taken into consideration when interpreting Article 15(1) of the ePrivacy Directive “in the light of the particular importance accorded to that freedom in any democratic society” (§93). “That fundamental right (freedom of expression), guaranteed in Article 11 of the Charter, constitutes one of the essential foundations of a pluralist, democratic society, and is one of the values on which, under Article 2 TEU, the Union is founded” (§93), it continues.
The Court justifies the link between data retention and freedom of expression by slightly more confidently (compared to DRI) stating that:
“the retention of traffic and location data could nonetheless have an effect on the use of means of electronic communication and, consequently, on the exercise by the users thereof of their freedom of expression, guaranteed in Article 11 of the Charter” (§101)
The operative part of the judgment clearly states that Articles 7, 8 and 11 of the Charter preclude data retention legislation such as that in the main proceedings.
(2) The exception to the “principle of confidentiality” must not become the rule
The Court refers several times to a “principle of confidentiality of communications” (§85, §90, §95, §115). It explains in §85 that this principle is established by the ePrivacy Directive and “implies, inter alia, (…) that, as a general rule, any person other than the users is prohibited from storing, without the consent of the users concerned, the traffic data related to electronic communications. The only exceptions relate to persons lawfully authorised in accordance with Article 15(1) of that directive and to the technical storage necessary for conveyance of a communication.”
With regard to the first exception, the Court recalls that, because Article 15(1) is construed so as “to restrict the scope of the obligation of principle to ensure confidentiality of communications and related traffic data”, it “must, in accordance with the Court’s settled case-law, be interpreted strictly” (§89). The Court adds, using strong language:
“That provision cannot, therefore, permit the exception to that obligation of principle and, in particular, to the prohibition on storage of data, laid down in Article 5 of Directive 2002/58, to become the rule, if the latter provision is not to be rendered largely meaningless” (§89).
In any case, the Court adds, all exceptions adopted pursuant to Article 15(1) of the ePrivacy Directive must be in accordance with the general principles of EU law, which include the fundamental rights guaranteed by the Charter (§91) and must strictly have one of the objectives enumerated in Article 15(1) of the ePrivacy Directive (§90).
As for the second derogation to the principle, the Court looks at recitals 22 and 26 of the ePrivacy Directive and affirms that the retention of traffic data is permitted “only to the extent necessary and for the time necessary for the billing and marketing of services and the provision of value added services. (…) As regards, in particular, the billing of services, that processing is permitted only up to the end of the period during which the bill may be lawfully challenged or legal proceedings brought to obtain payment. Once that period has elapsed, the data processed and stored must be erased or made anonymous” (§85).
(3) A”very far-reaching” and “particularly serious” interference
The Court observed that the national data retention laws at issue in the main proceedings “provides for a general and indiscriminate retention of all traffic and location data of all subscribers and registered users relating to all means of electronic communication, and that it imposes on providers of electronic communications services an obligation to retain that data systematically and continuously, with no exceptions” (§97).
The data retained is metadata and is described in detail in §98. The Court confirmed its assessment in DRI that metadata “taken as a whole, is liable to allow very precise conclusions to be drawn concerning the private lives of the persons whose data has been retained, such as everyday habits, permanent or temporary places of residence, daily or other movements, the activities carried out, the social relationships of those persons and the social environments frequented by them” (§99). It also added that this data “provides the means (…) of establishing a profile of the individuals concerned, information that is no less sensitive, having regard to the right to privacy, than the actual content of communications” (§99).
The Court went further to emphasise that this kind of undiscriminating gathering of data represents a “very far-reaching” and “particularly serious” interference in the fundamental rights to private life and protection of personal data (§100). Moreover, “he fact that the data is retained without the subscriber or registered user being informed is likely to cause the persons concerned to feel that their private lives are the subject of constant surveillance” (§100).
The Court indicates that such a far-reaching interference can only be justified by the objective of fighting serious crime (§102). And even in this case, the objective of fighting serious crime does not justify in itself “general and indiscriminate retention of all traffic and location data” (§103). The measures must, in addition, be strictly necessary to achieve this objective (§106).
The Court found that the national legislation such as that at issue in the main proceedings does not comply with this request, because (§105):
- it “covers, in a generalised manner, all subscribers and registered users and all means of electronic communication as well as all traffic data, provides for no differentiation, limitation or exception according to the objective pursued”.
- “It is comprehensive in that it affects all persons using electronic communication services, even though those persons are not, even indirectly, in a situation that is liable to give rise to criminal proceedings”.
- It “applies even to persons for whom there is no evidence capable of suggesting that their conduct might have a link, even an indirect or remote one, with serious criminal offences”.
- “it does not provide for any exception, and consequently it applies even to persons whose communications are subject, according to rules of national law, to the obligation of professional secrecy”.
(4) Targeted data retention is permissible. Here is a list with all conditions:
The Court spells out that fundamental rights do not prevent a Member State from adopting “legislation permitting, as a preventive measure, the targeted retention of traffic and location data, for the purpose of fighting serious crime, provided that the retention of data is limited, with respect to:
- the categories of data to be retained,
- the means of communication affected,
- the persons concerned and
- the retention period adopted, to what is strictly necessary” (§108).
In addition, such legislation must:
- “lay down clear and precise rules governing the scope and application of such a data retention measure and imposing minimum safeguards, so that the persons whose data has been retained have sufficient guarantees of the effective protection of their personal data against the risk of misuse.
- indicate in what circumstances and under which conditions a data retention measure may, as a preventive measure, be adopted, thereby ensuring that such a measure is limited to what is strictly necessary” §109().
Other conditions that need to be fulfilled for a data retention legislation to be considered compatible with fundamental rights are indicated directly or indirectly by the Court in further paragraphs.
Such legislation must:
- be restricted to “retention in relation to data pertaining to a particular time period and/or geographical area and/or a group of persons likely to be involved, in one way or another, in a serious crime, or
- persons who could, for other reasons, contribute, through their data being retained, to fighting crime” (§106).
- “meet objective criteria, that establish a connection between the data to be retained and the objective pursued. In particular, such conditions must be shown to be such as actually to circumscribe, in practice, the extent of that measure and, thus, the public affected” (§110).
- “be based on objective evidence which makes it possible to identify a public whose data is likely to reveal a link, at least an indirect one, with serious criminal offences, and to contribute in one way or another to fighting serious crime or to preventing a serious risk to public security” (§111).
- “lay down clear and precise rules indicating in what circumstances and under which conditions the providers of electronic communications services must grant the competent national authorities access to the data. (…) a measure of that kind must be legally binding under domestic law” (§117).
- “lay down the substantive and procedural conditions governing the access of the competent national authorities to the retained data” (§118).
- provide that data must be “retained within the European Union” (§122).
- provide for “the irreversible destruction of the data at the end of the data retention period” (§122).
- must “ensure review, by an independent authority, of compliance with the level of protection guaranteed by EU law with respect to the protection of individuals in relation to the processing of personal data, that control being expressly required by Article 8(3) of the Charter” (§123).
Other specific conditions emerge with regard to access of competent authorities to the retained data. Access:
- “can be granted, in relation to the objective of fighting crime, only to the data of individuals suspected of planning, committing or having committed a serious crime or of being implicated in one way or another in such a crime” (§119). [The Court refers here to the ECtHR cases of Zacharov and Szabo, after a long series of privacy related cases where it did not refer at all to the ECtHR case-law].
- must be subject to “a prior review carried out either by a court or by an independent administrative body” (…) “the decision of that court or body should be made following a reasoned request by those authorities submitted, inter alia, within the framework of procedures for the prevention, detection or prosecution of crime” (§120). The only exception for the prior review are “cases of validly established urgency” (§120).
- must be notified by authorities to the persons affected “under the applicable national procedures, as soon as that notification is no longer liable to jeopardise the investigations being undertaken by those authorities. That notification is, in fact, necessary to enable the persons affected to exercise, inter alia, their right to a legal remedy” (§121).
- must be restricted solely to fighting serious crime (§125).
(5) Possible effects on the Privacy Shield and on PNR schemes
This judgment could have indirect effects on the “Privacy Shield” and slightly more immediate effects on Passenger Name Records schemes.
The indirect effect on the Privacy Shield and on all other adequacy schemes could only manifest in the context of a challenge of such transfer instruments before the CJEU. The seriousness with which the Court of Justice detailed all conditions that must be met by a legislative measure providing for a particular processing of personal data to be compliant with the fundamental rights to private life and to the protection of personal data strengthen the condition of “essentially equivalence”.
In other words, it will be difficult to convince the Court that a third country that allows collection of metadata (and all the more so content of communications) on a large scale and access to that data which is not made under the supervision of an independent authority, provides an adequate level of protection that would lawfully allow transfers of data from the EU to that third country. (For comparison, the CJEU referred to the Digital Rights Ireland case for 8 times and in key findings in its judgment in Schrems).
As for PNR schemes, the effects may come sooner and more directly, as we are waiting for the Court’s Opinion in Avis 1/15 on the compliance of the EU-PNR Canada agreement with fundamental rights. It is to be expected that the Court will copiously refer back to its new list of conditions for access by authorities to retained personal data when looking at how all PNR data is directly transferred by companies to law enforcement authorities in a third country, with no limitations.
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A million dollar question, literally: Can DPAs fine a controller directly on the basis of the GDPR, or do they need to wait for national laws?
by Gabriela Zanfir-Fortuna
The need to discuss the legal effect of the GDPR emerged as there are some opinions in the privacy bubble informing that it will take at least a couple of years before the GDPR will de facto have legal effect at national level, after the moment it becomes applicable in 2018. The main argument for this thesis is that national parliaments of the Member States will need to take action in a way or another, or that national governments will need to issue executive orders to grant new powers to supervisory authorities, including the power to fine.
This post will bring forward some facts emerging from EU primary law and from the case-law of the Court of Justice of the EU (CJEU) that need to be taken into account before talking about such a de facto grace period.
The conclusion is that, just like all EU regulations, the GDPR is directly applicable and has immediate effect from the date it becomes applicable according to its publication in the EU Official Journal (in this case, 25 May 2018), with no other national measures being required to give it effect in the Member States (not even translations at national level). While it is true that it contains provisions that give a margin of appreciation to Member States if they wish to intervene, most of the articles are sufficiently clear, detailed and straightforward to allow direct application, if need be ( for instance, if a Member State is late in adjusting and adapting its national data protection law).
1) EU regulations enjoy “direct applicability”: the rule is that they are “immediately applicable” and they don’t need national transposition
First and foremost, it is a fact emerging from the EU treaties that EU Regulations enjoy direct applicability, which means that once they become applicable they do not need to be transposed into national law.
This rule is set out in the second paragraph of Article 288 of the Treaty on the European Union, which states that:
On the contrary, according to the third paragraph of Article 288 TFEU, directives “shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods.”
Therefore, as the CJEU explained in settled case-law, “by virtue of the very nature of regulations and of their function in the system of sources of Community law, the provisions of those regulations generally have immediate effect in the national legal systems without it being necessary for the national authorities to adopt measures of application” (see Case C-278/02 Handlbauer, 2004, §25 and Case 93/71 Leonesio, 1972, §5) and in addition they also “operate to confer rights on individuals which the national courts have a duty to protect” (Case C-70/15 Lebek, 2016, §51).
However, the CJEU also ruled that “some of their provisions may nonetheless necessitate, for their implementation, the adoption of measures of application by the Member States” (Case C-278/02 Handlbauer, 2004, §26; C-403/98 Monte Arcosu, 2001, §26). But this is not the case of sufficiently clear and precise provisions, where Member States don’t enjoy any margin of manoeuvre. For instance, the Court found in Handlbauer that “this is not the case as regards Article 3(1) of Regulation No 2988/95 which, by fixing the limitation period for proceedings at four years as from the time when the irregularity is committed, leaves the Member States no discretion nor does it require them to adopt implementation measures” (§27).
Therefore, whenever an EU regulation leaves the Member States no discretion, nor does it require them to adopt implementation measures, the provisions of that regulation are directly and immediately applicable as they are.
2) EU regulations’ direct applicability is not depending on any national measure (not even translation published in national official journals)
The CJEU explained as far back as 1973 that for EU regulations to take effect in national legal systems of Member States there is not even the need to have their texts translated and published in the national official journals.
Asked whether the provisions of a Regulation can be “introduced into the legal order of Member States by internal measures reproducing the contents of Community provisions in such a way that the subject-matter is brought under national law”, the Court replied that “the direct application of a Regulation means that its entry into force and its application in favour of or against those subject to it are independent of any measure of reception into national law” (Case 34/73 Variola, 1973, §9 and §10). AG Kokott explained that such measures include “any publicity by the Member States” (Opinion in C-161/06 Skoma-lux, §54) in an Opinion that was substantially upheld by the Court in a judgment stating that the publication of a regulation in the Official Journal of the EU in an official language of a Member State is the only condition to give it effect and direct applicability in that Member State (Judgment in Case C-161/06).
The Court concluded in Variola that “a legislative measure under national law which reproduces the text of a directly applicable rule of Community law cannot in any way affect such direct applicability, or the Court’s jurisdiction under the Treaty” (operative part of the judgment). The Court also explained in Variola that “by virtue of the obligations arising from the Treaty and assumed on ratification, Member States are under a duty not to obstruct the direct applicability inherent in Regulations and other rules of Community law. Strict compliance with this obligation is an indispensable condition of simultaneous and uniform application of Community Regulations throughout the Community” (Case 34/73 Variola, 1973, §10).
3) National authorities could impose administrative penalties directly on the basis of a provision of a Regulation, where necessary
The Court dealt with the question of national authorities imposing administrative fines directly on the basis of the provisions of an EU regulation in Case C-367/09 Belgish Interventie en Restitutie Bureau on the interpretation of provisions from Regulation 2988/95.
After recalling its case-law on direct applicability of EU regulations (§32), including the exemption that some provisions of a Regulation necessitate for their implementation the adoption of measures of application (§33), the CJEU found that in that specific case national authorities cannot impose fines directly on the basis of Articles 5 and 7 of Regulation 2988/95 because “those provisions merely lay down general rules for supervision and penalties for the purpose of safeguarding the EU’s financial interests (…). In particular, those provisions do not specify which of the penalties listed in Article 5 of Regulation No 2988/95 should be applied in the case of an irregularity detrimental to the EU’s financial interests nor the category of operators on whom such penalties are to be imposed in such cases” (§36).
Therefore, the Court did not question the possibility of a national authority to impose fines directly on the legal basis provided by a regulation. The CJEU went directly to analyse the content of the relevant provision and found that fines could not be imposed because of the general character of that provision, which required additional measures to be adopted both at Member State and at EU level (were the provisions more clear, the authorities could have directly issued fines on the basis of the regulation).
One look at Article 83 GDPR and one can easily tell that this is not the case of that provision – it is clear who imposes fines, for what, against whom, on what criteria and what is the maximum amount for each category of fines. Neither is it the case of Article 58 on the powers of supervisory authorities. Article 83 GDPR allows Member States some discretion only if they wish to provide specific rules for fining public authorities (paragraph 7) and only if their legal system does not provide for administrative fines – in this case, the states are allowed to apply Article 83 in such a manner that the fine is initiated by the competent supervisory authority and imposed by competent national courts (paragraph 9).
4) Conclusion: beware of the GDPR from day 1
The GDPR, like all EU regulations, is directly applicable and has immediate effect in the legal order of Member States by virtue of its publication in the Official Journal of the EU and the conditions of applicability in time expressed therein, no additional national measures being required to give it effect.
While there are provisions that give Member States a margin of appreciation and a discretion to implement national measures, most of the provisions are sufficiently clear and precise to be applied as they are.
Of course there will be national data protection laws that will specify additional rules to the GDPR, giving effect to that margin of appreciation. But the national laws that will complement an EU regulation, such as the GDPR, are valid only as long as “they do not obstruct its direct applicability and do not conceal its [EU] nature, and if they specify that a discretion granted to them by that regulation is being exercised, provided that they adhere to the parameters laid down under it” (CJEU, Case C‑316/10 Danske Svineproducenter v Justitsministeriet, §41).
As always, here is the fine print (or the caveat) whenever we are discussing about the interpretation of EU law: only the CJEU has the authority to interpret EU law in a binding manner.
(Note: The author is grateful to dr. Mihaela Mazilu-Babel, who provided support with preliminary research for this post)
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Posted in Comments, GDPR
Tagged administrative fines GDPR, Article 288 TFEU, Article 83 GDPR, data protection, direct applicability of EU regulations, direct applicability of the GDPR, Gabriela Zanfir-Fortuna, GDPR, Handlbauer, Lebek, Mihaela Mazilu-Babel, privacy, Regulation No 2988/95, Second paragraph of Article 288 TFEU, Variola