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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CJEU in Manni: data subjects do not have the right to obtain erasure from the Companies Register, but they do have the right to object
by Gabriela Zanfir-Fortuna
The recent judgment of the CJEU in Case C-398/15 Manni (9 March 2017) brings a couple of significant points to the EU data protection case-law:
This commentary will highlight all points enumerated above.
1. Facts of the case
Mr Manni had requested his regional Chamber of Commerce to erase his personal data from the Public Registry of Companies, after he found out that he was losing clients who performed background checks on him through a private company that specialised in finding information in the Public Registry. This happened because Mr Manni had been an administrator of a company that was declared bankrupt more than 10 years before the facts in the main proceedings. In fact, the former company itself was radiated from the Public Registry (§23 to §29).
2. The question in Manni
The question that the CJEU had to answer in Manni was whether the obligation of Member States to keep public Companies Registers[1] and the requirement that personal data must be kept in a form which permits identification of data subjects for no longer than is necessary for the purposes for which the data were collected[2] must be interpreted as meaning that individuals must be allowed to “request the authority responsible for maintaining the Companies Register to limit, after a certain period has elapsed from the dissolution of the company concerned and on the basis of a case-by-case assessment, access to personal data concerning them and entered in that register” (§30).
3. Applicability of Directive 95/46 (Data Protection Directive – ‘DPD’)
First, CJEU clarified that its analysis does not concern processing of data by the specialized rating company, and it only refers to the obligations of the public authority keeping the companies register (§31). Second, the CJEU ascertained that the provisions of the DPD are applicable in this case:
4. The role of the data quality principles and the legitimate grounds for processing in ensuring a high level of protection of fundamental rights
Further, CJEU recalls its case-law stating that the DPD “seeks to ensure a high level of protection of the fundamental rights and freedoms of natural persons” (§37) and that the provisions of the DPD “must necessarily be interpreted in the light of the fundamental rights guaranteed by the Charter”, and especially Articles 7 – respect for private life and 8 – protection of personal data (§39). The Court recalls the content of Articles 7 and 8 and specifically lays out that the requirements under Article 8 Charter “are implemented inter alia in Articles 6, 7, 12, 14 and 28 of Directive 95/46” (§40).
The Court highlights the significance of the data quality principles and the legitimate grounds for processing under the DPD in the context of ensuring a high level of protection of fundamental rights:
The Court applies this test in reverse order, which is, indeed, more logical. A processing activity should, first, be legitimate under one of the lawful grounds for processing and only after ascertaining that this is the case, the question of compliance with the data quality principles should arise.
CJEU finds that in the case at hand the processing activity is legitimized by three lawful grounds (§42, §43):
5. The link between the data retention principle, the right to erasure and the right to object
Article 6(1)(e) of the DPD requires that personal data are kept in a form which permits identification of data subjects for no longer than what is necessary for the purposes for which the data were collected or for which they are further processed. This means that controllers should only retain personal data up until it serves the purpose for which it was processed and automatically anonymise, erase or otherwise make unavailable that data. If the controller does not comply with this obligation, the data subject has two possible avenues to stop the processing: he/she can either ask for erasure of that data, or they can object to the processing based on their particular situation and a justified objection.
CJEU explains that “in the event of failure to comply with the condition laid down in Article 6(1)(e)” of the DPD, “Member States guarantee the person concerned, pursuant to Article 12(b) thereof, the right to obtain from the controller, as appropriate, the erasure or blocking of the data concerned” (§46 and C-131/12 Google/Spain §70).
In addition, the Court explains, Member States also must “grant the data subject the right, inter alia in the cases referred to in Article 7(e) and (f) of that directive, to object at any time on compelling legitimate grounds relating to his particular situation to the processing of data relating to him, save where otherwise provided by national legislation”, pursuant to Article 14(a) DPD (§47).
The CJEU further explains that “the balancing to be carried out under subparagraph (a) of the first paragraph of Article 14 … enables account to be taken in a more specific manner of all the circumstances surrounding the data subject’s particular situation. Where there is a justified objection, the processing instigated by the controller may no longer involve those data” (§47).
6. The pivotal role of the purpose of the processing activity in granting the right to erasure and the right to object
After establishing these general rules, the Court decides that in order to establish where data subjects have the “right to apply to the authority responsible for keeping the register to erase or block the personal data entered in that register after a certain period of time, or to restrict access to it, it is first necessary to ascertain the purpose of that registration” (§48).
The pivotal role of the purpose of the processing operation should not come as a surprise, given the fact that the data retention principle is tightly linked to accomplishing the purpose of the processing operation.
In this case, the Court looked closely at Directive 68/151 and explained at length that the purpose of the disclosure provided for by it is “to protect in particular the interests of third parties in relation to joint stock companies and limited liability companies, since the only safeguards they offer to third parties are their assets” (§49) and “to guarantee legal certainty in relation to dealings between companies and third parties in view of the intensification of trade between Member States” (§50). CJEU also referred to primary EU law, and specifically to Article 54(3)(g) EEC, one of the legal bases of the directive, which “refers to the need to protect the interests of third parties generally, without distinguishing or excluding any categories falling within the ambit of that term” (§51).
The Court further noted that Directive 68/151 makes no express provision regarding the necessity of keeping personal data in the Companies Register “also after the activity has ceased and the company concerned has been dissolved” (§52). However, the Court notes that “it is common ground that even after the dissolution of a company, rights and legal relations relating to it continue to exist” (§53) and “questions requiring such data may arise for many years after a company has ceased to exist” (§54).
Finally, CJEU declared:
7. Conclusion A: there is no right to erasure
The Court concluded that “in those circumstances” the data retention principle in Article 6(1)(e) DPD and the right to erasure in Article 12(b) DPD do not guarantee for the data subjects referred to in Directive 68/151 a right to obtain “as a matter of principle, after a certain period of time from the dissolution of the company concerned, the erasure of personal data concerning them” (§56).
After already reaching this conclusion, the Court also explained that this interpretation of the provisions in question does not result in “disproportionate interference with the fundamental rights of the persons concerned, and particularly their right to respect for private life and their right to protection of personal data as guaranteed by Articles 7 and 8 of the Charter” (§57).
To this end, the Court took into account:
8. Conclusion B: but there is a right to object
After acknowledging that, in principle, the need to protect the interests of third parties in relation to joint-stock companies and limited liability companies and to ensure legal certainty, fair trading and thus the proper functioning of the internal market take precedence over the right of the data subject to object under Article 14 DPD, the Court points out that
“it cannot be excluded, however, that there may be specific situations in which the overriding and legitimate reasons relating to the specific case of the person concerned justify exceptionally that access to personal data entered in the register is limited, upon expiry of a sufficiently long period after the dissolution of the company in question, to third parties who can demonstrate a specific interest in their consultation” (§60).
While the Court leaves it to the national courts to assess each case “having regard to all the relevant circumstances and taking into account the time elapsed since the dissolution of the company concerned”, it also points out that, in the case of Mr Manni, “the mere fact that, allegedly, the properties of a tourist complex built … do not sell because of the fact that potential purchasers of those properties have access to that data in the company register, cannot be regarded as constituting such a reason, in particular in view of the legitimate interest of those purchasers in having that information” (§63).
9. Post Scriptum
The Court took a very pragmatic approach in dealing with the case of Mr Manni. The principles of interpretation it laid down are solid – such an analysis indeed requires looking at the legitimate grounds for processing and the relevant data quality principle. Having the Court placing strong emphasis on the significance of the purpose of the processing activity is welcome, just like having more guidance on the balancing exercise of the rights and interests in question. In addition, a separate assessment of the right to obtain erasure and of the right to object is very helpful with a view towards the future – the full entering into force of the GDPR and its heightened rights of the data subject.
The aspect of the judgment that leaves some room for improvement is analysing the proportionality of the interference of the virtually unlimited publishing of personal data in the Companies Register with Articles 7 and 8 of the Charter. The Court does tackle this, but lightly – and it brings two arguments only after already declaring that the interference is not disproportionate. Moreover, the Court does not distinguish between interferences with Article 7 and interferences with Article 8.
Finally, I was happy to see that the predicted outcome of the case, as announced in the pdpEcho commentary on the Opinion of the Advocate General Bot, proved to be mainly correct: “the Court will follow the AG’s Opinion to a large extent. However, it may be more focused on the fundamental rights aspect of balancing the two Directives and it may actually analyse the content of the right to erasure and its exceptions. The outcome, however, is likely to be the same.”
Suggested citation: G. Zanfir-Fortuna, “CJEU in Manni: data subjects do not have the right to obtain erasure from the Companies Register, but they do have the right to object”, pdpEcho.com, 13 March 2017.
[1] Article 3 of Directive 68/151.
[2] Article 6(1)(e) of Directive 95/46.
[3] Article 2(a) of Directive 95/46.
[4] Article 2(d) of Directive 95/46.
[5] Article 2(b) of Directive 95/46.
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Tagged C-398/15 Manni, Chamber of Commerce, CJEU, commentary Manny case, Companies Register, data protection, data retention, Gabriela Zanfir-Fortuna, manni, pdpecho Manni, pedpecho, purpose of processing, right to be forgotten, right to erasure, right to object, RTBF