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:
“A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.”
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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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