To no-one’s very great surprise following the Opinion of AG Bot, the CJEU has today declared the Commission’s Safe Harbor Decision invalid in Case C-362/14 Schrems, with all the consternation that that causes to inter-state trade between the US and the EU.
Fuller commentary when the judgment is available later but it tops off a bad week for data controllers.
Christopher Knight
Now the immediate dust has settled on last weeks’ judgments of the CJEU in Bara and in Weltimmo it is perhaps briefly revisiting both to note some of the real issues and questions which arise. Answers are harder to come by, but the theme is of a rigid approach by the Court to Directive 95/46/EC which squeezes data controllers until the regulatory pips squeak. The impact of both judgments, not to mention the forthcoming Schrems, could be really significant and, frankly, counter-productive in terms of encouraging the free movement of goods and services. Free movement of data is not a Treaty right, and there are obvious needs to place limits and protections on personal data, but whether the CJEU is adopting an approach which gives businesses sufficient room for practical manoeuvre is another matter.
Some thoughts then on a re-reading of both judgments:
The fact that answers do not readily appear to all of these issues may itself be a troubling indicator of a lack of wider and/or deeper thought by the CJEU as to how its judgments will actually work in practice. Doubtless some will be worked through in time. But much of this is far too important to real people doing real things to be left to iron itself out over the next five years. Still waters may run deep, but it is the murky ones you drown in.
Christopher Knight
Former rock ‘n’ roll star Liam Gallagher and former pop star Nicole Appleton were married with children and seemed rock steady as a couple but sadly are now getting divorced and left wondering “where did it all go wrong?” Whatever, some might say, stop crying your heart out about water under the bridge and just roll with it – this is a serious blog whose readers would never ever expect to find stories about celebrity gossip, still less a list of Oasis and All Saints song titles masquerading as a post about information law.
But don’t go away, because the judgment of of Mostyn J in Appleton v Gallagher [2015] EWHC 2689 (Fam) is an interesting one about the very important issue of what the press can report about private court proceedings. Little by little, closed family proceedings are opening up: changes to the Family Procedure Rules made in 2009 permitted journalists to attend private court hearings in the Family Division. The court can make an order excluding them, but only after considering lesser measures such as a reporting restriction order.
In the present case, journalists from the Sun and other newspapers (possibly including the Hindu Times, the judgment does not say) wanted to attend and report on Mr Gallagher and Ms Appleton’s ancillary relief proceedings; Mr G and Ms A wanted to have the press excluded. For procedural reasons it fell to Mostyn J to decide whether reporting restrictions should be imposed before a separate judge decided whether the press should be excluded altogether.
Confused? According to Mostyn J at [6], it is an understatement to say that the law in this area is a mess.
As the judge said at at [9], although section 12 of the Administration of Justice Act 1960 explicitly provides that the reporting of proceedings held in private (except for those which wholly or mainly concern children) is not a contempt of court, such reporting is nonetheless prohibited as a result the implied undertaking that attaches to disclosed information. In the context of private ancillary relief proceedings where there is an obligation to make full and frank disclosure of all financial information that goes far wider than the duty of disclosure in an ordinary civil dispute, the courts have been particularly strict in enforcing this. As stated by Thorpe LJ in Clibbery v Allen (No 2)[2002] EWCA Civ45, “all the evidence (whether written, oral or disclosed documents) and all the pronouncements of the court are prohibited from reporting and from ulterior use unless derived from any part of the proceedings conducted in open court or otherwise released by the judge.”
The submission on behalf of the press (described by Mostyn J as “very bold”) was that this position is now different as a result of the 2009 rule change. Mostyn J rejected this saying the purpose of this “was to enable the world to understand how children proceedings, especially public law care proceedings, were conducted”, and referred to what was said in Re Child X (Residence & Contact – Rights of Media Attendance) [2009] EWHC 1728 (Fam) about it enabling the media to exercise a role as “watchdog” on the part of the public at large. It was not, however, “intended to abrogate [the] core privacy provided by the implied undertaking and the hearing of the proceedings in chambers”, a privacy which he said has been “maintained and endorsed” by Parliament.
In the alternative, the judge said that even if the matter was one of an ordinary balancing exercise, this came down in favour of not allowing reporting, highlighting: (a) the fact that neither party had sought to “yoke the press to his or her cause” or spoken about the divorce and (b) press comments thus far had been limited and there had not been extensive inaccurate speculation.
Some might say [you’ve done this one already – Ed] this judgment will surely be overtaken soon by a comprehensive reconsideration of the law by the Court of Appeal, something urged by Mostyn J at the conclusion of his judgment when he granted permission to appeal. As such, it remains to be seen whether this judgment will live forever or just slide away [That’s enough – Ed.].
Back in July I posted on the Opinion of the AG in Case C-201/14 Bara v Presedintele Casei Nationala de Asigurari de Sanatate and the CJEU has now handed down its judgment, happily for me in English. The context is that people deriving their income from independent activities were called to pay their contributions to the Romanian National Fund for health insurance, following a tax notice issued by the Romanian health insurance fund. However, that tax notice was calculated on the basis of data on income provided National Tax Administration Agency under an internal administrative protocol. The complaint was that the transfer by the Tax Agency to the Health Insurance Fund of personal data, particularly related to income, was in breach of Directive 95/46/EC because no consent had been provided to the transfer, the data subjects had not been informed of the transfer and the transfer was not for the same purpose as the data was originally supplied.
The CJEU has dealt with the matter in pretty unambiguous terms. Such data sharing was a breach of Article 6 of the Directive, which requires processing to be fair and lawful, because data subjects were not informed of the transfer to another public body or the purpose for the transfer: at [34]. It was a breach of Article 10, which requires the data subject to be provided with information concerning the identity of the controller and the purposes of processing, because no such information had been provided, and the derogations in Article 13 had to be done through legislative measures, whilst the Romanian public bodies simply did it by way of a protocol: at [38] and [41]. Moreover, it was a breach of Article 11, which requires a controller who has not obtained the data from the subject itself to inform the data subject of its identity and the purposes of processing, because neither of the public authorities had told data subjects anything at all: at [43].
All in all, your mother was wrong. Do not share things. Or at least, do not share personal data without providing very clear information to the data subject about what is happening and why. It doesn’t matter if you are a public authority. Go to bed without any supper.
Christopher Knight
One of the great difficulties facing data protection lawyers is how Directive 95/46/EC copes with the internet age. How do you work out where processing has happened? How do you work out who is responsible? Where can you sue them or otherwise take action against them? What law applies (important given that the Directive has been implemented in different ways in different Member States)?
Article 4 provides some of the answer:
“1. Each Member State shall apply the national provisions it adopts pursuant to this Directive to the processing of personal data where:
(a) the processing is carried out in the context of the activities of an establishment of the controller on the territory of the Member State; when the same controller is established on the territory of several Member States, he must take the necessary measures to ensure that each of these establishments complies with the obligations laid down by the national law applicable;
(b) the controller is not established on the Member State’s territory, but in a place where its national law applies by virtue of international public law;
(c) the controller is not established on Community territory and, for purposes of processing personal data makes use of equipment, automated or otherwise, situated on the territory of the said Member State, unless such equipment is used only for purposes of transit through the territory of the Community.
2. In the circumstances referred to in paragraph 1 (c), the controller must designate a representative established in the territory of that Member State, without prejudice to legal actions which could be initiated against the controller himself.”
The decision of the CJEU Google Spain gave some consideration to these matters, but while it certainly established that one could pursue Google through it having a presence in a Member State, it did not really deal with the smaller fry.
However, the CJEU’s decision today in Case C-230/14 Weltimmo v Nemzeti (judgment of 1 October 2015) provides a bit more clarification. Weltimmo (as Anya’s post on the AG’s Opinion has previously discussed) is a company registered in Slovakia, but which the Hungarian data protection authority wished to fine for breaches of the Directive. Those breaches related to the activities of property dealing websites Weltimmo ran which advertised properties in Hungary and revealed various items of personal data of the property owners. What factors were relevant in working out whether Weltimmo was established in Hungary under Article 4?
Article 4, stressed the Court, was the key to determining the national law applicable: at [23]. The Directive had prescribed a broad territorial scope (see Google Spain): at [27]. In the particular context of the internet, said the Court without particularly expressing why there should be different tests for different types of business, when working out whether Weltimmo was also established in a State where it was not registered, one had consider “both the degree of stability of the arrangements and the effective exercise of the activities” in the light of “the specific nature of the economic activities” concerned: at [29]. (No mention of where there was not a clear economic activity.) An establishment can be shown by “any real and effective activity – even a minimal one – exercised through stable arrangements“: at [31].
What is relevant then? The presence of just one representative can be sufficient if acting with a sufficient degree of stability through the presence of the necessary equipment for the provision of the services (i.e. not necessarily where the servers are): at [30]. Running a website about properties in Hungary, written in Hungarian, which charges advertising fees constituted a real and effective activity in Hungary: at [32]. The presence of a representative in Hungary, who acts as a point of contact with the Slovak company and the data subjects, and a Hungarian bank account, and a Hungarian letter box for the business, were all capable of showing an establishment: at [33]. What is not relevant is the nationality of the data subjects: at [40] (which is consistent with the classic approach to jurisdiction under the Brussels I regime). The processing itself must take place in the context of the activities in Hungary, but the Court had no difficulty with that: at [38]. As a result, Hungarian law applied to Weltimmo: at [39].
This was all fact-specific of course, but it does give some fairly extensive guidance, and certainly indicates that any website aimed at a particular jurisdiction, plus some sort of physical presence of some sort, will be sufficient to amount to an establishment. Company registration elsewhere will not be an escape route.
There was also a second issue, which was technically obiter, about when a national regulator can take action against a data controller who may be subject to foreign laws. The CJEU strongly emphasised that it was the obligation of the regulator under Article 28 to take action within its own territory and to investigate every complaint made to it, irrespective of the applicable law: at [54]. What it cannot do, of course, is try to fine a controller not established in its own State: at [56]. So, if having investigated, the regulator reaches the conclusion that the controller is established elsewhere and subject to a foreign legal regime, it must ask the relevant national regulator to take over the case and impose any penalty based, in part, on the information provided between regulators: at [57]. Cross-border regulation might not yet be at a one-stop shop level, but it is meant to have teeth.
Weltimmo is a genuinely important decision and provides some very helpful guidance. By no means does it answer all of the questions, particularly outside of the internet, and it does not come close to the beginning of the end. But perhaps, following Google Spain, it is the end of the beginning.
Christopher Knight
