The UK’s Online Safety Bill – Implications for US and International Businesses

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On 19 September 2023, the UK Parliament passed the Online Safety Bill (“OSB”). The OSB aims to protect individuals from illegal online content and focuses on the protection of children by requiring the removal of content that is legal but harmful to children. For example, social media platforms will be required to act rapidly to prevent children from viewing illegal material, or content that is harmful to them, such as pornography, online bullying, and the promotion of suicide, self-harm or eating disorders. The definition of illegal content covers content that is already unlawful under existing legislation, such as terrorism, hate speech and child sexual exploitation, and introduces new offences relating to more recent online phenomena such as revenge pornography, and ‘upskirting’ and ‘downblousing’ images. This is one of the most significant pieces of UK legislation post-Brexit and shows a distinctly UK approach to online harms, which businesses operating globally will need to comply with. This will need to be reviewed in parallel with the EU Digital Services Act, which has similar goals in making Europe a safe online environment.

A date for Royal Assent (when the OSB will become law) is expected shortly. The OSB’s wide scope makes it likely to result in implementation problems and potential challenges resulting from the impact the OSB is likely to have on freedom of expression and personal privacy. The underlying principles of the OSB are very different to those familiar with US laws and the constitutional protections for free speech. The risks of non-compliance will be significant, with extremely high potential fines of up to 10% of a company’s global revenue.

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The European Commission Adopts Adequacy Decision on EU-U.S. Data Privacy Framework

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On 10 July 2023, the European Commission adopted its long-awaited adequacy decision for the EU-U.S. Data Privacy Framework (the DPF). With immediate effect, the adequacy decision provides a new lawful basis for transfers from the EU to the U.S. This means that companies that participate in the DPF are able to transfer data from the EU to the U.S. without relying on another data transfer mechanism, such as Standard Contractual Clauses (SCCs) or binding corporate rules (BCRs).

Background to the Adequacy Decision

Pursuant to Article 45(3) of the GDPR, the European Commission has the power, by means of an adequacy decision, to decide that a non-EU country has sufficient standards of data protection to be treated as equivalent to those afforded in the EU.

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Meta Fined EUR 1.2 Billion for Violating GDPR

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Yesterday, the Irish Data Protection Commission (DPC) issued Meta Platforms Ireland Limited with a EUR 1.2 billion (approximately 1.3 billion U.S. dollar) fine for breaches of the GDPR with respect to EU-U.S. personal data transfers associated with its Facebook service. Meta Ireland has also been ordered to suspend all Facebook-related personal data transfers from the EU to the U.S., and to bring the processing of any previously transferred data into compliance.

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Österreichische Post: The CJEU Specifies the Requirements for Compensation for Breaches of the GDPR

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On 4 May 2023, the European Court of Justice (CJEU) delivered its highly anticipated judgement in Österreichische Post (Case C-300/21) on a crucial issue: the extent to which data subjects affected by a breach of the GDPR have a right to compensation for non-material damage under Article 82 GDPR.

Background

The underlying case arose from a data subject in Austria seeking 1,000 EUR ($1,009) in compensation for alleged non-material damages arising from Österreichische Post’s processing of his personal data for the purposes of political advertising. The individual had not consented to the processing and claimed that he felt offended by the fact that an affinity to a certain political party was attributed to him, alongside feelings of great upset, loss of confidence and exposure caused by the retention of his data on these supposed political opinions.

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Meta Fines Expose EU Regulators’ Differences and Highlight Fundamental Issues for Data Controllers

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Meta Ireland (Meta) has recently been issued with two fines by the Irish Data Protection Commission (DPC) for breaches of the EU General Data Protection Regulation (GDPR) relating to advertisements run on its Facebook and Instagram services. The decisions highlight some fundamental issues for all data controllers in respect of identifying the appropriate legal basis for their data processing operations and the need to be transparent about how personal data is used. The decisions also reveal some core differences in approach between the DPC, the Irish national privacy regulator in this case, and the European Data Protection Board (EDPB). It signals the likelihood of ongoing wrangling between the various European data regulators as they seek to interpret the decisions and as they are (inevitably) challenged through the courts.

The penalty imposed against Meta Ireland

The substantial fines of €210m (approximately $223m) with respect to Facebook and €180m (approximately $191m) with respect to Instagram reflect the consolidated turnover of the Meta group and the level of fines which, in the EDPB’s view, are required to be effective, proportionate and dissuasive in accordance with Article 83(1) of the GDPR. Meta now has 3 months to take corrective action and amend its privacy policies (including identifying an appropriate legal basis for processing) and its operations to bring its data processing in line with the GDPR.

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Court of Justice of the European Union Recognizes Inferred Special Categories of Personal Data

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On August 1, 2022, the Court of Justice of the European Union (CJEU) issued an opinion regarding a Lithuanian data protection case that may signal an expansion of interpretation of the definition of sensitive personal data under the EU’s General Data Protection Regulation (GDPR). Specifically, the CJEU found that data indirectly disclosing sexual orientation constitutes sensitive personal data.

At issue was a Lithuanian law that requires the Chief Official Ethics Commission of Lithuania to publish information about the private interests of public officials in an effort to combat corruption. In the facts underlying the case, a Lithuanian official objected to the Chief Official Ethics Commission’s online publication of his private interest information, which included his spouse’s name. The CJEU concluded that the publication of such information was prohibited by the GDPR because it was “liable to disclose indirectly the sexual orientation of a natural person,” a type of special category of personal data generally prohibited from processing under GDPR Article 9 (processing of special categories of personal data) unless certain additional conditions are satisfied such as the data subject’s explicit consent, or that processing is necessary for reasons of substantial public interest.

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