Data security is at the heart of the upcoming General Data Protection Regulation (GDPR). It sets strict obligations on data controllers and processors in matters pertaining data security while concurrently providing guidance on the best data security practices. And for the first time, the GDPR will introduce specific breach notification guidelines. With only a few months to go until the new regulations come into effect, businesses should begin focusing on data security. Not just because of the costs and reputational damage a personal data breach can lead to; but also because under the GDPR, a new data breach notification regime will be applied to statute the reporting of certain data breaches to affected individuals and data protection authorities.
What Constitutes a Personal Data Breach Under GDPR?
GDPR describes A personal data breach as – a security breach that leads to the unlawful or accidental loss, destruction, alteration, or unauthorized disclosure of personal data stored, processed or transmitted. A personal data breach is by all means a security incident; however, not all security incidents require the same strict reporting regulations as a personal data breach. Despite the broad definition, it is not unusual in data security laws that require breach reporting. HIPAA, for example, makes the same distinctions at the federal level for medical data. It aims to prevent data protection regulators from being overwhelmed with breach reports.
By limiting breach notifications to personal data (EU speak for personally identifiable information – PII), incidents that solely involve the loss of company data/ intellectual property will not have to be reported. The threshold to establish whether an incident has to be reported to a data protection authority is dependent on the risk it poses to the individuals involved. High risk situations are those that can potentially lead to the significant detrimental suffering – for example, financial loss, discrimination, damage to reputation or any other significant social or economic disadvantage.
…it should be quickly established whether a personal data breach has occurred and to promptly notify the supervisory authority and the data subject.
– Recital 87, GDPR
If an organization is uncertain about who has been affected, the data protection authority can advise and, in certain situations, instruct them to immediately contact the individuals affected is the security breach is deemed to be high risk.
What Does The GDPR Require You to Do?
Under GDPR, the roles and responsibilities of processors and data controllers have been separated. Controllers are obliged to only engage processors who are capable of providing sufficient assurances to implement appropriate organizational and technical measures to protect the rights of data subjects. In the event of a data breach that affects the rights and freedoms of said data subjects, the organization should report it, without any delay and, where practicable, within 72 hours of becoming aware of it.
The data processor is mandated to notify the controller the moment a breach is discovered, but has no other reporting or notification obligation under the GDPR. However, the 72-hour deadline begins the moment the processor becomes aware of the data breach, not when the controller is notified of the breach. A breach notification to a data protection authority has to at least:
- Have a description of the nature of the breach, which includes the categories and number of data subjects affected.
- Contain the data protection officer’s (DPO) contact information.
- Have a description of the possible ramifications of the breach.
- Have a description of steps the controller will take to mitigate the effect of the breach.
The information can be provided in phases if it is not available all at once.
If the controller determines that the personal data breach can potentially put the right and freedoms of individuals at risk, it has to communicate any information regarding the breach to the data subjects without undue delay. The communication should plainly and clearly describe the nature of the personal data breach and at least:
- Contain the DPO’s contact details or a relevant contact point.
- Have a description of the possible ramifications of the breach.
- Have a description of measures proposed or taken to mitigate or address the effects of the breach.
The only exception in this case is if the personal data has been encrypted, and the decryption key has not been compromised, then there is not need for the controller to notify the data subject.
The most ideal way for companies to handle this GDPR obligation is to not only minimize breaches, but also, establish policies that facilitate risk assessment and demonstrates compliance.
The GDPR stipulates that all the records pertaining the personal data breach, regardless of whether the breach needs to be reported or not. Said records have to contain the details of the breach, any consequences and effects, and the follow up actions taken to remedy the situation.
Should Ransomware Attacks Be Reported?
Ransomware typically involves the ‘hijacking’ of cooperate data via encryption and payment is demanded in order to decrypt the ransomed data. Under GDPR, Ransomware attacks may be categorized as a security incident but it does not necessarily cross the threshold of a personal data breach. A Ransomware attack would only be considered a personal data breach if there is a back up but the outage directly impacts user’s freedoms and rights, or if there is no back up at all. Ideally, a Ransomware attack where the ransomed data can be quickly recovered does not have to be reported.
What Are the Consequences of Non-Compliance?
A failure to comply with the GDPR’s breach reporting requirements will not only result in negative PR, constant scrutiny, and possibly loss of business; but will also attract an administrative fine of up to € 10 million or up to two percent of the total global annual turnover of the preceding financial year. Additionally, failure to to notify the supervising authority may be indicative of systematic security failures. The would show an additional breach of GDPR and attract more fines. The GDPR does have a list of factors the supervising authority should consider when imposing fine; chief among them being the degree of co-operation by the data controller with protection authority.
Data breach notification laws have already been firmly established in the U.S. These laws are designed to push organizations to improve their efforts in the detection and deterrence of data breaches. The regulators intentions are not to punish but to establish a trustful business environment by equipping organizations to deal with with security issues.
Author: Gabriel Lando