A multitude of new regulations are either in the ordinary legislative procedure or already in force. These include the Data Act, the Data Governance Act, the Digital Services Act, the Digital Markets Act, the Cyber-Resilience Act, European Health Data Space Regulation, the Artificial Intelligence Act. Data regulations in the European Union (EU) are becoming more complex and challenging for businesses to comply with. The increasing number of administrative burdens and compliance requirements in these regulated areas are a valid concern for businesses. Supervisory enforcement, for enacted regulations will be a wake-up call for organizations that are not prepared. Tech players operating in the EU and authorities overseeing those activities face the similar challenge of adapting to legislative overlap. New fines, new supervisory authorities and new compliance requirements are expected. To better understand this burst of regulation, the EU’s strategic policies must be carefully examined.

What is the EU aiming for?

• The United States (US) and China (CN) have different advantages in the field of technological competitiveness. 
• The US has a strong private sector with abundant financial resources, while CN has a state-sponsored private sector. 
• The EU meanwhile wants to shape its own digital future, and create a competitive Digital Single Market while enforcing European democratic values. In a short span of time, the European Commission has implemented digital transformation policies to become more competitive in the global economy, reduce the carbon footprint that arises from the red-tape bureaucracy and go digital. 
• Better public services and comprehensive scientific research will be strengthened by the re-use of data envisaged in the European Strategy for Data. 

Understanding the distinct European view on data 

Greater productivity for IoT and data-enabled products are also on the list. But greater accessibility to data is needed to enable innovation in a data-driven economy. This explains why data intermediaries are expected to play a key economic role, as envisioned in the Data Governance Act. Making more data available to smaller players will be made possible by creating common European data spaces in strategic sectors. There are multiple underlying reasons for the data spaces, all of which align with the strategic data policies of the European Union.

• The new regulations are in line with the existing strategic objectives, allowing for organizations to get ahead of the game by embracing the EU’s strategic data policies. 
• The industrial data space and co-generated industrial data is part of the Data Act. 
• The common European health data space is also regulated with the upcoming European Health Data Space Regulation. 
• Green Deal data space, financial data space, energy data space, agricultural data spaces, are also mentioned in the “European Strategy for Data”.

EU strategic goals

• The digitalisation of public services and the digital transformation of businesses are of high priority in the 2030 Digital Compass: the European way for the Digital Decade. 
• The Digital Compass goals are consistent with the rising amount of data being created in the EU. 
• The EU is determined to maintain its regulatory norms and standards in its relations with international partners. 
• By 2030, the EU aims to build an interconnected data processing ecosystem conscious of fundamental rights and in full compliance with legal requirements. As stated in the 2030 Digital Compass policy, the EU will continue to promote the ethical use of AI, establish strict cybersecurity and resilience requirements, tackle disinformation and illegal content online, ensure the operational security of digital finance and facilitate transformation of e-government. Respectively, these strategic policies are being covered by the Artificial Intelligence Act, the NIS2 directive and Cyber-Resilience Act, the Digital Services Act, the Digital Operational Resilience Act for the financial sector and European Health Data Space Regulation.

Implications for the future

These new regulations pave the way for the EU to achieve its new industrial strategy of climate neutrality and digital leadership. They help to reduce the carbon footprint and prevent red tape bureaucracy. 

• The digital transformation is essential for a greener EU.
• The reuse of data is also critical. 
• As stated in the EU Strategy for Data, this includes greater productivity and competitive markets, as well as improvements in health and well-being. 

The emergence of data-driven ecosystems can prove itself in the long run but it may take years for the EU to figure out the interplay of new regulations within the existing legal frameworks, the preparation of new guidelines and the appropriate degree of coordination between supervisory authorities. 

The EU will need to ensure that data and data-enabled products and services are available throughout the single market. Considering the EU’s goal of building a legal digital framework and becoming an international market leader, similar regulations may spread over time to different continents through the Brussels Effect. The key intention is to create a European data ecosystem that is respectful of fundamental rights. Whether these strategic intentions will be translated into the regulatory scope as intended remains to be seen. 

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About WIFI-tracking

WiFi-tracking technology relies on devices such as smart phones sending so called probe requests. With enabled wireless network, a device will broadcast a probe in regular intervals to see which known or unknown wireless networks are available to possibly connect to. By capturing these requests along with some other information such as signal strength and time, a fairly accurate analysis of the location and behavior can be made. By combining data from different access points in close vicinity, an accurate location can be determined through trilateration.

The GDPR as introduced on May 25^th 2018, does make this practice harder: as MAC (Media Access Control) addresses are considered (pseudonymised) personal data, e.g. it can be used to single out a person, it requires a valid legal base and adherence to the other articles of GDPR. This article explores the possibilities for meeting these requirements.

Personal data and scope of the GDPR

The definition of personal data under the GDPR is outlined in Article 4(1):

‘personal data’ means any information relating to an identified or identifiable natural person (‘data subject’); an identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person;

On 19 October 2016, the Court of Justice of the European Union (the “CJEU”) published its judgment in Case 582/14 – Patrick Breyer v Germany. This judgement concludes that dynamic IP addresses are to be seen as personal data, and following the same logic, MAC addresses of personal devices are therefore certainly to be seen as personal data.

While alternatives for MAC addresses, such as hashed or encrypted versions, can be stored and processed, these would still be considered pseudonymous if they can uniquely single out a single device belonging to a natural person. Pseudonymising data does not move it out of scope of the GDPR as the data can still be linked back to a natural person, with the use of extra information.

As soon as position of devices is determined, there is location data available as well which certainly falls under the GDPR.

Once data is truly anonymized (e.g. aggregated data with a significant enough sample size), and it can no longer be related back to a single data subject, it will be out of scope of the GDPR and can be further used. Nevertheless a valid legal base will be required for the initial collection of any personal data.

Who is the controller?

Defining the different stakeholders is important to further analyze the GDPR compliance. The data subject within WiFi-tracking is the person with a personal, WiFi-enabled device that is being tracked. This person should be guaranteed GDPR compliant processing of his or her personal data. That includes the requirement of properly informing them about their data being processed their rights under the GDPR.

Defining the data controller and data processor is more challenging. The GDPR has defined that the controller is the one ‘determining the means and purpose for processing’ and the processor as the one ‘processing data on behalf of the controller, based on specific written instructions’. In a WiFi-tracking situation this may mean different things based on the specifics of the setup.

If a venue utilizes WiFi-tracking for its own purposes (such as capacity planning) with its own hardware using a third party software, it is quite likely that the venue is the controller, and the third party software provider the processor. This also requires a data processing agreement to be in place between the two to ensure the processor is given specific written instructions for processing.

In case the hardware is placed in the venue by a third party service provider, and the data is then made available directly to them for purposes pursued by the service provider, this may as well be determined to be the controller.

Legal bases

For the processing of personal data under the GDPR, the controller needs to define the legal base of processing. There are 6 possible legal bases (Art 6 GDPR, sub 1): (a) consent, (b) performance of a contract, (c) legal obligation, (d) vital interest, (e) public interest and (f) legitimate interest. Legal bases c, d and e do certainly not apply as WiFi-tracking can not be seen as a legal obligation, in anyone’s vital interest or in public interest in general. The other possible legal bases are analyzed hereunder.

Consent (Art 6.1a)

To claim the legal base of consent, the data subject will need to freely give prior consent to the processing in case. It is important to emphasize that consent need to be freely given and can therefor not be required for the provision or ‘payment with data’ of a service.

Recital 42: “… Consent should not be regarded as freely given if the data subject has no genuine or free choice or is unable to refuse or withdraw consent without detriment.”

Recital 43: “Consent is presumed not to be freely given if it does not allow separate consent to be given to different personal data processing operations despite it being appropriate in the individual case, or if the performance of a contract, including the provision of a service, is dependent on the consent despite such consent not being necessary for such performance.”

If consent was a precondition of a service, but the processing is not necessary for that service, consent is deemed to be invalid. Mixing in the consent for tracking with the use of guest WiFi or a loyalty program, is therefor not possible. Consent to WiFi-tracking should be given as an additional, non-required option.

In addition, consent should be revocable as easily as it has been given. A system should be in place that allows for consent to be revoked at any place and time.

Collecting consent

1. Using a captive portal
2. Using proximity push notifications
3. Through a loyalty program

Performance of a Contract (Art 6.1b)

The performance of a contract may be used for fulfilling contractual obligations, as well as for the preparatory stages of concluding a contract. This however, would imply that at least at some point a ‘business’ relationship for the usage of data can be substantiated.

If data subjects may be rewarded in some kind of way for providing their tracking details and usage data, this could be a way to explore the use of Article 6.1b as a legal base, but not until the data subject has shown interest in such a relationship themselves, e.g. it can not be assumed. In short, for tracking behavior without further reward program, this legal base can not be applied.

Legitimate Interest (Art. 6.1f)

Legitimate interest may be the legal basis for processing user data if the interests of the user do not override the interest of the controller when considering the reasonable expectations of the data subject and their relationship with the controller, according to the GDPR. The determination of legitimate interest requires “careful assessment” of these reasonable expectations and the context of data collection.

A legitimate interest could be a purely commercial interest. The legitimate interest and it’s balancing against the interest of the data subject, need to be well documented and the essence of it is to be explained to the user.

What is important to consider for legitimate interest, is to analyze if there are less privacy-intrusive methods of reaching the same goal. If this is the goal, legitimate interest is unlikely to hold up.

Opinion 06/2014 on the notion of legitimate interests of the data controller under Article 7 of Directive 95/46/EC (which has been adopted as guidance under the GDPR) states:

The economic interests of business organizations to get to know their customers by tracking and monitoring their activities online and offline, should be balanced against the (fundamental) rights to privacy and the protection of personal data of these individuals and their interest not to be unduly monitored.

According to the same opinion, in case the goal of the tracking is marketing, there are more specific requirements under the ePrivacy Directive:

consent is required under Article 5(3) of the ePrivacy Directive for behavioral advertising based on tracking techniques such as cookies storing information in the terminal of the user.

Public space vs. private space

Strong opinions by data protection authorities, for example the Dutch DPA have been issued on WiFi-tracking in (semi-)public spaces. While WiFi-tracking within private (commercial) space can be legitimized, the moment personal data of those outside of the premises (e.g. passers-by) are analyzed it is very difficult to base this on legitimate interest.

If legitimate interest is used as a legal base, measures may need to be in place to ensure that only data subjects in the companies premises are being tracked.

Fulfilling the duty of information

Whichever legal base is chosen, as soon as personal data is collected of data subjects, they need to be informed. The regulation prescribes this as follows in Article 13:

Where personal data relating to a data subject are collected from the data subject, the controller shall, at the time when personal data are obtained, provide the data subject with all of the following information: …

This means that the controller has the duty to inform data subjects. Which is in the situation of an app or website, normally practiced by publishing a privacy notice. In the case of WiFi-tracking, this is obviously more problematic. One way may be to display a clear notice at the border of the perimeter, for example with a sticker on the door.

At the same time, data subjects should also have the choice not to be subjected to data processing, and would therefor need to be advised to switch off their WiFi in case they wish to opt out.

Data minimization and storage limitation

Whatever personal data is stored under the GDPR needs to be the minimum amount required to meet the specified purpose, and needs to be stored no longer than required for this purpose.

In current implementations of data protection for WiFi-tracking, there is a big emphasis on timely anonymization and limited storage as means to protect the privacy of the users. NS, in the example below, uses a different hash per day in order not to be able to correlate information across multiple days.

Mechanisms to exercise rights

Whenever personal data is collected from data subjects, they have rights under the GDPR, and they need to be informed about them and given ways to execute their rights. These rights could be rights to justification, right to erasure, right to information and the right not to object to automated decision making. The first ones could be surfaced through a website, portal or app of some sort. The last one needs to be closely considered in terms of what happens with their date.

Example of WiFi-tracking in practice and their explanation of compliance to the GDPR.

At the time of writing, Nederlandse Spoorwegen (Short:NS, translated: Dutch Railways) uses WiFi-tracking on (at the time of writing) 6 of its larger train stations. They make travelers aware of this with stickers indicating the use of WiFi-tracking around the station, and explain the mechanics behind it in their privacy policy: https://www.ns.nl/en/privacy/in-and-around-the-station.html

In summary, they use the legal base of the legitimate interest “to improve our services and to increase your safety in and around the station.” and use technical measures to limit and further pseudonymize the MAC addresses collected:

“The MAC address is immediately ‘hashed’ – converted into a series of characters. This series is then sent to a server, where we add extra random characters and hash the series again (a process known as ‘salt’). The extra characters differ per day, and are not stored on a computer. We then ‘cut out’ some of the characters, so that there is no way that the series can be traced to an individual.”

Other requirements under the GDPR

As WiFi-tracking counts as monitoring of behavior, and should in most cases be considered on large scale, both the controller and processor will need to designate a data protection officer, and, in case it has no establishment in the EU, also designate a EU representative.

ePrivacy Regulation and Directive

The ePrivacy directive, and in the future the ePrivacy Regulation deals with communication instead of data processing, and is therefore relevant for the use of WiFi-tracking. It will be further scrutinized with the introduction of the ePrivacy regulation. The regulation prohibits companies from using consent collection methods that force users to agree to tracking in order to receive access to services. The Regulation provides three possible purposes for tracking:

• When it is necessary to transmit an electronic communication.
• When it is necessary to provide an information society service requested by the user.
• When it is necessary to measure the reach of an information service requested by the user.

The original draft of the ePrivacy Regulation also contains provisions for the protection of data subjects using public WiFi. That initial draft stated that tracking an individual’s location through a WiFi or Bluetooth connection was permitted. However, in response, Parliament and the Working Party proposed solutions that would require businesses that have locations which provide WiFi to obtain a data subject’s consent before tracking and to post a notice on the possible dangers of using their WiFi connection in a prominent place.

The latest draft of the ePrivacy regulation, dated October 2018, contains the following relevant passage in recital 25:

A single wireless base station (i.e. a transmitter and receiver), such as a wireless access point, has a specific range within which such information may be captured. Service providers have emerged who offer physical movements’ tracking services based on the scanning of equipment related information with diverse functionalities, including people counting, such as providing data on the number of people waiting in line, ascertaining the number of people in a specific area, etc referred to as statistical counting for which the consent of end-users is not needed, provided that such counting is limited in time and space to the extent necessary for this purpose.

Providers should also apply appropriate technical and organisations measures to ensure the level if security appropriate to the risks, including pseudonymisation of the data and making it anonymous or erase it as soon it is not longer needed for this purpose. Providers engaged in such practices should display prominent notices located on the edge of the area of coverage informing end-users prior to entering the defined area that the technology is in operation within a given perimeter, the purpose of the tracking, the person responsible for it and the existence of any measure the end-user of the terminal equipment can take to minimize or stop the collection.

Additional information should be provided where personal data are collected pursuant to Article 13 of Regulation (EU) 2016/679. This information may be used for more intrusive purposes, which should not be considered statistical counting, such as to send commercial messages to end-users, for example when they enter stores, with personalized offers locations, subject to the conditions laid down in this Regulation, as well as the tracking of individuals over time, including repeated visits to specified locations.

There is no final draft of the ePrivacy Regulation yet, so the exact implementation of these requirements remains unclear for the time being. It is expected that once officially adopted, the Regulation will come into force 24 months later.

Conclusion

Generally spoken, WiFi-tracking under the GDPR (and ePrivacy regulation in the future) is challenging. The main problems revolve around:

1. WiFi-tracking relies on MAC addresses, which are considered personal data, even in hashed form.
2. It is required to inform data subjects before collection of personal data takes place.
3. Consent as a legal base is challenging as it’s very difficult to collect valid, freely given consent from data subjects. Where consent may be collected, e.g. through a captive portal, it is quite unlikely to have a high conversion rate.

Possible approaches to GDPR compliance

There are some approaches that can be considered to utilize WiFi-tracking within the requirements of the GDPR:

1. Informing and asking for consent through a captive portal, push notification or app before tracking users.

Where the legal base of processing personal data would be consent, one approach may be to ask consent through a captive portal. This could be set up as an additional option when asking people to agree to conditions for using guest WiFi.

2. Relying on legitimate interest for tracking.

It seems possible to rely on legitimate interest for tracking in certain cases, but this limits what the tracked data can be used for. It needs to be possible to argue for a real, legitimate interest that can not or hardly be met using less privacy-intrusive methods. It can be further debated if direct marketing or advertising can constitute a legitimate interest for this purpose or not. If that is the case, all data subjects need to be given an easy way to opt-out of this tracking.

3. Find a way to moving the data out of scope of the GDPR though anonymized collection.

If a way can be found to properly anonymize data following the requirements of the GDPR, it will be out of scope of the GDPR and can therefor (from that point onwards) be processed freely. The challenge with this approach is the correlation of data which will become impossible if the data is anonymized right at collection. Also, for low traffic areas, the sample size may be too insignificant to ensure that tracking is truly anonymous.

NOTE: This article does not constitute or replace legal and professional advise. Consult your lawyer or privacy professional before using WiFi-tracking.

The post WiFi-Tracking and Retail Analytics under the GDPR appeared first on TechGDPR.

“In order to be able to demonstrate compliance with this Regulation, the controller should adopt internal policies and implement measures which meet in particular the principles of data protection by design and data protection by default. Such measures could consist, inter alia, of minimizing the processing of personal data, pseudonymising personal data as soon as possible, transparency with regard to the functions and processing of personal data, enabling the data subject to monitor the data processing, enabling the controller to create and improve security features.” (Recital 78)

Simply put, the GDPR expects companies and other organizations to implement technical and organizational measures at their earliest stages of design and at the earliest stages of their operations.  They need to do this in a way that safeguards privacy and data protection principles right from the start (“data protection by design”). Such requirements are also, quite frankly, simple due diligence in the world of reliable data management. So, how does one actually “design” data protection for data subjects?

What is Privacy by Design?

Privacy by design is not a new concept. It is the philosophy proposed by Dr. Ann Cavoukian, the Information and Privacy Commissioner of Ontario in the 1990s. Ann Cavoukian is widely recognized as the primary creator of the privacy by design concept. She defines it as an approach to technology design that embeds privacy-enhancing measures into technology at the point of design and production, and sells to technology to consumers with strong default privacy settings. The foundational principles of “Privacy by Design” as suggested by Ann Cavoukian are:

• Privacy by design is proactive, not reactive; it is preventative, not remedial. Privacy by design anticipates and protects privacy against negative and invasive effects of new products and technologies before they happen.
• Privacy by design ensures privacy as the default, which means that personal data are automatically protected in any given IT system. If an individual does nothing, their privacy still remains intact. No action is required on the part of the individual to protect their privacy − it is built into the system, by default.
• Privacy by design means that privacy is embedded into the design and the architecture of the IT system. It is not bolted on, after-the-fact. The result is that privacy becomes an essential component of the core functionality that is being delivered.

• Privacy by design permits full functionality. When embedding privacy into a given technology, process, or system, it should be done in such a way that full functionality is not impaired, and to the greatest extent possible, that all requirements are optimized.
• Privacy by design extends securely throughout the entire lifecycle of the data involved. Strong security measures are essential to privacy, from start to finish. Privacy must be continuously protected across the entire domain and throughout the life-cycle of the data in question. There should be no gaps in either protection or accountability. The “Security” principle has special relevance here because, at its essence, without strong security, there can be no privacy.
• Privacy by design seeks to assure visibility and transparency, as they are essential to establishing accountability and trust.
• Privacy by design is consciously designed around the interests and needs of individual users, who have the greatest vested interest in the management of their own personal data. The architects should keep the interests of the individual uppermost by offering such measures as strong privacy defaults, appropriate notice, and empowering user-friendly options. Keep it user-centric!

After the GDPR came into force on May 25th, 2018 many companies became tempted to regard the regulation as a compliance burden. However, GDPR is about reputation and not just regulation. The benefits of meeting the requirement for data protection by design, which is essentially the GDPR’s version of “privacy by design” go far beyond any legal compliance.  Also, as stated earlier, much of it is standard housekeeping if you are already a company that prioritizes data security. 

New Consumer Privacy Expectations

Studies have shown that data privacy is a consideration steadily more expected by the consumers. According to a survey conducted online by The Harris Poll on behalf of IBM between March 20-26th, 2018, 78% of U.S. respondents say that a company’s ability to keep their data private is “extremely important” and only 20% “completely trust” organizations they interact with to maintain the privacy of their data. This suggests that privacy breaches not only have significant financial implications but can also cause reputational damage.  If consumers do not feel that their privacy is being protected, they will seek out other means of ensuring their privacy. 

Embracing privacy from the design phase enables companies to protect customers’ data and enhance their business reputation. It enables trusted, long-term relationships with the existing customers and the opportunity to attract new ones. Irrespective of whether they are affected by the regulatory framework itself, companies should make privacy an integral part of their DNA and their offering for their existence and for their customers’ well being. This is good news for those working in any sector, including IoT (Internet of Things), machine learning, and blockchain.

The reality—that brand reputation and consumer trust are inextricably linked—is especially true in the IoT context. According to one estimate, the total number of connected IoT sensors and devices is set to exceed 50 billion by 2022, up from an estimated 21 billion in 2018. Consumers (or as the GDPR calls them, “data subjects”) want organizations to give them more control over their personal information as the Internet of Things (IoT) grows, and connected devices harvest even more of their data, according to research from the Economic Intelligence Unit (EIU). As more devices, platforms, and infrastructure connect to the Internet in real-time, the most successful industry participants will be those that regard Privacy by Design as an opportunity to demonstrate that they are worthy of consumers’ trust.

A recent report by O’Reilly outlines the current state of machine learning adoption in the enterprise and reveals that in order to keep pace with developing privacy needs, machine learning needs to evolve. “With the EU’s recent General Data Protection Regulation mandates, more companies will begin to implement privacy safeguards into their machine learning practices”, says the report. It further reveals that the GDPR pushes for “privacy by design,” and that more businesses are taking interest in privacy-preserving analytic methods. These methods include techniques like differential privacy, homomorphic encryption, federated learning, and more.

Such privacy-preserving applications not only help companies become GDPR complaint but also allow users to benefit from the security of blockchain, among other technologies.  It’s worth noting that the popularity of new decentralized networks comes in large part from the expectation that they offer a means of protecting one’s identity. Ultimately, whatever the technology, taking early action to preserve personal privacy is a winner for both the parties, the companies and the users.  The sooner you start, the easier it will be. 

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Understand Your Collaborators

Knowing who is handling IoT security for a given device is critical. A great many IoT ventures do not work solely on their own, and require partners in order to most effectively collect, store, and analyze their data. If you are collaborating with anyone, it is important to confirm that they have these three things:

1. A means of collecting consent from users if personal data could be collected by any device (even non-consumer devices may have what the GDPR considers personal data).
2. Contingency plans in place for data breaches where affected people can be notified.
3. Safe data storage procedures.

The best way to know if your collaborators thoughtfully understand and respond to these three needs is to already have them in place within your own organization. Here are more details regarding how to do exactly that.

Know When to Collect Consent

Sometimes the toughest part of collecting consent is understanding the context in which an IoT device may be collecting personal data.  This can be more straightforward for companies that collect data from household appliances or other consumer devices where usage habits regularly equals personal data. Less clear is when connected devices are being used in areas such as research, B2B engagements and the monitoring of other machines. In a web of interconnected devices, tracing a trail of breadcrumbs back to a single individual’s ‘personal’ data and determining if you are indeed the liable party who must request their consent can be far more difficult than first expected.  To address this, you will need not only legal resources, but also experts in your field who can relay unique technological constraints of a given case to those who best understand the law.

Improve Your Data Storage Methods

This step is the most straightforward.  Even without the GDPR, no serious company considers reliable data security an optional measure. Though many have feared a negative impact of the GDPR on technological innovation, the incentive under new regulations to improve data storage doesn’t place a ceiling on progress, but a floor. Being transparent about actions taken as it regards security and storage procedures is also very important, even for companies that aren’t in constant dialogue with customers. It can also be tougher task for IoT ventures that don’t directly (or intentionally) handle consumers’ personal data to understand how to most effectively identify it.  A science lab studying algae, for example, is somewhat less incentivized to worry about personal data on their IoT devices than a company that regularly has direct connections to customers. Nevertheless, IoT security should still be a concern in both cases.

Prepare for Breaches & Establish Plans of Action

Before even considering the damages of a data breach, consider what can be done to prevent them in the first place.  For IoT security, that begins with regular software updates. Since many IoT devices are difficult to patch and are also connected to other personal devices that hold far more sensitive data, being aware of every vulnerability is a must. So, too, is allocating enough time and resources to update all devices early and often. If there is a breach, there must be an established process for identifying it, communicating the breach to authorities, and informing affected people.  The administrative load for this process varies from organization to organization, but it is often best handled by a designated data protection officer.

These and other measures all contribute to not only better GDPR compliance, but also to more organized IoT security measures and more robust data management practices overall.  Though there are still many other important IoT factors to consider, establishing key protocols for collaboration, data collection, data storage and data security is a solid start.

To stay up to date on how GDPR affects technology, follow TechGDPR on Twitter.

The post Your IoT Product is Not as GDPR Compliant as You Think appeared first on TechGDPR.

Data and the Problem of Purpose

Few things are likely to make a bigger impact on GDPR compliance than purpose limitation. Purpose limitation refers to one of the principles mentioned in Article 5 of the GDPR. It states that there must be a specific, explicit, and legitimate reason for a processor to collect the personal data of customers.  Additionally, the moment there is no longer a specific, explicit, and legitimate reason for collecting that data, the company is obliged to stop processing it. Designed to promote trust and limit abuse by data processors, this principle represents a sizable effort to protect data subjects. It is also, to the horror of many data-dependent ventures, painfully vague.

Such vague wording is not good news for those fighting to stay afloat in the already hyper-competitive markets for products that rely on what the world increasingly refers to as ‘big’ data. The term Big Data in this sense is used to describe the process of collecting and analyzing vast amounts of data from various sources, including personal data and ‘sensitive data,’ as defined under the GDPR. This, too, is a rather vague definition if you are concerned about compliance, and a definition that will be hard to understand without further legal context – context that will ultimately come from how the GDPR will actually be enforced in the coming months and years.

The Opportunity Cost

In the meantime, the potential costs to innovation in the form of fines on forward-thinking (but non-compliant) tech companies are hard to understate.  Larger still could be the opportunity costs faced by corporations, or even entire economies, if they are not able to realistically capitalize on the innovations that big data enables.  This is especially the case when looking at the advances in productivity that good data analytics can inform. As many already know, big data is regularly used alongside data analytics, which reviews large volumes of data in a short amount of time. Such technology is already helping companies and research institutions around the world make unbelievable gains in terms of the speed and quality of their work. A process that, for obvious reasons, hopefully even the most hawkish regulator would not want to hinder.  

The stakes are also highest for the firms that have been most effective at digging opportunities out of big data and the many technologies that orbit it. Advances in capturing the most value from data analytics have been uneven between public and private institutions – as well as among different industries. Retailers, for example, fare far better than the EU public sector or US healthcare when it comes to making the most out of the data in their possession. This could be in part due to retail’s need to keep up with fickle shoppers and public institutions’ more siloed data between departments, but what is clear is that the institutions that have benefited most from new technology also know that they are the ones who have the most to lose should their use of it be hindered. The cost of a GDPR violation is high enough, but being slowed down by the process of collecting consent from vast numbers of people is no cheap affair either.  

Plenty to collect

Startups, too, with fewer resources for compliance could also suffer. Big corporations may have more numbers to crunch, but they also have more manpower and connections to get them through it. Smaller, more innovative companies are not just trying to keep up with, but redefine marketplaces throughout Europe and beyond. Big data regularly informs the development of better business models, better ad-targeting measures, and various cost-cutting practices throughout an array of industries. The potential cost to nearly every industry as it regards corporate profits is astoundingly high, even for slow adoption, let alone not adopting certain technologies at all. Still, for all of the risks to business that purpose limitation poses, A GDPR-compliant startup or corporate is still in a far better position to seize upon big data’s blooming opportunities than those that are not.

A Data-Driven Path to Compliance

For all of the innovative risks and potential headaches posed by the sometimes clumsy fist of regulatory enforcement, it must be noted that the principle of purpose limitation does not entirely prohibit processing big data. A company can be granted permission to keep doing so, provided it is able to prove that the data being processed is necessary in order to provide a service and that consent has been given regarding its collection. In some cases, authorization from the person giving away their data can ensure that this data may go on being collected, even if the original purpose for its collection is no longer the same as it was in the beginning.

It must also be stated that the purpose limitation will likely do much to help data subjects, so that their personal data is not processed without their explicit consent – But the problems it puts on firms’ backs are not to be underestimated.  Companies that deal with big data analytics must check if the data they process is being processed for the same reason for which it was collected in the first place – No easy task, even for companies with modest amounts of data. If that is not the case, processors must try to get explicit consent from their data subjects, which is also tedious.

Perhaps most important to note is that this process, however painful, also has the potential to inspire more comprehensive regulatory enforcement.  The way in which the GDPR is interpreted and enforced within the sophisticated and ever-changing ecosystem of data-driven business models will certainly evolve. Staying engaged by keeping tabs on advances in technology as they overlap with changes in regulation is especially important. So too is ensuring that you have technical and legal protocols in place to respond to change when it comes.  Taking these and other measures will ensure not only that you reach a reliable level of GDPR compliance, but also remain there.

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