Data ProtectionPrivacy

How to maximize the exploitation of data ensuring GDPR compliance?

Data are an incredible resource, but how to exploit them better?

The increase in GDPR fines made exponentially complex for businesses to maximize the profits generated by the exploitation of data, but here are potential options to be considered.

Data is the known as the oil of the future, which makes them even more valuable during a period of considerable energy crisis.

The decision of the ECJ on personal data

The European Court of Justice (ECJ) issued a landmark decision on the definition of personal data.  The ECJ held that a dynamic IP address does not only constitute personal data with respect to the Internet Service Provider (which has the means to link the IP address to the individual behind the address in any case) but also with respect to the operator of a website,

if this website operator has legal means to identify the visitor with the help of additional information from the visitor’s internet service provider.

And this was the case with respect to German law which apparently provides that the website operator can obtain the information required to identify the visitor of the website from the internet provider via a competent authority which requests the information to prepare criminal proceedings, e.g. in the event of cyberattacks.

On the contrary, the definition of personal data does not include data for which the identification of the individual to which it refers is

  • prohibited by law or
  • practically impossible on account of the fact that it requires a disproportionate effort in terms of time, cost and man-power so that the risk of identification appears, in reality, to be insignificant.

How to maximize the exploitation of data in compliance with the GDPR?

The General Data Protection Regulation (GDPR) introduces the concept of “pseudonymisation” which means

the processing of personal data in such a manner that the personal data can no longer be attributed to a specific data subject without the use of additional information, provided that such additional information is kept separately and is subject to technical and organisational measures to ensure that the personal data are not attributed to an identified or identifiable natural person.

The typical example of pseudonymized data relates to patients’ data processed during the course of a clinical trial where a code is attributed to each of them and technical and organizational measures are put in place to avoid the association of collected data to an individual.

In order to clarify the scope of the definition, recital 26 of the EU Privacy Regulation provides that

To determine whether a natural person is identifiable, account should be taken of all the means reasonably likely to be used, such as singling out, either by the controller or by another person to identify the natural person directly or indirectly.

And to ascertain whether means are reasonably likely to be used to identify the natural person, account should be taken of all objective factors, such as the costs of and the amount of time required for identification, taking into consideration the available technology at the time of the processing and technological developments.

Option 1: Anonymise data

In order to maximize the exploitation of data, an option might be to anonymize data.  But, as previously discussed, anonymisation requires a quite burdensome process which is likely to deprive data of any content and information which might have an economic value.  This process would avoid the applicability of data protection laws, but would not grand any actual benefit to businesses.

Option 2: Rely on big data

An alternative option is to rely on the GDPR exceptions to the restrictions applicable to the storage and usage of data when processed for “statistical purposes“, as occurs in the case of big data.  This exception still requires to adopt technical and organizational measure to comply with the principle of “data minimisation” (i.e. only data strictly necessary to achieve the purpose shall be used).  But it is an extremely valuable tool when it comes to the processing of data which do not need to be linked to an individual.

The process of aggregation of data still require a valid legal basis that is likely to be legitimate interest, but – depending on how it is structured – it might enable businesses to maximize the value of data ensuring data protection compliance.

Option 3: Segregated or encrypted data

The definition of pseudonymised data seems to keep within the scope of the definition of personal data also data that is segregated from other data in a manner that prevents the identification of individuals.  However, what if

a privacy by design approach is implemented so that the cost and the amount of time required for identification becomes disproportionate?

The above is valid also in relation to the data whose level of encryption is as such that it is highly unlikely that the processed data can be linked to an individual.

The implementation of the solution above does not just require to keep the data separate, but it requires a privacy impact assessment (and the consequential approval by the data protection authority) of the technology that the company is willing to use and the implementation of a privacy by design approach throughout the whole usage of data.  Indeed, the technological evolution obliges companies to continuously monitor the level of encryption and segregation of data in order to avoid for instance that the development of new technologies makes processed data identifiable.

It seems that the last option is rarely adopted, but might be the best solution to exploit data to their best ensuring data protection compliance.  This is a very hot topic which is particularly relevant for telecom operators as well as any Internet of Things, FinTech and other company which relies on its business on the processing of large amounts of personal data.

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Giulio Coraggio

I am the location head of the Italian Intellectual Property & Technology department and the global co-head of the IoT and Gaming and Gambling groups at the world-leading law firm DLA Piper. IoT and artificial intelligence influencer and FinTech and blockchain expert, finding solutions to what's next for our client's success.

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