EU privacy law heralds new era in online data protection

The European Union General Data Protection Regulation, which came into effect on May 25, updates the bloc's rules on data privacy for big data era. (Getty)
Updated 25 May 2018
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EU privacy law heralds new era in online data protection

  • Extensive new privacy regulations halied by privacy advocates worldwide
  • But critics say rules create a burden for small businesses, with advertisers and publishers impacted

BRUSSELS: New European privacy regulations that went into effect on Friday will force companies to be more attentive to how they handle customer data, while bringing consumers both new ways to control their data and tougher enforcement of existing privacy rights.
The European Union General Data Protection Regulation (GDPR) replaces the bloc’s patchwork of rules dating back to 1995 and heralds an era where breaking privacy laws can fetch fines of up to 4 percent of global revenue or €20 million ($23.48 million), whichever is higher, as opposed to a few hundred thousand euros.
Many privacy advocates around the world have hailed the new law as a model for personal data protection in the Internet era and called on other countries to follow the European model.
Critics, though, say the new rules are overly burdensome, especially for small businesses, while advertisers and publishers worry it will make it harder for them to find customers.
The GDPR clarifies and strengthens existing individual privacy rights, such as the right to have one’s data erased and the right to ask a company for a copy of one’s data.
But it also includes entirely new mandates, such as the right to transfer one’s data from one service provider to another and the right to restrict companies from using personal data.
“If you compare the GDPR with the data protection directive you can really compare it with a piece of software upgrading from 1.0 to 2.0,” said Patrick Van Eecke, partner at law firm DLA Piper.
“It’s a gradual and not a revolutionary kind of thing ... However for many companies it was a huge wakeup call because they never did their homework. They never took the data protection directive seriously.”
Activists are already planning to leverage the right to access one’s data to turn the tables on large Internet platforms whose business model relies on processing people’s personal information.
That means companies are having to put in place processes for dealing with such requests and educating their workforce because any non-compliance could lead to stiff sanctions.
Studies suggest that many companies are not ready for the new rules.
The International Association of Privacy Professionals found that only 40 percent of companies affected by the GDPR expected to be fully compliant by yesterday’s deadline.
It is unclear how many provisions of GDPR will be interpreted and enforced. A patchwork of European regulatory authorities, many of whom say they are under-funded, will oversee the new law, with a central body to resolve conflicts.
One key provision of GDPR, the right to data portability, is causing particular confusion.
Lawyers and experts say it is not clear how far the right for individuals to move their data from one service provider to another will stretch.
“I think the data portability rights are pretty significant and are going to take a while for people to figure out what the bounds of them are and how to go about complying with them,” said David Hoffman, Director of Security Policy and Global Privacy Officer at Intel.
For example, music streaming services like Spotify create playlists for users based on their music preferences. While a user seeking to exercise the data portability right would be able to move playlists he or she created, the situation becomes fuzzy if the playlists are created by the streaming service using algorithms.
EU data protection authorities said individuals should be able to transfer data provided by them but not “derived data” created by the service provider such as algorithmic results.
Tanguy Van Overstraeten of Linklaters said the data portability right could raise issues of intellectual property.
“It’s not obvious that you can necessarily migrate the data from your system to somebody else’s system,” he said.
On the business side, companies are rushing to renegotiate contracts with suppliers and service providers because GDPR increases their liability if something goes wrong.
Under the current rules it is generally the company that determines the purposes of data collection that is directly liable for any breaches.
GDPR changes that, and data processors which only process or store the data on behalf of their clients, for example cloud computing providers, will be directly liable for sanctions and could face lawsuits from individuals, and that needs to be reflected in contracts.
Companies can have hundreds, thousands or tens of thousands of agreements which need to be revisited to ensure they comply with GDPR.
“After 20 years of data protection legislation in place, it’s only now with the GDPR they (companies) start to think about ‘what’s my role in the whole story? Am I a data controller or data processor?’” Van Eecke said.


Meet the Dubai ad men who pay you to sit in traffic

Updated 20 August 2018
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Meet the Dubai ad men who pay you to sit in traffic

  • Blockchain technology challenges traditional outdoor media
  • Adverts connect to driver mobile phone

LONDON: A new startup founded by UAE-based entrepreneurs is in the process of test-running a blockchain-based technology that could help people turn their cars into mobile advertising vehicles.
It could challenge the use of traditional advertising methods such as outdoor billboards, the founders of The Elo Network claim.
The platform — which has been set up by Mohammed Khammas and Mohammed Bafaqih and incorporated in the Cayman Islands — will enable people to be paid for displaying adverts on the side or back of their vehicles while they go about their daily routines of driving to work, the mall or doing the school run.
The adverts will feature low-frequency bluetooth ‘beacons’ that connect to the drivers' mobile phone which will be able to monitor when the driver is in the car and where the car is being driven.
There is a minimum threshold for the number of miles being driven a day, but the main prerequisite is that the driver is in the car. Drivers will still be paid even if stuck in a traffic jam.
Advertising clients will be able to put out requests that drivers head to a particular area — for instance to be close to a new brand launch — with drivers being paid up to 4 or 5 times more than their standard rate if they accept.
While the concept of paying people to use their cars for advertising is not new, it is the use of blockchain technology that will make The Elo Network particularly grounding-breaking in the advertising world, its founders said.
“Billboards are very expensive and static and don’t give you the KPIs and insightful information that brands want these days. You solve that by getting them that data,” Bafaqih said.
The Elo Network collates detailed data by tracking the movements of the drivers and their day-to-day activities. Data points such as a particular area’s population density can been collected.
The information will be encrypted ensuring that the brand will never know the identity of the driver, said Bafaqih.
“It creates data sets that didn’t exist before. You don’t have to worry about privacy but at the same time the brand can know about your patterns. They can know where you go in mornings, where you drive, what normal patterns are created in certain areas and countries,” he said.
This level of detail is increasingly important for brands looking to run targeted campaigns, and it is something that traditional billboards are unable to offer.
The technology will also be used to overcome the payment problems that other similar car advertising schemes have faced.
“Historically what happens, where there is a authority that is issuing payments, it causes a lot of problems. There can be disputes on how much they (the drivers) are owed or how many miles were driven or what campaign someone has done,” he said.
Under the Elo Network program, the blockchain technology allows you to create so-called “Smart Contracts” — which is a software protocol that enforces and verifies the performance of a contract.
“It says driver A is going to be paid — for example — a dollar per mile — so as the person drives he starts receives ‘IOUs’. Those IOUs are convertible at any time,” he said.
With no ‘middle man’ involved, the driver is able to redeem their IOUs and get paid as and when they want.
The network is currently at ‘proof of concept’ stage and is test-running the platform with a number of brands. It is anticipated that the network will be rolled out to the public toward the end of this year and early 2019.