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French Data Protection Authority (CNIL) Imposes € 50 Million GDPR Sanction on Google

On January 21, 2019, the French Data Protection Authority, the Commission Nationale de L’Informatique et de Libertés (“CNIL”) announced a sanction of 50 million euros against Google.  On May 25 and 28, 2018, the CNIL received complaints from two different associations, asserting that Google did not have a valid legal basis for the processing of personal data of the users of its services, particularly with respect to ad personalization.  The complaints were brought by “None of Your Business”, a nonprofit organization chaired by Max Schrems (yes, that Max Schrems), and “La quadrature du Net”, a French digital rights advocacy group. The decision is significant for at least two reasons: (1) because it reveals CNIL’s analysis in how it was permitted to issue the decision and sanction despite Google’s European headquarters and (2) because it is the first time the CNIL has leveraged its new powers under GPDR to issue a sanction greater than its € 20 million pre-GDPR limits.

Coordination of Enforcement

The GDPR establishes a “one stop shop mechanism”, providing that an organization with a main establishment in the European Union shall have only one interlocutor, the Data Protection Authority (“DPA”) in the country where its main establishment is located, which shall serve as the “lead authority”.  In Google’s case, their European headquarters is in Ireland.  The lead authority must coordinate the cooperation between the other DPAs before taking any decision about cross-border processing carried out by the company. The CNIL cited the definition of “main establishment” in Article 4(16)(a):  “as regards a controller with establishments in more than one Member State, the place of its central administration in the Union, unless the decisions on the purposes and means of the processing of personal data are taken in another establishment of the controller in the Union and the latter establishment has the power to have such decisions implemented, in which case the establishment having taken such decisions is to be considered to be the main establishment …”.  It then discussed several elements of Google’s European headquarters in Ireland,

After lengthy discussion, the CNIL concluded that the restricted training taking place at Google’s European headquarters reveals that it could not be considered as a main establishment within the meaning of Article 4(16) when it is not established that the Ireland headquarters had decision making power as to privacy policies presented to the user during the creation of this account during the configuration of the Android mobile phone.  In the absence of a main establishment, therefore, the CNIL was competent to initiate this procedure and to exercise its powers. The CNIL therefore asserted authority to make decision regarding Google’s processing operations, and implemented the new European framework interested by all European authorities in the EDPB’s guidelines.

CNIL’s restricted committee carried out online inspections in September 2018 to verify the compliance of the processing operations implemented by Google with the French Data Protection Act and the GDPR by analyzing the browsing pattern of a user and the documents he or she can have access to when creating a Google account during the configuration of Android mobile equipment. On the basis of its inspections, the CNIL’s restricted committee observed two types of breaches of the GPDR.

Violation of Transparency and Information.

First, the CNIL noticed that the information provided by Google was not easily accessible for users:

“Essential information, such as the data processing purposes, the data storage periods or the categories of personal data used for the ads personalization, are excessively disseminated across several documents, with buttons and links on which it is required to click to access complementary information. The relevant information is accessible after several steps only, implying sometimes up to 5 or 6 actions. For instance, this is the case when a user wants to have complete information on his or her data collected for the personalization purposes or for the geo-tracking service.”

The restricted committee also observed that some information is not always clear or comprehensive:

“Users are not able to fully understand the extent of the processing operations carried out by Google. But the processing operations are particularly massive and intrusive because of the number of services offered (about twenty), and the amount and the nature of the data processed and combined. The restricted committee observe[d] in particular that the purposes of processing are described in a too generic and vague manner, and so are the categories of data processed for these various purposes. Similarly, the information communicated is not clear enough so that the user can understand that the legal basis of processing operations for the ads personalization is the consent, and not the legitimate interest of the company. Finally, the restricted committee notices that the information about the retention period is not provided for some data.”

Violation of the obligation to have a Legal Basis for ads Personalization Processing.

Although Google stated that it obtained user consent to process data for ads personalization purposes, the committee considered that the consent was not validly obtained for two reasons:

“First, the restricted committee observed that the users’ consent was not sufficiently informed.   The information on processing operations for the ads personalization is diluted in several documents and does not enable the user to be aware of their extent. For example, in the section “Ads Personalization”, it is not possible to be aware of the plurality of services, websites and applications involved in these processing operations (Google search, You tube, Google home, Google maps, Playstore, Google pictures…) and therefore of the amount of data processed and combined.”

Second, the committee observed that consent collected by Google was neither “specific” nor “unambiguous”.  Admittedly, when a user creates an account he or she can modify some account options by clicking on the button <<More options>>, accessible above the button <<Create Account>>.  It is notably possible to configure the display of personalized ads.  However, the use not only has to click on <<More options>> to access the configuration, but the display of ads personalization is pre-checked. However, the GDPR requires that consent is “unambiguous” only with a clear affirmative action from the user (e.g., opting in by ticking a non-pre-ticked box for instance, as opposed to opting out by clearing a pre-ticked box). Finally, before creating an account, the user is asked to tick the boxes << I agree to Google’s Terms of Service>> and “I agree to the processing of my information as described above and further explained in the Privacy Policy” in order to create the account.  In other words, the user gives his or her consent in full for all of the processing operations purposes carried by Google based on this consent (e.g., ads personalization, speech recognition, etc.). However, GDPR requires that consent is “specific” only if it is given distinctly for each purpose.

Sanctions.

As a result of its findings, the committee publicly imposed a financial penalty of 50 million euros against Google, representing the first time that the CNIL applied the new sanction limits provided by the GDPR.  CNIL stated that the amount and publicity of the sanction was “justified by the severity of the infringements observed regarding the essential principles of the GDPR:  transparency, information, and consent.”

Despite the measures implemented by Google (documentation and configuration tools), CNIL stated that the infringements observed “deprive the users of essential guarantees regarding processing operations that can reveal important parts of their private life since they are based on a huge amount of data, a wide variety of services, and almost unlimited possible combinations.”  The committee recalled that the extent of the processing operations in question “imposes to enable the users to control their data and therefore to sufficiently inform them and allow them to validly consent.”  Moreover, the committee, stated, the violations were continuous breaches of the regulation as they are still observed to date; it Is not a one-off, time-limited infringement.  The CNIL also noted the important place the Android operating system has on the French market, with thousands of French citizens creating Google accounts everyday when using their smartphone. Finally, the restricted committee points out that the economic model of the company is partly based on the ads personalization.

Google Response.

In a statement obtained by ABC News, a Google spokesperson said the company is “studying the decision” to determine its next steps:

“People expect high standards of transparency and control from us. We’re deeply committed to meeting those expectations and the consent requirements of the GDPR. We’re studying the decision to determine our next steps.”