Love.Law.Robots. by Ang Hou Fu

PDPAAmendment2020

Feature image

Regular readers might have noticed the disappearance of articles relating to the Personal Data Protection Commission’s decisions lately. However, as news of the “largest” data breach in Singapore came out, I decided to look into this area again.

My lack of interest paralleled the changing environment, which allowed me to keep up-to-date on them:

  1. The PDPC removed their RSS feed for the latest updates;
  2. I am not allowed to monitor their website manually; and
  3. The PDPC started issuing shorter summaries of their decisions, which makes their work more opaque and less interesting.

Looking at this area again, I wanted to see whether the insights I gleaned from my earlier data project might hold and what would still be relevant going forward.

Data Science with Judgement Data – My PDPC Decisions JourneyAn interesting experiment to apply what I learnt in Data Science to the area of law.Love.Law.Robots.Houfu

Something big struck, well, actually not much.

Photo by Francesca Saraco / Unsplash

The respondent in the case that had attracted media attention is Reddoorz, which operates a hotel booking platform in the budget hotel space. The cause of the breach is as sad as it is unremarkable — they had left the keys to their production database in the code of a disused but still available version of their mobile app. Using those keys, bad actors probably exfiltrated the data. This is yet another example of how lazy practices in developing apps can translate to real-world harm. They even missed the breach when they tried to perform some pen tests because it was old.

PDPC | Breach of the Protection Obligation by CommeasureBreach of the Protection Obligation by CommeasurePDPC LogoRead the PDPC’s enforcement decision here.

The data breach is the “largest” because it involved nearly 6 million customers. Given that the resident population in Singapore is roughly 5.5 million, this probably includes people from around our region.

The PDPC penalised the respondent with a $74,000 fine. This roughly works out to be about 1 cent per person. Even though this is the “largest” data breach handled under the PDPA, the PDPC did not use its full power to issue a penalty of up to $1 million. Under the latest amendments, which have yet to take effect, the potential might of the PDPC can be even greater than that.

The decision states that the PDPC took into account the COVID-19 situation and its impact on the hospitality industry in reducing the penalty amount. It would have been helpful to know how much this factor had reduced the penalty to have an accurate view of it.

In any case, this is consistent with several PDPC decisions. Using the PDPC’s website’s filters, only three decisions doled out more than $75,000 in penalties, and a further 4 doled out more than $50,000. This is among more than 100 decisions with a financial penalty. Even among the rare few cases, only 1 case exercised more than 25% of the current limit of the penalty. The following case only amounts to $120,000 (a high profile health-related case, too!).

The top of the financial penalty list (As of November 2021). Take note of the financial penalty filters at the bottom left corner.

This suggests that the penalties are, in practice, quite limited. What would it take for the PDPC to penalise an offender? Probably not the number of records breached. Maybe public disquiet?

In a world without data breaches

Throttle Roll - Swap Meat MarketPhoto by Parker Burchfield / Unsplash

While the media focuses on financial penalties, I am not a big fan of them.

While doling out “meaningful” penalties strikes a balance between compliance with the law and business interests, there are limits to this approach. As mentioned above, dealing with a risk of $5,000 fines may not be sufficient for a company to hire a team of specialists or even a professional Data Protection Officer. If a company’s best strategy is not to get caught for a penalty, this does not promote compliance with the law at all.

Unfortunately, we don’t live in a world without data breaches. The decisions, including those mentioned above, are filled with human errors. Waiting to get caught for such mistakes is not a responsible strategy. Luckily, the PDPA doesn’t require the organisation to provide bulletproof security measures, only reasonable ones. Then, the crux is figuring out what the PDPC thinks is enough to be reasonable.

So while all these data protection decisions and financial penalties are interesting in showing how others get it wrong, the real gem for the data protection professional in Singapore is finding someone who got it right.

And here’s the gem: Giordano. Now I am sorry I haven’t bought a shirt from them in decades.

There was a data breach, and the suspect was compromised credentials. However, the perpetrator did not get far:

  • The organisation deployed various endpoint solutions
  • The organisation implemented real-time system monitoring of web traffic abnormalities
  • Data was regularly and automatically backed up and encrypted anyway

Kudos to the IT and data protection team!

Compared to other “Not in Breach” decisions, this decision is the only one I know to directly link to one of the many guides made by the PDPC for organisations. “How to Guard Against Common Types of Data Breaches” makes a headline appearance in the Summary when introducing the reasonable measures that Giordano implemented.

The close reference to the guides signals that organisations following them can have a better chance of being in the “No Breach” category.

An approach that promotes best practices is arguably more beneficial to society than one that penalises others for making a mistake. Reasonable industry practices must include encrypting essential data and other recommendations from the PDPC. It would need leaders like Giordano, an otherwise ordinary clothing apparel store in many shopping malls, to make a difference.

A call from the undertaking

Photo by Nicola Fioravanti / Unsplash

The final case in this post isn’t found in the regular enforcement decisions section of the PDPC’s website — undertakings.

If you view a penalty as recognising a failure of data protection and no breach as an indicator of its success, the undertaking is that weird creature in between. It rewards organisations that have the data protection system for taking the initiative to settle with the PDPC early but recognises that there are still gaps in its implementation.

I was excited about undertakings and called them the “teeth of the accountability principle”. However, I haven’t found much substance in my excitement, and the parallel with US anti-corruption practices appears unfounded.

Between February 2021, when the undertaking procedure was given legislative force, and November 2021, 10 organisations spanning different industries went through this procedure. In the meantime, the PDPC delivered 21 decisions with a financial penalty, direction or warning. I reckon roughly 30% is a good indicator that organisations use this procedure when they can.

My beef is that very little information is provided on these undertakings, which appears even shorter than the summaries of enforcement decisions. With very little information, it isn’t clear why these organisations get undertakings rather than penalties.

Take the instant case in November as an example. Do they have superior data protection structures in their organisations? (The organisation didn’t have any and had to undertake to implement something.) Are they all Data Protection Trust Mark organisations? (Answer: No.) Are they minor breaches? (On the surface, I can’t tell. 2,771 users were affected in this case.)

My hunch is that (like the Guide to Active Enforcement says) these organisations voluntarily notified the PDPC with a remediation plan that the PDPC could accept. This is not as easy as it sounds, as you might probably engage lawyers and other professionals to navigate your way to that remediation plan.

With very little media attention and even a separate section away from the good and the ugly on the PDPC’s website, the undertaking is likely to be practically the best way for organisations to deal with the consequences of a data breach. Whether the balance goes too far in shielding organisations from them remains to be seen.

Conclusion

Having peeked back at this area, I am still not sure I like what I find. There was a time when there was excitement about data protection in Singapore, and becoming a professional was seen as a viable place to find employment. It would be fascinating to see how much this industry develops. If it does or it doesn’t, I believe that the actions and the approach of the PDPC to organisations with data breaches would be a fundamental cause.

Until there is information on how many data protection professionals there are in Singapore and what they are doing, I don’t think you will find many more articles in this area on this blog.

#Privacy #PersonalDataProtectionCommission #PersonalDataProtectionAct #Penalties #Undertakings #Benchmarking #DataBreach #DataProtectionOfficer #Enforcement #Law ##PDPAAmendment2020 #PDPC-Decisions #Singapore #Decisions

Author Portrait Love.Law.Robots. – A blog by Ang Hou Fu

Feature image

This post is part of a series relating to the amendments to the Personal Data Protection Act in Singapore in 2020. Check out the main post for more articles!

When the GDPR made its star turn in 2018, the jaw-dropping penalties drew a lot of attention. Up to €20 million, or up to 4% of the annual worldwide turnover of the preceding financial year, whichever is greater , was at stake. Several companies scrambled to get their houses in order. For the most part, the authorities have followed through. We are expecting more too. Is this the same with the Personal Data Protection Act in Singapore too?

Penalties will increase under the latest PDPA amendments.

The financial penalties under Singapore’s Personal Data Protection Act probably garner the most attention. They are still newsworthy even though they have been issued regularly since 2016. The most famous data breach concerning SingHealth resulted in a total penalty of S$1 million. The maximum penalty of $1 million is not negligible. It’s not hypothetical either.

The newest PDPA amendments will now increase the maximum penalty to up to 10% of an organisation’s annual gross turnover in Singapore. To help imagine what this means: According to Singtel’s Annual Report in 2020, operating revenues for Singapore consumers was S$2.11b. The maximum penalty would be at least S$200m.

Is this the harbinger of doom and gloom for local companies? Will local companies scramble to hire personal data specialists like for the GDPR? Will an army of lawyers be groomed to fine-comb previous PDPC decisions to distinguish their clients' cases? Is my CIPP/A finally worth something?

Penalties imposed under the PDPA appear limited.

Before trying to spend on compliance, savvier companies would want to find out more about how the Personal Data Protection Commission enforces the PDPA. This makes sense. The costs of compliance have to be rational in light of the risks. If the dangers of being susceptible to a financial penalty are valued at $5,000, it makes no sense to hire a professional at $80,000 a year. If liability for data breaches is a unique and rare event, hiring a firm of lawyers to defend you in that event is better than hiring a professional every day to prevent it.

So here is the big question: What’s the risk of being penalised $1 million or gasp(!) at least $200 million?

Unfortunately, one does not need a big data science chart to realise that being penalised $1 million is a rare event. Being penalised $100,000 is also a rare event. Using the filters from the PDPC’s decisions database reveals a total of 2 cases with financial penalties greater than $75,000 since 2016.

Screen capture of filters of PDPC decisions with financial penalties of more than $75000. (As of October 2020)

However, if you insist on having a “big data science chart”, here’s one I created anyway:

Histogram of the number of cases binned on enforcement value.

Notes :

  • I excluded the Singhealth penalties ($750K and $250K) because they were outliers.
  • It’s named “enforcement value” and not “penalty sum” because I considered warnings and directions to have $0 as a financial penalty.

The “big data science chart” tells the same story as the PDPC’s website. Most financial penalties fall within the $0 to $35,000 range, with the mean penalty being less than $10,000. While the PDPC certainly has the power to impose a $1 million penalty, it appears to flex around 1% of its capabilities most of the time.

Past performance does not represent future returns. However, the amendments to the PDPA were not supposed to represent a change to the PDPC’s practices. They are for “flexibility” and to match other areas like the Competition Act. There is very little indication that an increase in the financial cap now means that companies will be liable for more.

Why are the penalties so low?

The decisions cite several factors in determining the amount of penalty – the number of individuals affected, the significance of the data lost and even whether the respondent cooperated with the PDPC.

In Horizon Fast Ferry, the PDPC cited the “ICO Guidance on Monetary Penalties” as a principle in determining monetary penalties:

The Commissioner’s underlying objective in imposing a monetary penalty notice is to promote compliance with the DPA or with PECR. The penalty must be sufficiently meaningful to act both as a sanction and also as a deterrent to prevent non-compliance of similar seriousness in the future by the contravening person and by others.

The key phrase in the quote is “sufficiently meaningful”. Given the PDPC’s desire to promote businesses, the PDPC would not like to kill off a company by imposing a crippling penalty. The penalties serve a signalling purpose. As they continue to attract public attention and encourage companies to comply, penalties are the most effective tool in the PDPC’s arsenal.

However, even if the penalties are “sufficiently meaningful” in an objective sense, they may still be meaningless subjectively. $5,000 might be peanuts to a large business. Some businesses may even treat it as a cost of “innovation”. PDPC decisions are replete with “repeat” offenders. Breaking the PDPA, for example, seems to be a habit for Grab.

While doling out “meaningful” penalties strikes a balance between compliance with the law and business interests, there are limits to this approach. As mentioned above, dealing with a risk of $5,000 fines may not be sufficient for a company to hire a team of specialists or even a professional Data Protection Officer. If a company’s best strategy is not to get caught for a penalty, this does not promote compliance with the law at all.

Moving beyond penalties

I am not a fan of financial penalties. I have always viewed them as a “transaction”, so they never really comply with the spirit of compliance.

Asking companies to comply with directions may be far more punishing than doling out a fine. A law firm might help you negotiate the best directions you can get, but the company has to implement them through its employees. The company will need data protection specialists. This approach is more effective than just essentially issuing a company a ticket.

For this reason, I was pretty excited about the PDPC’s Active Enforcement guidelines. Here’s something to watch out for: a new section on undertakings appeared last month.

Conclusion

Still, I am probably an outlier in this regard. The increased penalty cap has repeatedly featured as one of the most critical changes in the PDPA. Experience does not suggest that a higher cap will change much. Nevertheless, as a signal, the news would probably make management sit up and review their data protection policies. Data Protection Officers should take advantage of the new attention to polish up their data protection policies and practices.

This post is part of a series on my Data Science journey with PDPC Decisions. Check it out for more posts on visualisations, natural languge processing, data extraction and processing!

#Privacy #Singapore ##PDPAAmendment2020 #Compliance #DataBreach #DataProtectionOfficer #Decisions #GDPR #Enforcement #Penalties #PersonalDataProtectionAct #PersonalDataProtectionCommission #Undertakings

Author Portrait Love.Law.Robots. – A blog by Ang Hou Fu

Feature image

This post is part of a series relating to the amendments to the Personal Data Protection Act in Singapore in 2020. Check out the main post for more articles!

There’s a new hue to the shift from openness to accountability in the PDPA. We are used to the idea of expecting more from organisations. However, individuals (who aren’t public servants or acting in a personal capacity) who mishandle personal data will be criminally liable under a new section in the upcoming PDPA.

As the PDPC and Ministry puts it, it’s an offence relating to egregious mishandling of personal data. The types of mishandling are:

  1. Knowing or reckless unauthorised disclosure of personal data
  2. Knowing or reckless unauthorised use of personal data for a wrongful gain or a wrongful loss to any person; and
  3. Knowing or reckless unauthorised re-identification of anonymised data.

Anyone convicted of an offence is liable to a fine not exceeding $5,000 or to imprisonment for a term not exceeding two years or both.

Leveling the Public and Private sectors

One of the most controversial areas of the PDPA is the exclusion of the public sector. This can create an impression of differing standards in data protection standards in the public and private sector. In response, the Government has taken steps to level up its data protection.

One of the more aggressive moves by the Government to show its accountability was to enact the Public Sector (Governance) Act. In sections 7 and 8 of the same act, the egregious mishandling of personal data by public servants is also criminalised in very similar terms as the amendments.

As such, the PDPA amendments level the playing field. An employee who egregiously mishandles personal data will also be penalised in the same way, whether he is in the private or public sector. At least in this respect, the differences between the public and private sectors is less pronounced.

The amendments are also essential to plug a hole for companies doing work for the Government. If you mishandle government data, you are liable under the PSGA if you are a public servant. However, non-public servants, such as contractors, are not liable under the PSGA if they mishandle government data. So after the amendments are passed, no one will be left out.

Do employees have anything to fear?

From its inception, the PDPA targets organisations for compliance, not its employees. Section 4(1)(b), which do not impose obligations on the employee, and section 11(2), which states that an organisation is responsible for its personal data, confirms this.

This makes sense. Employees need their employer’s support to carry out the organisation’s data protection obligations. The decisions consistently rebuke the argument that employees did their jobs as the employer ideally expects them to. Employees need practical and relevant training, and they are best provided by the organisation.

Do the amendments mean that employees face more exposure under the revised PDPA? Realistically, the answer is no. The provisions place a very high threshold on the mens rea or mental element of the offence. The offender either did this intentionally or recklessly. Negligent acts are not enough. Furthermore, the use of the information must not be authorised by the company.

As such, the paradigm case for this section is the rogue employee who makes use of the company’s data to make a profit. An employee who ignores data protection training and then commits the mistake training was meant to prevent, may not be criminally liable under this provision. Arguing that such an employee intentionally caused a data breach will be challenging.

Interestingly, we can find this sort of employee in Hazel Florist & Gifts [2017] SGPDPC 9. Even though the employee who caused the data breach refused to attend training or follow SOP, the PDPC still blamed the organisation for failing to make her do so.

Would I use the new criminal liabilities to encourage my colleagues to take data protection seriously? Ultimately, it’s not right to scare people for something unlikely to happen. In any case, the reality is that most employees do want to comply once they have the right tools. When they fail to comply, it's generally because they are not in the right environment, and this environment is completely within the control of the organisation. The “stick” in this case is good but does not seem necessary.

Conclusion

The amendments imposing personal liability on individuals appear to be mainly an effort to align the public officers with other individuals. Like the public sector, liability is narrow and targeted at the most egregious conduct. In that light, the amendments are essential for a consistent regime in the private and public sector.

#Privacy #Singapore ##PDPAAmendment2020 #Employee #Government #PersonalDataProtectionAct

Author Portrait Love.Law.Robots. – A blog by Ang Hou Fu

Feature image

This post is part of a series relating to the amendments to the Personal Data Protection Act in Singapore in 2020. Check out the main post for more articles!

Introduction

The history of data protection legislation, in my view, comprises three generations:

  • The earliest generation focuses on common law and sectoral self-regulation. It’s a bit of the wild west, with various ideas and strands all over the place.
  • The EU’s Data Protection Directive, way back in 1995, represents the next generation. Its key innovation is comprehensive national legislation. Its foundations are based on OECD recommendations and revolve around consent, notification, purpose limitation, etc.
  • The third and latest generation, of course, belongs to the GDPR in 2018. Its key innovations are lawful purposes, protection of children, the right to be forgotten, the right to object to automated processing, etc.

Singapore’s PDPA was enacted in 2012. It sits between the EU’s Data Protection Directive and the GDPR. As such, it retains many well-established and familiar features but very few of the innovations used in the GDPR.

One of these artefacts concerns what the PDPA calls the “consent obligation”. The consent obligation requires the consent of a data object before an organisation can process personal data. Unfortunately, reality does not work out like that. As is consistent with experience, data subjects in Singapore don’t “consent” much substantively, and the exception swallows the rule. Other laws, the exceptions in the schedules of the PDPA and the “reasonable” requirement all qualify the consent obligation.

Instead of looking to the GDPR, the latest amendments to the PDPA “double down” on the consent obligation. Sure, the schedules will undergo some housekeeping and streamlining. Deemed consent is expanded. Two new exceptions are introduced — legitimate interests and business improvement. (Curiously “legitimate interests”; sounds like one of the legal bases in the GDPR.)

Given the Law Reform Committee’s view that the PDPA is sound, the consent obligation will be with us for a long time.

As I showed above, I am not a big fan of this convoluted consent obligation. I like the legal bases of the GDPR more. They are easier to explain, and the exceptions don’t control the rule. By conceding that consent is unable to explain user rights fully, the GDPR accords better to reality.

Nevertheless, I am going to try to explain the Consent Obligation, including the new amendments. So, we are going to play a game! Let’s play “ so you want to collect personal data in Singapore “.

So you want to process personal data Contains all the flowcharts in this post. So you want to process personal data.pdf 217 KB download-circle

Highlights of changes

As I summarized above, there are several new exceptions to the consent obligation. Here are some highlights.

Deemed consent has expanded.

Deemed consent has grown with two new situations. They are expansive and encompass many cases where it’s evident that organisations should have sought consent. The appropriate notification situation also enables organisations to use another method of obtaining consent, which may be considered less confrontational.

A new legitimate interests exception.

The PDPA will also feature a new general exception for legitimate interests. The one in the PDPA looks similar to the one in the GDPR. It also requires organisations to do a cost-benefit analysis in the form of a data protection impact analysis.

Here is another one: using personal data for business improvement. As this only applies to use, you must have collected the personal data through other means. This applies very much to data and customer analytics. You might have already collected data from your customers or operations, and this allows you to make more use of it without worrying about the PDPA.

Conclusion

The changes to the consent obligation are very business-friendly. Should an organisation be excited to employ these exceptions?

If you have been very much at the top of your privacy game, you probably would not need any of these exceptions. Your privacy policy would already have included using personal data for data analytics or business improvement. You would not be needing any “deemed consent” because, in line with best practices, you would have already been upfront and direct with your data subject.

Given the hit or miss nature of PDPC decisions when exceptions are considered, if you can plan for it, you wouldn’t rely on any of these exceptions.

So while it’s heartening to see the movement from openness to accountability, these new changes represent a step back. Hopefully, I wouldn’t need to add several more pages to the next version of my flow chart.

#Privacy #Singapore ##PDPAAmendment2020 #ConsentObligation #GDPR

Author Portrait Love.Law.Robots. – A blog by Ang Hou Fu