Free Practice Questions for IAPP CIPP-E Exam

 Under the GDPR, email marketing requires explicit and unambiguous consent from the recipients, meaning that they must actively agree to receive marketing communications, and the process for obtaining this consent must be clear and transparent. A prior opt-in consent is the most common and reliable way to demonstrate compliance with this requirement, as it involves a positive action from the data subject, such as ticking a box, clicking a button, or filling a form. A pre-checked box, a notice, or an opt-out option are not sufficient to obtain valid consent, as they do not indicate a clear expression of the data subject’s will. However, there is an exception to the consent rule for existing customers, known as the “soft opt-in”. This means that a company can send email marketing messages to its customers without prior consent, if the following conditions are met:

The company obtained the customer’s contact details in the course of a sale or negotiations for a sale of a product or service;

The company only sends marketing messages about its own similar products or services;

The company gives the customer a clear opportunity to opt out of receiving such messages both when first collecting the details and in every subsequent message.

References: GDPR Article 4(11), GDPR Article 6(1)(a), GDPR Article 7, GDPR Recital 32, GDPR Recital 47, GDPR for Marketing: The Definitive Guide for 2023 - SuperOffice, A Guide to GDPR Compliance for Email Marketers in 2023

According to the EDPB Guidelines 8/2022, the lead supervisory authority of a controller is the supervisory authority of the main or single establishment of the controller in the EEA. The main establishment is the place where the controller has its place of central administration in the EEA, unless decisions on the purposes and means of the processing are taken in another establishment in the EEA, and that establishment has the power to implement those decisions. The controller must be able to demonstrate that such an establishment exists. The supervisory authority of the main establishment is the lead supervisory authority, regardless of what the controller has identified as the authority to which data subjects can lodge complaints. Therefore, criterion C is not relevant for identifying the lead supervisory authority of a controller.

References: EDPB Guidelines 8/2022 on identifying a controller or processor’s lead supervisory authority123, paragraphs 19-24.

 According to Article 13 of the GDPR, when personal data are collected from the data subject, the data controller must provide the data subject with the following information, among others1:

The identity and the contact details of the controller and, where applicable, of the controller’s representative;

The contact details of the data protection officer, where applicable;

The purposes of the processing for which the personal data are intended as well as the legal basis for the processing;

The recipients or categories of recipients of the personal data, if any;

Where applicable, the fact that the controller intends to transfer personal data to a third country or international organisation and the existence or absence of an adequacy decision by the Commission, or in the case of transfers referred to in Article 46 or 47, or the second subparagraph of Article 49(1), reference to the appropriate or suitable safeguards and the means by which to obtain a copy of them or where they have been made available.

In the scenario, Wonderkids provides some of this information in their Privacy Statement, but not all. They do not specify the categories of recipients with whom they will share the personal data of their customers and their children. They only state that they will share the data with businesses that they see as adding real value to the customers, which is vague and ambiguous. This does not comply with the GDPR requirement to inform the data subjects about the recipients or categories of recipients of their personal data, if any. Therefore, Wonderkids must provide this additional information in their Privacy Statement.

References:

1: Art. 13 GDPR Information to be provided where personal data are collected from the data subject

The General Data Protection Regulation (GDPR) introduces a mechanism for personal data transfers to third countries or international organisations that do not ensure an adequate level of data protection, based on approved certifications. According to Article 46 of the GDPR, contractual clauses ensuring appropriate data protection safeguards can be used as a ground for data transfers from the EU to third countries. This includes model contract clauses – so-called standard contractual clauses (SCCs) – that have been “pre-approved” by the European Commission.

On 4 June 2021, the Commission issued modernised standard contractual clauses under the GDPR for data transfers from controllers or processors in the EU/EEA (or otherwise subject to the GDPR) to controllers or processors established outside the EU/EEA (and not subject to the GDPR). These modernised SCCs replace the three sets of SCCs that were adopted under the previous Data Protection Directive 95/46. The Commission developed Questions and Answers (Q&As) to provide practical guidance on the use of the SCCs and assist stakeholders in their compliance efforts under the GDPR.

The Q&As state that businesses must do all of the following:

Consider the new optional docking clause, which expressly permits adding new parties to the SCCs. According to the Q&As, the docking clause allows controllers and processors that are not part of the original contract to accede to the SCCs at a later stage, either as data exporters or importers. This clause is intended to facilitate the use of the SCCs in complex processing chains and to avoid the need to enter into multiple contracts.

Migrate all contracts entered into before September 27, 2021, that use the old SCCs to the new SCCs by December 27, 2022. According to the Q&As, the old SCCs will be repealed on September 27, 2021. However, contracts concluded before that date on the basis of the old SCCs will remain valid until December 27, 2022, provided that the processing operations that are the subject matter of the contract remain unchanged and that reliance on those clauses ensures that the transfer of personal data is subject to appropriate safeguards within the meaning of Article 46(1) of the GDPR. After December 27, 2022, the old SCCs will no longer provide a valid legal basis for data transfers to third countries, and the new SCCs will have to be used instead.

Take steps to flow down the new SCCs to relevant parts of their supply chain using the new SCCs as of September 27, 2021, if the business is a data importer. According to the Q&As, the new SCCs require data importers to enter into contracts with any subprocessors that process the personal data transferred under the SCCs, and to include in those contracts the same data protection obligations as those imposed on the data importer under the SCCs. This means that data importers must ensure that the new SCCs are flowed down to their subprocessors as of September 27, 2021, and that any changes in the subprocessors are notified to the data exporter, who has the right to object.

The Q&As do not state that businesses must do the following:

Implement the new SCCs in the U.K. following Brexit, as the U.K. Information Commissioner’s Office does not have the authority to publish its own set of SCCs. This is not a valid statement, as the U.K. has its own data protection regime after leaving the EU, and the U.K. Information Commissioner’s Office (ICO) has the power to issue its own SCCs for data transfers from the U.K. to third countries. According to the ICO website, the ICO is currently developing bespoke U.K. SCCs, which will be subject to a public consultation and an opinion from the European Data Protection Board (EDPB). Until the U.K. SCCs are finalised, the ICO advises businesses to continue to use the EU SCCs for new contracts, as these clauses have been recognised as a valid transfer mechanism under the U.K. data protection law. However, the ICO also warns businesses that they may need to amend the EU SCCs to reflect that the U.K. is no longer an EU member state, and that they will need to update their contracts to the U.K. SCCs once they are available.

References:

GDPR, Articles 3, 4, 28, 29, 32, 44, 45, 46, 47, 48 and 49.

New Standard Contractual Clauses - Questions and Answers overview, paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 and 11.

Standard Contractual Clauses (SCC), paragraphs 1, 2, 3, 4, 5, 6, 7 and 8.

[Using international data transfers], paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10.

According to Article 13 of the GDPR, the controller (in this case, the electricity supplier) has the obligation to provide the data subject (in this case, the customer) with information about the processing of their personal data, including the recipients or categories of recipients of the personal data, if any. However, before providing such information, the controller must verify the identity of the data subject, to ensure that the information is not disclosed to unauthorized persons. This verification can be done by other means than the personal data already collected, such as asking for additional information, sending a verification code, or using a secure online portal. The other options (A, B, and C) are not relevant for this verification, as they do not relate to the identity of the data subject, but to the scope, purpose, and history of the processing. References:

Article 13 of the GDPR

The right to be informed (transparency) (Article 13 & 14 GDPR)

Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation)

According to the CIPP/E study guide, Article 33 of the GDPR requires data controllers to notify the supervisory authority of a personal data breach without undue delay and, where feasible, not later than 72 hours after becoming aware of it, unless the breach is unlikely to result in a risk to the rights and freedoms of natural persons1. Article 34 of the GDPR requires data controllers to communicate the personal data breach to the data subject without undue delay when the breach is likely to result in a high risk to the rights and freedoms of natural persons2. Both articles specify the minimum information that the data controller must provide to the supervisory authority and the data subject, which includes: the nature of the breach, the categories and approximate number of data subjects and personal data records concerned, the name and contact details of the data protection officer or other contact point, the likely consequences of the breach, and the measures taken or proposed to address the breach and mitigate its possible adverse effects12. However, neither article requires the data controller to disclose the type of security safeguards used to protect the data, as this information is not relevant for the purposes of notification and may even compromise the security of the data further3. References: 1: CIPP/E study guide, page 84; Art. 33 GDPR; Guidelines 01/2021 on Examples regarding Data Breach Notification2: CIPP/E study guide, page 85; [Art. 34 GDPR]; Guidelines 01/2021 on Examples regarding Data Breach Notification3: Personal Data Breach | European Data Protection Supervisor; What is a data breach and what do we have to do … - European Commission.

According to the GDPR, the processing of personal data obtained through monitoring software must be lawful, fair, and transparent. This means that the employer must inform the employees about the nature, extent, and reasons for monitoring, and the possible consequences of non-compliance with the company’s policies. The employer must also have a legitimate interest or another lawful basis for processing the employees’ data, and respect their rights and freedoms. The employer must also comply with the national laws and guidelines of each member state where it operates, which may impose additional conditions or limitations on employee monitoring. In this case, Building Block did not inform the employee from Italy that the security software would also monitor his computer activity and location, and did not specify the purpose and scope of such monitoring. Therefore, the employee could not reasonably expect that his personal data would be processed in this way, and could not exercise his rights under the GDPR, such as the right to access, rectify, or object to the processing. Moreover, the employer did not conduct a proper assessment of the necessity and proportionality of the monitoring, and did not consider less intrusive alternatives to achieve its security goals. Therefore, the employer could face legal challenges from the employee, the Italian supervisory authority, or the labor courts, if it decides to apply disciplinary measures based on the data obtained through the monitoring software. The employer could also face fines or sanctions for violating the GDPR and the Italian data protection law. References: GDPR requirements for employee monitoring: rules to follow, Can Your Organisation Monitor Employees’ Personal Communications?, ICO publishes guidance to ensure lawful monitoring in the workplace, [Guidelines on processing personal data in the context of connected vehicles and mobility related applications]

While Company B made several mistakes in handling Company A's employee data, not all of them would likely trigger a potential enforcement action under the GDPR. Here's an analysis of each option:

A. Omission of data protection provisions in the contract with Company C: This is a clear violation of the GDPR. Company B, as the data controller, is responsible for ensuring that any third-party processors comply with data protection requirements. By omitting data protection provisions in the contract, Company B failed to take appropriate steps to ensure the security and privacy of the personal data. This would be a likely trigger for an enforcement action.

B. Failure to provide sufficient security safeguards to Company A's data: This is another violation of the GDPR. Company B has a legal obligation to implement appropriate technical and organizational security measures to protect personal data from unauthorized access, use, disclosure, alteration, or destruction. The outdated IT security system at Company C's U.S. server demonstrates a failure to meet this obligation. This would also be a likely trigger for an enforcement action.

C. Engagement of Company C to improve their payroll service: While outsourcing certain aspects of data processing is permitted under the GDPR, the data controller remains ultimately responsible for compliance. However, simply engaging another company to improve a service itself isn't necessarily a violation. As long as the proper safeguards are in place and the data processing is carried out in accordance with the GDPR, this action alone would not likely trigger an enforcement action.

D. Decision to operate without a data protection officer: The GDPR requires certain organizations to appoint a data protection officer (DPO). While Company B may be required to have a DPO depending on its size and activities, the absence of a DPO wouldn't automatically trigger an enforcement action. However, it could indicate a lack of compliance culture and contribute to other violations, increasing the likelihood of an enforcement action.

Therefore, while Company B made several mistakes, only the ones that directly violate specific data protection requirements, such as omitting data protection provisions in contracts or failing to implement appropriate security measures, are likely to trigger an enforcement action. Engaging a third-party to improve a service, as long as it's done in a compliant manner, isn't a violation in itself.