The GDPR requires that in the case of a personal data breach, the controller shall without undue delay and, where feasible, not later than 72 hours after having become aware of it, notify the personal data breach to the supervisory authority competent in accordance with Article 55, unless the personal data breach is unlikely to result in a risk to the rights and freedoms of natural persons1. A personal data breach means a breach of security leading to the accidental or unlawful destruction, loss, alteration, unauthorised disclosure of, or access to, personal data transmitted, stored or otherwise processed2. In this scenario, the company ABCD is the controller of the client data, and the loss of the memory stick containing unencrypted and clear text personal data is a personal data breach that may pose a risk to the rights and freedoms of the data subjects, such as identity theft, fraud, financial loss, or reputational damage. Therefore, the company ABCD should notify the data protection supervisory authority as soon as possible, and provide the information specified in Article 33(3) of the GDPR, such as the nature of the breach, the categories and number of data subjects and personal data records concerned, the likely consequences of the breach, and the measures taken or proposed to address the breach1. Option A is the correct answer, as it reflects the obligation of the controller under the GDPR. Options B, C and D are incorrect, as they do not comply with the GDPR requirements. Option B would delay the notification beyond the 72-hour deadline, which could result in administrative fines or other sanctions3. Option C would misuse the “disproportionate effort” exception, which only applies to the communication of the breach to the data subjects, not to the notification to the supervisory authority, and only when the controller has implemented appropriate technical and organisational protection measures, such as encryption, that render the personal data unintelligible to any person who is not authorised to access it4. Option D would prematurely notify the customers of the company without first notifying the supervisory authority, and without assessing the level of risk and the necessity of such communication, which should be done in consultation with the supervisory authority5. References: 1: Article 33(1) of the GDPR 2: Article 4(12) of the GDPR 3: Article 83(4)(a) of the GDPR 4: Article 34(3)(a) of the GDPR 5: Article 34(1) and (2) of the GDPR

 This is not an explicit right granted to data subjects under the GDPR, as the GDPR does not specifically address the sale of personal data. However, the GDPR does require that data subjects give their consent to any processing of their personal data that is not based on another legal basis, such as a contract or a legal obligation1. Therefore, data subjects have the right to withdraw their consent at any time, and the controller must inform them of this right before obtaining their consent2. The other options are explicit rights granted to data subjects under the GDPR, as they are listed in Chapter 3 of the regulation3. References:

Free CIPP/E Study Guide, page 23, section 3.1

CIPP/E Certification, page 18, section 3.1

The Ultimate CIPP/E Study Guide for 2023, page 16, section 3.1

GDPR data subject rights - 8 fundamental & additional rights, paragraph 4

Rights of the data subject - General Data Protection Regulation (GDPR), Article 7

Rights of the data subject - General Data Protection Regulation (GDPR), Chapter 3

According to Article 32 of the GDPR, the controller and the processor must implement appropriate technical and organisational measures to ensure a level of security appropriate to the risk of processing personal data, taking into account the state of the art, the costs of implementation, and the nature, scope, context and purposes of processing, as well as the risk of varying likelihood and severity for the rights and freedoms of natural persons. The GDPR also provides some examples of such measures, including the pseudonymisation and encryption of personal data, the ability to ensure the ongoing confidentiality, integrity, availability and resilience of processing systems and services, the ability to restore the availability and access to personal data in a timely manner in the event of a physical or technical incident, and a process for regularly testing, assessing and evaluating the effectiveness of technical and organisational measures for ensuring the security of the processing.

In this scenario, the company is processing personal data of children, such as their voice, questions, preferences, and location, through the connected toys that use a wireless Bluetooth connection to communicate with smartphones, tablets, cloud servers, and other toys. This poses a high risk to the security of the data, as Bluetooth is a short-range wireless technology that can be easily intercepted, hacked, or compromised by malicious actors. Therefore, the company should encrypt the data in transit over the Bluetooth connection, to prevent unauthorized access, disclosure, or alteration of the data. Encryption is a process of transforming data into an unreadable form, using a secret key or algorithm, that can only be reversed by authorized parties who have the corresponding key or algorithm. Encryption can protect the data from being accessed or modified by anyone who does not have the key or algorithm, thus ensuring the confidentiality and integrity of the data.

The other options are incorrect because:

B. Including dual-factor authentication before each use by a child in order to ensure a minimum amount of security is not a sufficient measure to protect the data in transit over the Bluetooth connection. Dual-factor authentication is a process of verifying the identity of a user by requiring two pieces of evidence, such as a password and a code sent to a phone or email. While this may enhance the security of the user’s account or device, it does not protect the data that is transmitted over the wireless connection, which can still be intercepted, hacked, or compromised by malicious actors. Moreover, dual-factor authentication may not be suitable or convenient for children, who may not have access to a phone or email, or who may forget their passwords or codes.

C. Including three-factor authentication before each use by a child in order to ensure the best level of security possible is not a necessary or proportionate measure to protect the data in transit over the Bluetooth connection. Three-factor authentication is a process of verifying the identity of a user by requiring three pieces of evidence, such as a password, a code sent to a phone or email, and a biometric feature, such as a fingerprint or a face scan. While this may provide a high level of security for the user’s account or device, it does not protect the data that is transmitted over the wireless connection, which can still be intercepted, hacked, or compromised by malicious actors. Furthermore, three-factor authentication may not be appropriate or feasible for children, who may not have access to a phone or email, or who may not have reliable biometric features, or who may find the process too complex or cumbersome.

D. Inserting contractual clauses into the contract between the toy manufacturer and the cloud service provider, since South Africa is outside the European Union, is not a relevant measure to protect the data in transit over the Bluetooth connection. Contractual clauses are legal agreements that specify the obligations and responsibilities of the parties involved in a data transfer, such as the level of data protection, the rights of data subjects, and the remedies for breaches. While contractual clauses may be necessary to ensure the compliance of the data transfer to South Africa, which is a non-EU country that does not have an adequacy decision from the European Commission, they do not address the security of the data that is transmitted over the wireless connection, which can still be intercepted, hacked, or compromised by malicious actors. Moreover, contractual clauses are not a technical or organisational measure, but a legal measure, that falls under a different provision of the GDPR, namely Article 46.

References: Article 32 and Recitals (75), (76), (78), (83), and (85) of the GDPR, Security of processing, Encryption, Authentication, [Contractual clauses]

A DPIA is not a one-time activity. While it's crucial to conduct a DPIA before implementing a new system that processes personal data (like the fingerprint system), the GDPR requires organizations to review and update their DPIAs periodically, especially when there are changes that might affect the risk to data subjects.

Here's why the other options are incorrect:

A. After the complaint of the supporter: While a complaint might trigger a review of the processing, the DPIA should have been done proactively before any issues arose.

C. At the end of every match of the season: This frequency is excessive and doesn't align with the idea of assessing risks when changes occur.

D. After the AEPD notification of the investigation: Similar to option A, this is reactive rather than proactive.

References:

GDPR Article 35 - Data protection impact assessment

IAPP CIPP/E textbook, Chapter 4: Accountability and Data Governance (specifically, sections on DPIAs and ongoing review)

WP29 Guidelines on Data Protection Impact Assessment (DPIA)

The General Data Protection Regulation (GDPR) does not prohibit surveillance of employees in the workplace. Still, it requires employers to follow special rules to ensure that the rights and freedoms of employees are protected when processing their personal data. The GDPR applies to any processing of personal data in the context of the activities of an establishment of a controller or a processor in the EU, regardless of whether the processing takes place in the EU or not. The GDPR also applies to the processing of personal data of data subjects who are in the EU by a controller or processor not established in the EU, where the processing activities are related to the offering of goods or services to data subjects in the EU or the monitoring of their behaviour as far as their behaviour takes place within the EU.

The GDPR requires that any processing of personal data must be lawful, fair and transparent, and based on one of the six legal grounds specified in the regulation. The most relevant legal grounds for employee surveillance are the legitimate interests of the employer, the performance of a contract with the employee, or the compliance with a legal obligation. The GDPR also requires that any processing of personal data must be limited to what is necessary for the purposes for which they are processed, and that the data subjects must be informed of the purposes and the legal basis of the processing, as well as their rights and the safeguards in place to protect their data.

The GDPR also imposes specific obligations and restrictions on the processing of special categories of personal data, such as biometric data, which reveal racial or ethnic origin, political opinions, religious or philosophical beliefs, or trade union membership, or which are processed for the purpose of uniquely identifying a natural person. The processing of such data is prohibited, unless one of the ten exceptions listed in the regulation applies. The most relevant exceptions for employee surveillance are the explicit consent of the data subject, the necessity for the purposes of carrying out the obligations and exercising specific rights of the controller or of the data subject in the field of employment and social security and social protection law, or the necessity for reasons of substantial public interest.

The GDPR also sets out the rules and requirements for the transfer of personal data to third countries or international organisations, which do not ensure an adequate level of data protection. The transfer of such data is only allowed if the controller or processor has provided appropriate safeguards, such as binding corporate rules, standard contractual clauses, codes of conduct or certification mechanisms, and if the data subjects have enforceable rights and effective legal remedies.

Based on the scenario, the primary privacy risks of the planned surveillance system are the excessive scope of monitoring and the lack of legitimate purpose for data collection. The surveillance system involves the collection and processing of a large amount of personal data, including special categories of personal data, such as biometric data and data revealing political opinions or trade union membership, from the employees’ devices and communications. The surveillance system also involves the transfer of personal data to a third country, China, which does not provide an adequate level of data protection. The surveillance system does not seem to have a clear and specific purpose that is necessary and proportionate to the legitimate interests of the employer, such as preventing fraud, ensuring network security, or complying with legal obligations. The surveillance system also does not seem to respect the principles of data minimisation, purpose limitation, transparency, and accountability. The surveillance system may infringe the rights and freedoms of the employees, such as the right to privacy, the right to data protection, the right to non-discrimination, the right to dignity, and the right to freedom of expression and association.

References:

GDPR, Articles 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 44, 45, 46, 47, 48, and 49.

EDPB Guidelines 3/2019 on processing of personal data through video devices, pages 5, 6, 7, 8, 9, 10, 11, 12, 13, and 14.

EDPB Guidelines 07/2020 on the concepts of controller and processor in the GDPR, pages 19, 20, 21, 22, 23, 24, 25, 26, 27, and 28.

EDPB Guidelines 4/2019 on Article 25 Data Protection by Design and by Default, pages 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, and 28.

EDPB Guidelines 2/2018 on derogations of Article 49 under Regulation 2016/679, pages 4, 5, 6, 7, 8, 9, 10, 11, and 12.

Data protection: GDPR and employee surveilance | Feature | Law Gazette, paragraphs 1, 2, 3, 4, 5, 6, 7, and 8.

cloud computing services are defined as the on-demand availability of computing resources (such as storage and infrastructure), as services over the internet. Cloud computing services share certain characteristics, such as on-demand self-service, broad network access, resource pooling, rapid elasticity, measured service, multi-tenancy, virtualization, resilient computing, flexible pricing models, security, automation, and sustainability234.

One of the characteristics that is not recognized as a common characteristic of cloud computing services is that the supplier assumes the vendor’s business risk associated with data processed by the supplier. This is not a characteristic of cloud computing services, but rather a contractual or legal issue that depends on the agreement between the supplier and the vendor. The supplier and the vendor may have different roles and responsibilities regarding the data processed by the supplier, such as controller, processor, or sub-processor, and they may have different obligations and liabilities under the applicable data protection laws, such as the GDPR. Therefore, the supplier does not necessarily assume the vendor’s business risk associated with data processed by the supplier, unless it is explicitly agreed by the parties or required by the law.

 The accountability principle found in Article 5, Section 2 of the GDPR requires data controllers to take responsibility for complying with the GDPR and to be able to demonstrate their compliance1. This means that data controllers must implement appropriate technical and organisational measures to ensure and show that they process personal data in accordance with the GDPR2. One of the measures that can demonstrate compliance with the accountability principle is conducting regular audits of the data protection program. Audits are systematic and independent assessments of the data processing activities and the data protection policies and procedures of an organisation3. They can help to identify and address any gaps or risks in the data protection program, as well as to verify the effectiveness and efficiency of the data protection measures3. Audits can also provide evidence of compliance to the supervisory authorities and the data subjects, as well as to enhance the trust and reputation of the organisation3. Therefore, conducting regular audits of the data protection program is a way to demonstrate compliance with the accountability principle. References: 1: CIPP/E study guide, page 15; Art. 5 GDPR; Accountability principle | ICO2: CIPP/E study guide, page 16; Art. 24 GDPR; [Guide to accountability and governance | ICO]3: CIPP/E study guide, page 91; [Auditing | ICO]; [GDPR Audits: What You Need to Know - IT Governance Blog].

Ben’s collection of additional data from customers, especially sensitive data such as philosophical beliefs and political opinions, created several potential issues for the company, such as:

The risk of violating the data minimization principle, which requires that personal data collected must be adequate, relevant and limited to what is necessary for the purposes of the processing1.

The risk of infringing the rights and freedoms of the data subjects, who may not be aware of or consent to the secondary use of their data by Ben Knows Best, or the unauthorized access and copying of their data by Sam.

The risk of non-compliance with the GDPR’s requirements for processing special categories of data, which include data revealing philosophical beliefs and political opinions. Such data can only be processed under certain conditions, such as explicit consent, substantial public interest, or legal claims2.

The risk of data breaches or losses, as the data is transferred to a separate database, copied by Sam, and stored on the company’s servers in Vermont, which may not have adequate security measures or safeguards.

Therefore, the company would most likely require a data protection impact assessment (DPIA) to identify and mitigate these risks. A DPIA is a process that helps assess the impact of the envisaged processing operations on the protection of personal data, and consult with the supervisory authority if the DPIA indicates that the processing would result in a high risk in the absence of measures taken by the controller to mitigate the risk3. The other options are not necessarily required by the GDPR, although they may be good practices or contractual terms. References:

Free CIPP/E Study Guide, page 32, section 4.1.2

CIPP/E Certification, page 27, section 4.1.2

The Ultimate CIPP/E Study Guide for 2023, page 36, section 4.1.2

Principles - General Data Protection Regulation (GDPR), Article 5

Special categories of personal data - General Data Protection Regulation (GDPR), Article 9

Data protection impact assessment - General Data Protection Regulation (GDPR), Article 35