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Certified Information Privacy Professional/Europe (CIPP/E) Questions and Answers

Question 37

SCENARIO

Please use the following to answer the next question:

Joe started the Gummy Bear Company in 2000 from his home in Vermont, USA. Today, it is a multi-billion-dollar candy company operating in every continent. All of the company’s IT servers are located in Vermont. This year Joe hires his son Ben to join the company and head up Project Big, which is a major marketing strategy to triple gross revenue in just 5 years. Ben graduated with a PhD in computer software from a top university. Ben decided to join his father’s company, but is also secretly working on launching a new global online dating website company called Ben Knows Best.

Ben is aware that the Gummy Bear Company has millions of customers and believes that many of them might also be interested in finding their perfect match. For Project Big, Ben redesigns the company’s online web portal and requires customers in the European Union and elsewhere to provide additional personal information in order to remain a customer. Project Ben begins collecting data about customers’ philosophical beliefs, political opinions and marital status.

If a customer identifies as single, Ben then copies all of that customer’s personal data onto a separate database for Ben Knows Best. Ben believes that he is not doing anything wrong, because he explicitly asks each customer to give their consent by requiring them to check a box before accepting their information. As Project Big is an important project, the company also hires a first year college student named Sam, who is studying computer science to help Ben out.

Ben calls out and Sam comes across the Ben Knows Best database. Sam is planning on going to Ireland over Spring Beak with 10 of his friends, so he copies all of the customer information of people that reside in Ireland so that he and his friends can contact people when they are in Ireland.

Joe also hires his best friend’s daughter, Alice, who just graduated from law school in the U.S., to be the company’s new General Counsel. Alice has heard about the GDPR, so she does some research on it. Alice approaches Joe and informs him that she has drafted up Binding Corporate Rules for everyone in the company to follow, as it is important for the company to have in place a legal mechanism to transfer data internally from the company’s operations in the European Union to the U.S.

Joe believes that Alice is doing a great job, and informs her that she will also be in-charge of handling a major lawsuit that has been brought against the company in federal court in the U.S. To prepare for the lawsuit, Alice instructs the company’s IT department to make copies of the computer hard drives from the entire global sales team, including the European Union, and send everything to her so that she can review everyone’s information. Alice believes that Joe will be happy that she did the first level review, as it will save the company a lot of money that would otherwise be paid to its outside law firm.

In preparing the company for its impending lawsuit, Alice’s instruction to the company’s IT Department violated Article 5 of the GDPR because the company failed to first do what?

Options:

Send out consent forms to all of its employees.

Minimize the amount of data collected for the lawsuit.

Inform all of its employees about the lawsuit.

Encrypt the data from all of its employees.

Question 38

SCENARIO

Please use the following to answer the next question:

ABC Hotel Chain and XYZ Travel Agency are U.S.-based multinational companies. They use an internet-based common platform for collecting and sharing their customer data with each other, in order to integrate their marketing efforts. Additionally, they agree on the data to be stored, how reservations will be booked and confirmed, and who has access to the stored data.

Mike, an EU resident, has booked travel itineraries in the past through XYZ Travel Agency to stay at ABC Hotel Chain’s locations. XYZ Travel Agency offers a rewards program that allows customers to sign up to accumulate points that can later be redeemed for free travel. Mike has signed the agreement to be a rewards program member.

Now Mike wants to know what personal information the company holds about him. He sends an email requesting access to his data, in order to exercise what he believes are his data subject rights.

What is the time period in which Mike should receive a response to his request?

Options:

Not more than one month of receipt of Mike’s request.

Not more than two months after verifying Mike’s identity.

When all the information about Mike has been collected.

Not more than thirty days after submission of Mike’s request.

Answer:

Explanation:

According to the GDPR, the right of access by the data subject is one of the rights granted to individuals to obtain information about the processing of their personal data by a data controller1. The data controller must provide a copy of the personal data undergoing processing and additional information, such as the purposes, the categories, the recipients, the retention period, the rights, the source, and the automated decision-making of the processing1. The data controller must also inform the data subject of the existence of the right to access and the means to exercise it2.

The GDPR also specifies the time limit for responding to a data subject access request. The data controller must provide the information without undue delay and in any event within one month of receipt of the request1. This period may be extended by two further months where necessary, taking into account the complexity and number of the requests, but the data controller must inform the data subject of any such extension within one month of receipt of the request, together with the reasons for the delay1. The data controller must also verify the identity of the data subject before providing the information, but this verification should not extend the time limit for responding to the request3.

In this scenario, Mike is an EU resident who has booked travel itineraries through XYZ Travel Agency and stayed at ABC Hotel Chain’s locations. Both companies are U.S.-based multinational companies that use a common platform for collecting and sharing their customer data. Mike has signed the agreement to be a rewards program member of XYZ Travel Agency. Mike wants to know what personal information the company holds about him and sends an email requesting access to his data.

Assuming that both companies are subject to the GDPR, either because they offer goods or services to individuals in the EU or because they monitor the behavior of individuals in the EU4, they must comply with the right of access by the data subject and provide Mike with the information he requests. The time period in which Mike should receive a response to his request is not more than one month of receipt of his request, unless there are grounds for extending the period by two further months. The companies must also verify Mike’s identity before providing the information, but this verification should not affect the time limit for responding to the request.

Therefore, the correct answer is A. Not more than one month of receipt of Mike’s request.

References: 1 Article 15 of the GDPR2 Article 13 and 14 of the GDPR3 Guidelines on the right to data portability | European Data Protection Board34 Article 3 of the GDPR.

Question 39

SCENARIO

Please use the following to answer the next question:

Financially, it has been a very good year at ARRA Hotels: Their 21 hotels, located in

Greece (5), Italy (15) and Spain (1), have registered their most profitable results

ever. To celebrate this achievement, ARRA Hotels' Human Resources office, based

in ARRA's main Italian establishment, has organized a team event for its 420

employees and their families at its hotel in Spain.

Upon arrival at the hotel, each employee and family member is given an electronic

wristband at the reception desk. The wristband serves a number of functions:

. Allows access to the "party zone" of the hotel, and emits a buzz if the user

approaches any unauthorized areas

. Allows up to three free drinks for each person of legal age, and emits a

buzz once this limit has been reached

. Grants a unique ID number for participating in the games and contests that

have been planned.

Along with the wristband, each guest receives a QR code that leads to the online

privacy notice describing the use of the wristband. The page also contains an

unchecked consent checkbox. In the case of employee family members under the

age of 16, consent must be given by a parent.

Among the various activities planned for the event, ARRA Hotels' HR office has

autonomously set up a photocall area, separate from the main event venue, where

employees can come and have their pictures taken in traditional carnival costume.

The photos will be posted on ARRA Hotels' main website for general marketing

purposes.

On the night of the event, an employee from one of ARRA's Greek hotels is

displeased with the results of the photos in which he appears. He intends to file a

complaint with the relevant supervisory authority in regard to the following:

. The lack of any privacy notice in the separate photocall area

The unlawful cross-border processing of his personal data

. The unacceptable aesthetic outcome of his photos

Assuming that there is a cross-border processing of personal data, which of the

following criteria would NOT be useful to the lead supervisory authority responsible

for the Greek employee's complaint when trying to determine the location of the

controller's main establishment?

Options:

Where the controller is registered as a company.

Where the processor is registered as a company.

Where decisions about the processing activities are made.

Where the director with responsibility for processing activities is located.

Question 40

SCENARIO

Please use the following to answer the next question:

BHealthy, a company based in Italy, is ready to launch a new line of natural products, with a focus on sunscreen. The last step prior to product launch is for BHealthy to conduct research to decide how extensively to market its new line of sunscreens across Europe. To do so, BHealthy teamed up with Natural Insight, a company specializing in determining pricing for natural products. BHealthy decided to share its existing customer information – name, location, and prior purchase history – with Natural Insight. Natural Insight intends to use this information to train its algorithm to help determine the price point at which BHealthy can sell its new sunscreens.

Prior to sharing its customer list, BHealthy conducted a review of Natural Insight’s security practices and concluded that the company has sufficient security measures to protect the contact information. Additionally, BHealthy’s data processing contractual terms with Natural Insight require continued implementation of technical and organization measures. Also indicated in the contract are restrictions on use of the data provided by BHealthy for any purpose beyond provision of the services, which include use of the data for continued improvement of Natural Insight’s machine learning algorithms.

In which case would Natural Insight’s use of BHealthy’s data for improvement of its algorithms be considered data processor activity?

Options:

If Natural Insight uses BHealthy’s data for improving price point predictions only for BHealthy.

If Natural Insight receives express contractual instructions from BHealthy to use its data for improving its algorithms.

If Natural Insight agrees to be fully liable for its use of BHealthy’s customer information in its product improvement activities.

If Natural Insight satisfies the transparency requirement by notifying BHealthy’s customers of its plans to use their information for its product improvement activities.

Answer:

Explanation:

According to the General Data Protection Regulation (GDPR), a data processor is a natural or legal person, agency, public authority, or any other body who processes personal data on behalf of a data controller. A data controller is a natural or legal person, agency, public authority, or any other body who, alone or jointly with others, determines the purposes and means of the processing of personal data. The GDPR imposes specific obligations and responsibilities on both data controllers and data processors, and requires them to enter into a written contract or other legal act that sets out the subject matter, duration, nature, and purpose of the processing, as well as the obligations and rights of the data controller.

In this scenario, BHealthy is the data controller, as it determines the purpose and means of collecting and sharing its customer information with Natural Insight. Natural Insight is the data processor, as it processes the customer information on behalf of BHealthy for the purpose of determining the price point for BHealthy’s new sunscreens. However, Natural Insight also intends to use the customer information for its own purpose of improving its algorithms, which may not be aligned with BHealthy’s purpose or instructions. This may constitute a breach of the data processing contract and the GDPR, as the data processor must only process the personal data on documented instructions from the data controller, unless required to do so by EU or member state law (Article 28(3)(a) of the GDPR).

Therefore, the only case in which Natural Insight’s use of BHealthy’s data for improvement of its algorithms would be considered data processor activity is if Natural Insight receives express contractual instructions from BHealthy to use its data for improving its algorithms. This would mean that BHealthy has given its consent and authorization for Natural Insight to process the data for that specific purpose, and that Natural Insight is acting in accordance with BHealthy’s instructions. In this case, Natural Insight would still be bound by the data processing contract and the GDPR, and would have to comply with the other obligations and requirements of a data processor, such as ensuring the security of the data, respecting the conditions for engaging another processor, assisting the data controller in ensuring compliance with the GDPR, and deleting or returning the data to the data controller after the end of the service.

The other options are not valid cases for data processor activity, as they do not involve the data controller’s instructions or consent. If Natural Insight uses BHealthy’s data for improving price point predictions only for BHealthy, it may still be processing the data for a different purpose than the one for which it was collected and shared, and without BHealthy’s knowledge or approval. If Natural Insight agrees to be fully liable for its use of BHealthy’s customer information in its product improvement activities, it may still be violating the data processing contract and the GDPR, as it is not acting on behalf of the data controller, but for its own benefit. If Natural Insight satisfies the transparency requirement by notifying BHealthy’s customers of its plans to use their information for its product improvement activities, it may still be infringing the data controller’s rights and obligations, as it is not the data controller’s role to inform the data subjects of the processing activities, and it may not have a lawful basis for processing the data for its own purpose.

References:

GDPR
Data Controllers and Processors - GDPR EU
Who does the UK GDPR apply to? | ICO
What Activities Count as Processing Under the GDPR?
What constitutes data processing? - European Commission

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Certified Information Privacy Professional/Europe (CIPP/E) Questions and Answers

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