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Data Privacy News: What's in a name? What the Uber fines teach us about local data privacy enforcement

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Data Privacy News: What's in a name? What the Uber fines teach us about local data privacy enforcement

Topics: Data Privacy

By Sophie Chase-Borthwick on 14 January 2019

The Uber data breach of 2016 is creating quite the ripple effect.

 

Most obviously, the hack’s revelation, and the media furore that accompanied it, caused numerous boards and management teams to ask the dreaded question of their data security teams, “Could this happen to us?” And many answers will have been sheepishly and concerningly in the affirmative.

 

But the ramifications go far beyond the reignited cybersecurity question. It has also highlighted an interesting legal point – and one that is often overlooked.

 

Uber 2016 data breach timeline - edited highlights

The Uber data breach of 2016 is creating quite the ripple effect.

 

Most obviously, the hack’s revelation, and the media furore that accompanied it, caused numerous boards and management teams to ask the dreaded question of their data security teams, “Could this happen to us?” And many answers will have been sheepishly and concerningly in the affirmative.

 

But the ramifications go far beyond the reignited cybersecurity question. It has also highlighted an interesting legal point – and one that is often overlooked.

Uber 2016 data breach timeline – edited highlights

  • October and November 2016 – Uber is hacked through a vulnerability in GitHub (an online resource for developers) which led them to Uber’s AWS login credentials. 57 million customers’ and drivers’ names, email addresses and mobile phone numbers are exposed, along with the driving licence and journey details for the 600,000 drivers affected. Uber conceals the hack and pays the hackers $100,000 to delete the data.
  • November 2017 – breach is revealed by Bloomberg and confirmed by Uber. Joe Sullivan, Chief Security Officer, and one of his deputies are fired for their roles in the cover-up, which was also known about by the then CEO, Travis Kalanick. Dara Khosrowshahi, who had taken over as Chief Executive Officer in the previous September, pledges transparency for the future.
  • May 2018 – GDPR comes into force, meaning the breach can only be penalised under pre-existing data protection laws, not GDPR.
  • July 2018 – Uber announces former Intel chief privacy and security counsel Ruby Zefo as Uber’s first Chief Privacy Officer and TomTom’s ex-VP for Privacy Security, Simon Hania, joins Uber as its first DPO.
  • September 2018 – US court fines Uber $148m as part of a legal settlement, avoiding a public court case in an action brought by 50 US states and the District of Colombia.
  • November 2018 – British and Dutch regulators impose fines on Uber of £385,000 ($490,760) and E600,000 ($678,780) respectively. Uber said in a statement, “We’re pleased to close this chapter on the data incident from 2016.”
  • December 2018 – the French Data Protection Authority fines Uber E400,000 ($460,000).

 

The events of November and December of last year are signalling a very interesting pattern that data privacy professionals need to take careful note of.

 

The Dutch regulator, the Autoriteit Persoonsgegevens, has ostensibly taken the lead on this case on behalf of all of Europe, on the basis that Uber’s European presence is headquartered in the Netherlands.

 

However, it is the way that the UK Information Commissioners Office (ICO) and the French Commission Nationale de l’Informatique et des Libertés (CNIL) have acted that has sparked the most interest. Not only have they fined the Dutch HQ for the impact of the breach on their own respective citizens, but they have also taken the additional steps of fining the local entities separately.

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Why is this important?

Because Uber tried to prevent exactly this happening with its carefully worded intra-company agreements. In these documents, each of its local corporate entities were named as mere “processors” of personal data, not “controllers”, meaning under pre-GDPR legislation, they could not be held ultimately liable, nor fined.

 

But the French and British regulators disagreed. They ruled that the deciding factor was not how the corporate entity was named or considered by Uber’s internal privacy structure, but how they acted in practice. And because they performed the role of a local data controller, they could be held responsible for their part in the local infringements (such as not reporting the breach to the relevant regulators within 72 hours), just as the European headquarters could be fined for its role in the wider offences (such as failing to identify and rectify the vulnerability itself).

 

In other words, role-based liability comes down to how you act, not what you call yourself.

 

Lawyers will not find this ruling surprising at all. This is a standard tenet of common law.

 

However, many privacy professionals are not necessarily so experienced in the way the law works. Those companies whose privacy teams are experts in technology, security and policy, and not law, may overlook the need to ensure that the way their local offices operate reflects what the privacy structure expects, creating legal vulnerabilities in the process.

 

This is presumably exactly what has happened to Uber. Rather than their legal and privacy team trying to pull off a ruse based on a technicality, it appears that there is a clear mismatch between what the privacy structure anticipated of the local entities’ roles and how they acted in reality.

 

As we have said in these Data Privacy news blogs many times before, data privacy is a multi-faceted discipline, and far more complex in practice than many realise.

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