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New EU rules force telcos to 'fess up for data breaches

Non-telcos can still lose data whenever they want

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The European Council has approved a data breach notification rule for Europe's telecoms firms. The amendment to an EU Directive will force telcos to tell customers if they lose their data.

The European Parliament and Commission have already approved the amendments, which will become law after it has been published in the EU's Official Journal and signed by the President of the Council and President of the European Parliament.

The amendments, though, do not extend data breach notification duties to non-telecoms firms, despite the Parliament's earlier demands that it include providers of 'information society services' such as online banks or health services providers.

"The Council adopted a directive amending legislation in force on universal service, ePrivacy and consumer protection," said a Council statement on its meeting last week. "The directive adapts the regulatory framework by strengthening and improving consumer protection and user rights in the electronic communications sector, facilitating access to and use of ecommunications for disabled users and enhancing the protection of individuals’ privacy and personal data."

The Parliament had lobbied hard to have the notification requirement extended to the companies that provide services on the internet and not just the ones that connect users to it, but the Commission and Council rejected those attempts.

It was backed in its call by the Article 29 Working Party, which is a committee formed by all of Europe's national data protection watchdogs.

"An extension of personal data breach notifications to Information Society Services is necessary given the ever increasing role these services play in the daily lives of European citizens, and the increasing amounts of personal data processed by these services," the Working Party said earlier this year.

"Online transactions including access to e-banking services, private sector medical records and online shopping are a few examples of services that may be subject to personal data breaches causing significant risks to a large number of European citizens," it said. "Limiting the scope of these obligations to publicly available electronic communications services would only affect a very limited number of stakeholders and thus would significantly reduce the impact of personal data breach notifications as a means to protect individuals against risks such as identity theft, financial loss, loss of business or employment opportunities and physical harm."

The European Commission last week signalled its willingness to negotiate separately on the introduction of a more general data breach notification law.

"The Commission will... extend the debate to generally applicable breach notification requirements and work on possible legislative solutions," Information Society Commissioner Viviane Reding said at a meeting organised by the European Data Protection Supervisor last month. "This will be done in close consultation with the European Data Protection Supervisor and other stakeholders."

Reding also committed the Commission to a general review of the laws designed to protect internet users' privacy.

"In 2010, the Commission intends to launch... a major initiative to modernise and strengthen network and information security policy in the EU," she said at that meeting. "At the same time, I believe we should look at the emerging challenges for privacy and trust in the broad information society, with a particular emphasis on some of the outstanding issues which were raised during the discussions on the revision of the ePrivacy Directive, such as targeted advertising, convergence, the use of IP addresses and on-line identifiers."

Copyright © 2009, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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