On May 22, 2019, Singapore’s Personal Data Protection Commission introduced three new initiatives:
a) A public consultation on data portability. The corresponding consultation paper also proposes to introduce data innovation provisions as part of the ongoing review of the Personal Data Protection Act (PDPA). The consultation is open for six weeks and will close on July 3, 2019.
b) A guide on active enforcement.
c) An updated guide on managing data breaches.
Public consultation on data portability
The commission is proposing to introduce a data portability obligation, with the aim of giving individuals greater control over their personal data and enhancing innovation to support the growth of the digital economy.
The following impacts were considered:
- Consumer impact: Where consumers are able to move their data from one service provider to another, they are empowered to try out new service offerings and this will in turn incentivize organizations to provide more competitive offers.
- Market impact: Data portability provides a means of reducing barriers to entry, particularly for start-ups or small players in sectors that are heavily reliant on consumer data. The consultation paper cited the Open Banking initiative in the UK, which has enabled the creation of an app that allows consumers to consolidate accounts from multiple banks, and the Data Transfer Project, which is an industry-led initiative that provides users with the ability to move their data between different online platforms. At the same time, the commission acknowledged that overly burdensome requirements and the increase in compliance costs could result in a first mover losing its incentive to innovate, as a follower could simply emulate its business model and acquire consumer data through the portability obligation. Hence, a balance would need to be struck to create the right competitive landscape and reap the most benefits for consumers and the economy.
- International developments: Data portability has been introduced in the EU, Australia and the Philippines, and other jurisdictions including India, Japan, New Zealand and the United States (California) are also considering its introduction into their domestic laws. It was therefore important that Singapore keeps pace with international data protection developments in alignment with other key jurisdictions.
The consultation paper proposed that the scope of the obligation be as follows:
- Covered organizations: The obligation will not apply to exempted organizations under the PDPA (including individuals acting in a personal or domestic capacity, employees acting in the course of employment and public agencies). It will also not apply to data intermediaries.
- Receiving organizations: The obligation will only apply if the receiving organization is in Singapore. However, it will not prevent voluntary arrangements by organizations to transmit data to overseas entities with an individual’s consent. Where the data is irrelevant or excessive in relation to a service or product offered to an individual, a receiving organization may choose not to accept the data or retain only a portion of the data.
- Requesting individual: Any individual can make a data portability request, regardless of whether they are in Singapore.
- Covered data: This will only apply to data in the possession or control of an organization that is held in electronic form. The obligation applies to two types of data:
(a) data that is provided by an individual to the organization (“user provided data”); and
(b) data that is generated by an individual’s activities in using the organization’s products or services (“user activity data”).
The obligation does not, however, apply to “derived data,” which refers to new data elements created through the processing of other data by applying business-specific rules.
The obligation applies to “business contact information” as defined in the PDPA.
It would also apply to the personal data of third parties. The receiving organization would only be allowed to process such personal data where the data is under the control of the requesting individual and used only for their personal or domestic purposes. The receiving organization must obtain fresh consent to use the data for any other purposes.
- Handling portability requests: The paper sets out details of the key responsibilities of the porting organization in relation to:
(a) receiving the request;
(b) verifying the request;
(c) verifying the data to be ported;
(d) porting the data, where the following information would need to be provided to the individual:
a. fees payable by the requesting individual; and
b. when the data will be ported;
(e) the format of the ported data;
(f) informing the individual of a rejection;
(g) preserving the data; and
(h) responding to a request withdrawal by the individual.
The data portability obligation is intended to be complementary to the access obligation under the PDPA. Exceptions to the portability obligation will be aligned to exceptions to the access obligation except where access could reveal the personal data of another individual, or reveal the identity of the individual who has provided the personal data and that individual does not consent to the disclosure of their identity.
In terms of enforcement, the commission will have powers to review an organization’s:
- refusal to port data;
- failure to port data within a reasonable period of time; and
- fees for porting data pursuant to an individual’s request.
The commission will also have the power to issue binding codes of practice on data portability to take into account more specific sectoral requirements. Matters that will be addressed in these codes of practice will include:
- consumer safeguards;
- counterparty assurance;
- interoperability; and
- security of data.
Public consultation on data innovation provisions
The commission is proposing to allow organizations to use personal data for business innovation purposes, which refers to any of the following:
- operational efficiency and service improvements;
- product and service development; and
- knowing customers better.
In relation to the collection or disclosure of such personal data for business innovation purposes, however, organizations must still notify the individual concerned and seek their consent, unless an exception in the PDPA applies. Also, the business innovation purposes provision does not extend to the use of personal data for direct marketing to consumers. The commission also proposes to exempt derived personal data, which is new data created through the processing of other data by applying business-specific logic or rules, from the following obligations under the PDPA:
- the access obligation under section 21;
- the correction obligation under section 22; and
- the proposed data portability obligation mentioned above.
Guide to active enforcement
The commission has introduced a new expedited decision-making process to bring investigations on clear-cut breaches to a conclusion quickly. This process can be applied where:
- the nature of the breach is similar to precedent cases with similar facts; and
- there is an upfront admission of liability for breaching the PDPA (which would be considered a mitigating factor).
Examples include common forms of breaches such as URL manipulation, poor password management or printing errors resulting in unauthorized disclosures to the wrong recipients.
Importantly, an organization can request to make an undertaking to implement a plan to resolve a breach, in place of a full investigation, where:
- it can demonstrate that it has proper accountability in place, for instance, Data Protection Trustmark certification; or
- the commission assesses that such undertaking would achieve a similar or better enforcement outcome than a full investigation.
Guide to Managing Data Breaches 2.0
The commission has updated its guide on managing data breaches. It makes recommendations in two main areas:
- Threshold for notifying the commission and individuals of a data breach: this is now 500 or more affected individuals, or where significant harm to or other impact on individuals is likely; and
- Timeliness of notification: internal investigations and assessments should take no more than 30 days from an organization becoming aware of a potential breach and notification no later than 72 hours from completion of the assessment.
Given the potential significance of the proposed data portability obligation and data innovation provisions to businesses in Singapore when these take effect, organizations may wish to consider submitting their feedback on the various issues raised in the consultation paper.
Businesses should also take note of the two guides mentioned above, particularly the one on managing data breaches, as this is a timely precursor to the mandatory breach reporting requirement that will soon be introduced in Singapore.
Reed Smith LLP is licensed to operate as a foreign law practice in Singapore under the name and style, Reed Smith Pte Ltd (hereafter collectively, Reed Smith). Where advice on Singapore law is required, we will refer the matter to and work with Reed Smith’s Formal Law Alliance partner in Singapore, Resource Law LLC, where necessary.