Austria: European Commission Tightens The Deadline: Data Breach Notification Within 24 Hrs

A new EU Regulation forces providers of public communications services to notify data breaches to their regulators within 24 hours. This Regulation will be directly applicable in the Member States as of 25 August 2013. At first glance, Austrian telecommunications law would seem to be in line with this new Regulation, but the difference lies in the details.

1. New EU Regulation on data breach notification

The European regulatory framework on electronic communications obliges providers of public electronic communications services to report personal data breaches to their national authorities.¹ The European Commission, however, detected a respective lack of harmonization among the Member States and exercised its power to issue technical implementing measures on the notification obligations by publishing the Regulation (EU) No 611/2013.² This directly applicable and fully binding Regulation will enter into force on 25 August 25 2013.

The new Regulation applies to providers of public electronic communication services. If a provider detects a personal data breach, it must notify the competent national authority of this breach within 24 hours.³ This stipulation puts eminent pressure on the provider, as it will be hard to meet this deadline when considering the attending circumstances, such as the company's effective business hours and its internal structures and reporting lines. However, the Regulation provides a loophole by stating that the notification must be submitted within 24 hours "where feasible." In case a provider is not able to provide all information about the incident within this timeframe, the Regulation allows it to file only an initial (but still comprehensive) notification within 24 hours. That notification must include the provider's identity, the date, time and circumstances of the incident (e.g. data loss, theft, copying), the nature and content of the breached data, and the technical and organisational measures initiated by the provider. Within three days after this initial notification, the provider must deliver a second set of information containing further details about the data breach, such as a summary of the incident, the number of individuals concerned, potential consequences, potential adverse effects, etc.

Additionally, the provider must notify the affected individuals without "undue delay" if the data breach is likely to adversely affect their personal data or privacy.⁴ This stipulation requires each provider to self assess whether individuals might be adversely affected in the wake of a data breach. However, the Regulation explicitly determines some parameters that must be addressed during the course of this assessment. In particular, the provider must pay attention to whether the breach involves data concerning financial information, location data, internet log files, web-browsing histories, e-mail data, or itemized call lists. The notification obligation is also triggered when the data breach could result in identity theft or fraud, physical harm, psychological distress, humiliation or damage to an individual's reputation. The Regulation does not set a firm timeframe for notifying affected individuals, but requests the provider to notify them without "undue delay." Under exceptional circumstances (such as potential risks for the investigation), the notification can be delayed with the permission of the relevant national authority.⁵ When notifying affected individuals, the provider has to provide them with information according to Annex 2 of the Regulation, e.g. about the nature, content and likely consequences of the incident, as well as with a summary of the incident that caused the personal data breach, an overview of the measures taken, and the provider's contact details.

All in all, this new Regulation imposes a bundle of rather harsh notification requirements on providers of public electronic communications services. From 25 August 2013, the Regulation applies directly in the Member States. Calling the precedence principle⁶ to mind, European law is superior to the national laws of the Member States. Any national rules that are in contradiction to European law must not be applied. National law is neither rescinded nor repealed, but its binding force is suspended.

2. Impact on Austrian telecommunications law

A superficial glance at the Austrian Telecommunications Act (the TKG)⁷ might lead one to conclude that the notification requirements currently implemented in the TKG are more or less in line with the new Regulation. However, a closer look raises some substantial questions.

Most importantly, one must consider whether the new Regulation leads to any changes in the national authorities' competencies. The Regulation refers to the "national competent authority"⁸, which in some Member States (e.g. in Austria) triggers the question whether this is to be understood the national telecom regulator or the data protection regulator. The TKG in its current version requires providers to notify the Austrian Data Protection Commission, which must then inform the Austrian telecom regulator. It is questionable whether this allocation of competencies is still in line with the new Regulation. The Regulation itself stays silent on this question. However, it seems doubtful whether a data protection authority equates to the "competent national authority" in terms of the Regulation, since the EU Data Protection Directive in any case did not force the Member States to install national data protection regulators. Countries like Germany, for example, favored the model of (compulsory) data protection officers and refrained from establishing a nationwide DP regulator. If the "competent national authority" in terms of the Regulation was understood to be a country's DP regulator, this would deprive the Regulation from its applicability in States with no DP regulators. This indicates that the Regulation is instead to be understood in a way that notification must be performed with the national telecom regulator. However, in Austria this approach would contradict the -- in that respect, arguably suspended -- Austrian TKG. In case of doubt, Austrian communication service providers are, however, well advised to submit their notifications to both authorities, the telecom regulator and the data protection regulator.

This is only one example of the complex considerations the new Regulation triggers on its interplay with existing national telecommunications and privacy laws. However, such considerations will be hardly solvable within the Regulation's 24 hour notification limit and should therefore be thoroughly scrutinized well in advance the occurrence of any data breach.

Footnotes

1. Directive 2002/58/EC, Article 4.

2. Commission Regulation (EU) No 611/2013 of 24 June 2013 on the measures applicable to the notification of personal data breaches under Directive 2002/58/EC of the European Parliament and of the Council on privacy and electronic communications, OJ L 173, 26.6.2013, p 2.

3. Detection of a personal data breach shall be deemed to have taken place when the provider has acquired sufficient awareness that a security incident has occurred that led to personal data being compromised, in order to make a meaningful notification as required under this Regulation. (Article 2 Para 2 of Commission Regulation (EU) No 611/2013).

4. Commission Regulation (EU) No 611/2013, Article 3.

5. Commission Regulation (EU) No 611/2013, Article 3 Para 5.

6. European Court of Justice enshrined the precedence principle in the Costa vs Enel case of 15.7.1964. With later cases the Court clarified that the precedence of European law has to be applied to all national acts.

7. Federal Act Enacting a Telecommunications Act (Telecommunications Act 2003 - TKG 2003), Federal Law Gazette I No 70/2003 as amended on Federal Law Gazette I No 96/2013.

8. Commission Regulation (EU) No 611/2013, Article 2.

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