Legal Implications of GDPR for Ecommerce Stores

Recent ruling from the Lithuanian DPA serves as another reminder that the "necessity" criteria under Article 6(1)(b) #GDPR must be interpreted strictly. This case involved an e-commerce platform that required a user's phone number for #accountverification, claiming contractual performance as the legal basis. The DPA reminded that #processing #personaldata under Article 6(1)(b) requires that data is objectively and genuinely essential for delivering the core, specific service agreed upon in the #contract, in this case for accessing the account of the #onlineplatform and using its services. Collecting a phone number for #accountverification is not a core contractual obligation, although, of course, #accountsecurity is important. In this case, the platform's own terms of service listed multiple ways to verify an account, including by collecting phone number. However, this was not "#necessary" because less intrusive methods were available. https://lnkd.in/d3spRrg4 #accountverification #accountholders #processingpersonaldata #personaldata #GDPR #contractualnecessity

How a data controller decides the 'how' and 'why' of personal data processing? 🌎 Data Controller: An online retailer named "ShopEase." 👉 Purpose of Processing: ShopEase aims to improve its marketing strategies and customer experience by analyzing customer behavior and preferences. 👉 Means of Processing: ShopEase plans to use customer purchase history, website navigation patterns, and demographic data to create personalized product recommendations and targeted advertisements. Example: 🔸 Step 1 - Purpose Determination: ShopEase identifies that they want to enhance their marketing strategies and customer experience through data analysis. The specific purpose is to provide personalized product recommendations and targeted advertisements to customers based on their behaviors and preferences. 🔸 Step 2 - Means Determination: ◾ Data Collection: ShopEase collects customer purchase history, browsing patterns, and demographic information such as age, gender, and location. ◾ Data Analysis: ShopEase employs data analytics tools to process the collected data. They use algorithms to identify patterns, preferences, and correlations. ◾ Personalized Recommendations: Using the insights gained from data analysis, iShopEase creates algorithms that generate personalized product recommendations for individual customers. ◾ Targeted Advertisements: ShopEase uses the analyzed data to serve targeted advertisements to customers while they browse the website. ◾ Justification and Compliance: ShopEase must ensure that its data processing activities are compliant with data protection regulations, such as the GDPR. To do so: ▫ Lawful Basis: ShopEase determines a lawful basis for processing, which could be customer consent, contractual necessity, or legitimate interest. ▫ Transparency: ShopEase provides clear privacy notices explaining how customer data will be used, what data will be collected, and for what purposes. ▫ Minimization: ShopEase only collects necessary data for its specific purpose and avoids collecting excessive or unrelated information. ▫ Data Security: ShopEase implements security measures to protect customer data from unauthorized access or breaches. ▫ Data Subject Rights: ShopEase informs customers about their rights, such as the right to access their data, rectify inaccuracies, and object to processing. ▫ Retention: ShopEase establishes a data retention policy, specifying how long customer data will be kept for analysis and marketing purposes. 🔘 Conclusion: In this scenario, ShopEase, as the data controller, determines both the purpose (improving marketing and customer experience) and means (data collection, analysis, personalized recommendations, and targeted advertisements) of processing personal data. The controller's responsibilities include ensuring compliance with relevant data protection laws, respecting individuals' rights, and implementing appropriate security measures to safeguard the data.

𝗗𝗣𝗔 𝗼𝗳 𝗟𝗼𝘄𝗲𝗿 𝗦𝗮𝘅𝗼𝗻𝘆: 𝗖𝗼𝗻𝘀𝗲𝗻𝘁 𝗶𝗻 𝗪𝗲𝗯 𝗦𝗵𝗼𝗽𝘀 - 𝗴𝘂𝗲𝘀𝘁 𝗼𝗿𝗱𝗲𝗿 𝗮𝗻𝗱 𝗮𝗯𝗮𝗻𝗱𝗼𝗻𝗲𝗱 𝗰𝗮𝗿𝘁 𝗲𝗺𝗮𝗶𝗹 In its latest annual report for 2023, the DPA of Lower Saxony explains some cases where, according to the DPAs view, the online shop / e-commerce operator needs to obtain data subjects’ consent for data processing. In short: if more personal data is processed than it is necessary for the ordering process, in most cases, consent must be obtained.   There are some other aspects related to the consent topic. For example, the authority reminds that according to the position of the German Data Protection Conference (DSK), online shops must have an option to place an order without registration (guest order). In one case, a person received an email with their account details even before completing the order and the DPA ordered the shop to change this practice, even though the company stated that the account was only created when the person actually used the login details. Another issue discussed by the DPA were email reminders about items left in the shopping cart, which many online shops send to their customers. According to the authority, such emails are only allowed if valid consent is obtained. If the customers add items to their carts, fill out the order form and then decide to cancel the ordering process, the data provided in the order form cannot be used for reminder emails without prior consent. Also, pop-ups prompting the users to enter their phone or email number when putting an item into the shopping cart are considered problematic by the authority, as they mislead customers to believe that the data is required for the shopping process. Finally, the shops should not only look at the lawfulness of their processing operations, but also at the technical implementation, especially when introducing new functions. Regular review through the entire life cycle of the shop is required in order to ensure compliance at all times. Full text of the annual report (in German): https://lnkd.in/dARS9nr9 #privacy #GDPR #dataprotection #DSGVO

𝐆𝐃𝐏𝐑 𝐕𝐢𝐨𝐥𝐚𝐭𝐢𝐨𝐧𝐬 𝐂𝐚𝐧 𝐍𝐨𝐰 𝐀𝐦𝐨𝐮𝐧𝐭 𝐭𝐨 𝐔𝐧𝐟𝐚𝐢𝐫 𝐂𝐨𝐦𝐩𝐞𝐭𝐢𝐭𝐢𝐨𝐧: 𝐀 𝐆𝐚𝐦𝐞-𝐂𝐡𝐚𝐧𝐠𝐢𝐧𝐠 𝐃𝐞𝐯𝐞𝐥𝐨𝐩𝐦𝐞𝐧𝐭 𝐟𝐨𝐫 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬𝐞𝐬 A recent judgment by the Court of Justice of the European Union (CJEU) has dramatically expanded the potential consequences of violating GDPR. It's no longer simply about administrative fines or compliance burdens—now, misuse of personal data can also amount to actionable unfair competition, directly empowering competitors to take legal steps. 📌 Why is this significant? Until now, GDPR compliance was mostly seen as an internal legal and compliance matter—a cost rather than a strategic opportunity. Businesses often considered privacy rules primarily in terms of avoiding fines from data protection authorities. However, this new development shifts the landscape completely: companies misusing personal data could face lawsuits from their competitors, not just regulators. Imagine a scenario where a business unlawfully leverages user data—collected without adequate transparency or explicit consent—to gain commercial insights, better-targeted marketing, or improved customer acquisition. Such unlawful data use clearly provides an unfair competitive edge, disadvantaging competitors who diligently comply with GDPR. Under this recent CJEU ruling, those GDPR-compliant competitors now have a powerful legal tool: they can sue for unfair competition, demanding restoration of fair market conditions and potentially significant compensation for damages incurred. 📌 Strategic Implications This ruling makes GDPR compliance an essential strategic asset rather than merely a regulatory obligation. Companies investing in rigorous data protection practices not only avoid regulatory fines but also gain a competitive weapon against rivals who take shortcuts on privacy compliance. Moreover, businesses must now reconsider their entire data management strategy. The stakes are significantly higher, as non-compliance exposes them not only to regulatory penalties but also costly litigation initiated by competitors who feel commercially harmed by such practices. 📌 What should businesses do next? 1️⃣ Conduct thorough reviews of data collection processes to ensure transparency and consent. 2️⃣ Integrate data protection deeply into their competitive strategy and risk assessment. 3️⃣ Monitor competitors’ practices actively to ensure fair competition. What do you think about this new development? #GDPR #PrivacyCompliance #Ecommerce #DigitalMarketing #UnfairCompetition #LegalUpdate #DataProtection