UK: Privacy & Information Security Law Blog: ICO Issues GBP 400,000 Fine For Illegal Collection And Sharing Of Personal Data

On April 9, 2019, the UK Information Commissioner's Office (the "ICO") levied one of its most significant fines under the Data Protection Act 1998 (the "DPA") against pregnancy and parenting club Bounty (UK) Limited ("Bounty"), fining the company GBP 400,000. Bounty, which provides new and expectant mothers with information and offers for products and services, collects personal data online, via an app, and offline through hard copy cards. The company also offered a data broking service. Bounty came to the attention of the ICO as a "significant supplier" of personal data in the context of the ICO's wider and ongoing investigation into the data broking industry.

The ICO revealed that Bounty shared personal data relating to more than 14 million individuals, the majority of them expectant or new mothers and their children, with third parties for the purposes of electronic marketing. Because some records were shared up to 17 times in the course of a year, more than 35 million personal data records in total were disclosed. The ICO considered this an "extraordinarily high" number, and commented that this represented "an unprecedented number of affected data subjects in the history of the Commissioner's investigations into data broking organizations."

In all, 39 companies received personal data from Bounty. Four companies formed the main focus of the ICO's investigation: marketing agency Indicia, marketing and profiling company Acxiom, credit reference agency Equifax, and telecommunications company Sky.

Following its investigation, the ICO concluded that Bounty breached the first data protection principle (now Article 5(1) of the EU General Data Protection Regulation (the "GDPR")), requiring that personal data is processed fairly and lawfully. Specifically, the ICO determined:

  • The data sharing was unfair because Bounty failed to disclose to data subjects the organizations with which data would be shared. Bounty's Privacy Policy merely stated that personal data may be shared with "selected third parties" which were not specifically named.
  • Sharing personal data with credit reference, marketing and profiling organizations also failed to meet the requirement of fairness because it was not within the reasonable expectation of data subjects, exposing them to potential distress without reasonable justification. In this respect, the ICO considered Bounty to have been motivated by financial gain.
  • Bounty also failed to establish an appropriate legal basis for the data sharing. Bounty attempted to rely on consent, but the ICO determined that any consent could not be considered specific or informed as the organizations with which data would be shared were not named in the Privacy Policy. The ICO also found that the legitimate interests condition was not met.

In determining whether a monetary penalty should be imposed, the ICO took into account a range of factors. Key considerations included: (1) the "extraordinarily high" number of affected data subjects; (2) the fact that individuals' data were shared on multiple occasions with multiple organizations; (3) the sustained and prolonged duration of the conduct; (4) the potential vulnerability of the data subjects; (5) the fact that the disclosure was contrary to the terms of the privacy notices and likely was outside the realm of individuals' reasonable expectations; (6) the nature of the data; and (7) the fact that individuals were subject to a significant loss of control over the data.

The ICO specifically considered whether the contravention was of a kind likely to cause substantial damage or distress. Factors that led the ICO to conclude that the threshold for substantial distress had been crossed included: (1) the fact that the privacy notice failed to mention the four companies with which the data was most frequently shared, so that individuals might reasonably have felt misled; (2) Bounty's failure to be transparent may have led to distress (when individuals were unsure about how organizations had obtained their personal data and were able to target them); (3) likely distress caused by a perceived loss of control over data that was shared without individuals' knowledge; (4) the fact that data was shared numerous times with multiple organizations; and (8) the number of affected data subjects.

The ICO formed the view that Bounty's actions in sharing the data were deliberate. It should have known that there was a risk the contravention would occur and that it was of a kind likely to cause substantial damage or distress, yet it failed to take steps to prevent a contravention.

Bounty defended itself on the grounds that there had been few complaints, and that very few data subjects had read their Privacy Policy, demonstrating a lack of interest in Bounty's data sharing practices. Bounty also argued that there was no evidence that distress had been suffered. The ICO countered that this was largely due to data subjects not being aware of how their data was being used.

In imposing the monetary penalty, the ICO took into account Bounty's financial position, the fact that the company had ceased its activities voluntarily and that it had since made significant changes to its data practices to comply with the GDPR and the Privacy and Electronic Communications Regulations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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