Denmark: Employers Required to Encrypt Personal Data

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By Marcus Hoy

Private sector companies will be required to use encryption when transmitting sensitive personal data via email under new rules announced July 23 by Denmark’s Data Protection Authority. Effective Jan. 1, 2019, the new rules follow a DPA assessment of the European Union’s General Data Protection Regulation, which took effect across the bloc May 25. The new rule, for which parliamentary approval is not required, will apply to all companies supervised by the Danish authority.

Encryption the Default

According to the DPA, a GDPA requirement that data controllers conduct risk assessments to evaluate the safety of data subjects’ personal information implies that the use of encryption should be the default method for email transmission if the message contains personal or sensitive information.

Increased incidents of security flaws, emails being sent to the wrong recipients, and emails being sent out automatically suggest that encryption should be the “most appropriate precautionary measure,” the DPA said.

Companies will be exempt from the encryption requirement if their risk assessments determine that “appropriate safeguards exist” despite the lack of encryption, the DPA said.

‘Sensitive or Personal Information'

In a July 24 statement provided to Bloomberg Law, DPA head of department Jesper Husmer Vang pointed out that Denmark is one of the most digitized nations in the EU, and thus the Danish DPA is often one of the first supervisory authorities to address new issues.

According to Husmer Vang, the new rule will cover all email that contains “sensitive or personal information” as defined by Article 9 of the Data Protection Regulation. This includes information revealing racial or ethnic origin, political opinions, religious or philosophical beliefs, and trade union membership, as well as data concerning health. The new rule will affect emails sent from Danish companies to recipients abroad, but not emails sent to Denmark from abroad.

“The Data Inspectorate is not aware of how many companies still transmit confidential and sensitive personal information through unencrypted emails,” Husmer Vang said. “However, there will undoubtedly be companies that still use unencrypted email. Changing these routines could well mean increased costs for companies.”

Sanctions could be applied to companies that continue to send unencrypted emails containing confidential and sensitive personal data after Jan. 1, Husmer Vang said, although they would not be applied to companies that had conducted a risk assessment demonstrating that encryption was unnecessary.

While he was unable to say whether other EU authorities shared the Danish DPA’s interpretation of the GDPR, Husmer Vang told Bloomberg Law that support for Denmark’s stance was expressed at a meeting of Nordic DPAs that took place in May.

‘Strict but Valid'

The new requirement appears to be a “strict but entirely valid interpretation” of the GDPR, Bird & Bird Attorney and IT specialist Martin von Haller Groenbaek told Bloomberg Law July 24. In practice, the requirement would likely apply to a “very large proportion” of emails sent by private sector companies,” von Haller Groenbaek said.

“There could be content in normal emails that constitutes personal or sensitive data, such as passing on contact details,” von Haller Groenbaek said. “It’s hard to see companies becoming compliant by Jan. 1.”

While so-called digital signatures are currently used for most browser-based email contact between individuals and state authorities, von Haller Groenbaek said, very few private companies currently use any form of encryption when communicating with customers or the general public. In order for such technology to function, von Haller Groenbaek pointed out, the recipient would be required to share and trust the same public keys for encryption the company uses.

A Question of Compatibility

In addition, some encryption technologies may be incompatible with certain email clients.

“I would expect Danish private companies to look at similar semi-closed webmail-like systems as the only realistic option for complying with the new DPA requirements,” Jesper Lund, chairman of the nonprofit IT-Political Association of Denmark, told Bloomberg Law July 24. “Rather than having every company develop its own closed secure email system, I would expect IT companies to market systems that can be used by Danish citizens for communicating with all companies that subscribe to the system.”

“The requirements will apply to Danish companies that send email to data subjects outside Denmark, although the technical difficulties are likely to be even bigger here,” Lund said. “Closed secure mail systems developed for Danish citizens may not be so easily accessible for data subjects outside Denmark.”

“Companies outside Denmark, including branches and subsidiaries of Danish companies, would probably have another DPA than the Danish one as their lead supervisory authority,” Lund said. “If so, the new rules cannot be enforced, unless something similar is adopted by other DPAs or the European Data Protection Board.”

To contact the reporter on this story: Marcus Hoy in Copenhagen at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bloomberglaw.com

For More Information

The DPA announcement is available here, further information here, both in Danish.

For more information on Danish HR law and regulation, see the Denmark primer.

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