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Since blockchain transactions are classified as pseudonymous, are they considered to be within the material scope of the GDPR or outside of it?
SCENARIO Please use the following to answer the next question: You have just been hired by a toy manufacturer based in Hong Kong. The company sells a broad range of dolls, action figures and plush toys that can be found internationally in a wide variety of retail stores. Although the manufacturer has no offices outside Hong Kong and in fact does not employ any staff outside Hong Kong, it has entered into a number of local distribution contracts. The toys produced by the company can be found in all popular toy stores throughout Europe, the United States and Asia. A large portion of the company's revenue is due to international sales. The company now wishes to launch a new range of connected toys, ones that can talk and interact with children. The CEO of the company is touting these toys as the next big thing, due to the increased possibilities offered: The figures can answer children's Questions: on various subjects, such as mathematical calculations or the weather. Each figure is equipped with a microphone and speaker and can connect to any smartphone or tablet via Bluetooth. Any mobile device within a 10-meter radius can connect to the toys via Bluetooth as well. The figures can also be associated with other figures (from the same manufacturer) and interact with each other for an enhanced play experience. When a child asks the toy a question, the request is sent to the cloud for analysis, and the answer is generated on cloud servers and sent back to the figure. The answer is given through the figure's integrated speakers, making it appear as though that the toy is actually responding to the child's question. The packaging of the toy does not provide technical details on how this works, nor does it mention that this feature requires an internet connection. The necessary data processing for this has been outsourced to a data center located in South Africa. However, your company has not yet revised its consumer-facing privacy policy to indicate this. In parallel, the company is planning to introduce a new range of game systems through which consumers can play the characters they acquire in the course of playing the game. The system will come bundled with a portal that includes a Near-Field Communications (NFC) reader. This device will read an RFID tag in the action figure, making the figure come to life onscreen. Each character has its own stock features and abilities, but it is also possible to earn additional ones by accomplishing game goals. The only information stored in the tag relates to the figures' abilities. It is easy to switch characters during the game, and it is possible to bring the figure to locations outside of the home and have the character's abilities remain intact. What presents the BIGGEST potential privacy issue with the company's practices?
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Question 124 - CIPP-E discussion

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SCENARIO

Please use the following to answer the next question:

Dynaroux Fashion ('Dynaroux') is a successful international online clothing retailer that employs approximately 650 people at its headquarters based in Dublin, Ireland. Ronan is their recently appointed data protection officer, who oversees the company's compliance with the General Data Protection Regulation (GDPR) and other privacy legislation.

The company offers both male and female clothing lines across all age demographics, including children. In doing so, the company processes large amounts of information about such customers, including preferences and sensitive financial information such as credit card and bank account numbers.

In an aggressive bid to build revenue growth, Jonas, the CEO, tells Ronan that the company is launching a new mobile app and loyalty scheme that puts significant emphasis on profiling the company's customers by analyzing their purchases. Ronan tells the CEO that: (a) the potential risks of such activities means that

Dynaroux needs to carry out a data protection impact assessment to assess this new venture and its privacy implications; and (b) where the results of this assessment indicate a high risk in the absence of appropriate protection measures, Dynaroux may have to undertake a prior consultation with the Irish Data Protection Commissioner before implementing the app and loyalty scheme.

Jonas tells Ronan that he is not happy about the prospect of having to directly engage with a supervisory authority and having to disclose details of Dynaroux's business plan and associated processing activities.

Which of the following facts about Dynaroux would trigger a data protection impact assessment under the GDPR?

A.

The company will be undertaking processing activities involving sensitive data categories such as financial and children's data.

Answers
A.

The company will be undertaking processing activities involving sensitive data categories such as financial and children's data.

B.

The company employs approximately 650 people and will therefore be carrying out extensive processing activities.

Answers
B.

The company employs approximately 650 people and will therefore be carrying out extensive processing activities.

C.

The company plans to undertake profiling of its customers through analysis of their purchasing patterns.

Answers
C.

The company plans to undertake profiling of its customers through analysis of their purchasing patterns.

D.

The company intends to shift their business model to rely more heavily on online shopping.

Answers
D.

The company intends to shift their business model to rely more heavily on online shopping.

Suggested answer: C

Explanation:

According to theFree CIPP/E Study Guide, page 14, "the GDPR requires controllers to carry out a data protection impact assessment (DPIA) prior to processing where a type of processing, in particular using new technologies, and taking into account the nature, scope, context and purposes of the processing, is likely to result in a high risk to the rights and freedoms of natural persons." The GDPR also provides a list of examples of processing operations that require a DPIA, such as "a systematic and extensive evaluation of personal aspects relating to natural persons which is based on automated processing, including profiling, and on which decisions are based that produce legal effects concerning the natural person or similarly significantly affect the natural person" (Article 35(3)(a)). Therefore, the fact that Dynaroux plans to undertake profiling of its customers through analysis of their purchasing patterns would trigger a DPIA under the GDPR, as it involves a systematic and extensive evaluation of personal aspects based on automated processing that may significantly affect the customers. The other options are not necessarily cases where a DPIA is required, although they may involve other obligations under the GDPR, such as obtaining a valid legal basis, providing adequate safeguards, or informing the data subjects.Reference:

Free CIPP/E Study Guide, page 14

GDPR, Article 35

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asked 22/11/2024
Veridjan Hoxha
36 questions
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