Guidelines 3/2018 on the territorial scope of the GDPR (Article 3)

“An establishment in the Union”

The threshold for “stable arrangement [9]” can actually be quite low when the centre of activities of a controller concerns the provision of services online. As a result, in some circumstances, the presence of one single employee or agent of a non-EU entity in the Union may be sufficient to constitute a stable arrangement (amounting to an ‘establishment’ for the purposes of Art 3(1)) if that employee or agent acts with a sufficient degree of stability. Conversely, when an employee is based in the EU but the processing is not being carried out in the context of the activities of the EU-based employee in the Union (i.e. the processing relates to activities of the controller outside the EU), the mere presence of an employee in the EU will not result in that processing falling within the scope of the GDPR. In other words, the mere presence of an employee in the EU is not as such sufficient to trigger the application of the GDPR, since for the processing in question to fall within the scope of the GDPR, it must also be carried out in the context of the activities of the EU-based employee.

_{[9] Weltimmo, paragraph 31.}

The fact that the non-EU entity responsible for the data processing does not have a branch or subsidiary in a Member State does not preclude it from having an establishment there within the meaning of EU data protection law. Although the notion of establishment is broad, it is not without limits. It is not possible to conclude that the non-EU entity has an establishment in the Union merely because the undertaking’s website is accessible in the Union [10].

_{[10] CJEU, Verein für Konsumenteninformation v. Amazon EU Sarl, Case C‑191/15, 28 July 2016, paragraph 76 (hereafter “Verein für Konsumenteninformation”).}

Processing of personal data carried out “in the context of the activities of” an establishment

The EDPB considers that, for the purpose of Article 3(1), the meaning of “processing in the context of the activities of an establishment of a controller or a processor” is to be understood in light of the relevant case law. On the one hand, with a view to fulfilling the objective of ensuring effective and complete protection, the meaning of “in the context of the activities of an establishment” cannot be interpreted restrictively [12]. On the other hand, the existence of an establishment within the meaning of the GDPR should not be interpreted too broadly to conclude that the existence of any presence in the EU with even the remotest links to the data processing activities of a non-EU entity will be sufficient to bring this processing within the scope of EU data protection law. Some commercial activity carried out by a non-EU entity within a Member State may indeed be so far removed from the processing of personal data by this entity that the existence of the commercial activity in the EU would not be sufficient to bring the data processing by the non-EU entity within the scope of EU data protection law [13].

_{[12] Weltimmo, paragraph 25 and Google Spain, paragraph 53.}

_{[13] G29 WP 179 update – Update of Opinion 8/2010 on applicable law in light of the CJEU judgment in Google Spain, 16th December 2015}

Consideration of the following two factors may help to determine whether the processing is being carried out by a controller or processor in the context of its establishment in the Union

i) Relationship between a data controller or processor outside the Union and its local establishment in the Union

The data processing activities of a data controller or processor established outside the EU may be inextricably linked to the activities of a local establishment in a Member State, and thereby may trigger the applicability of EU law, even if that local establishment is not actually taking any role in the data processing itself [14]. If a case by case analysis on the facts shows that there is an inextricable link between the processing of personal data carried out by a non-EU controller or processor and the activities of an EU establishment, EU law will apply to that processing by the non-EU entity, whether or not the EU establishment plays a role in that processing of data [15].

_{[14] CJEU, Google Spain, Case C‑131/12}

_{[15] G29 WP 179 update – Update of Opinion 8/2010 on applicable law in light of the CJEU judgment in Google Spain, 16th December 2015}

ii) Revenue raising in the Union

Revenue-raising in the EU by a local establishment, to the extent that such activities can be considered as “inextricably linked” to the processing of personal data taking place outside the EU and individuals in the EU, may be indicative of processing by a non-EU controller or processor being carried out “in the context of the activities of the EU establishment”, and may be sufficient to result in the application of EU law to such processing [16].

_{[16] This may potentially be the case, for example, for any foreign operator with a sales office or some other presence in the EU, even if that office has no role in the actual data processing, in particular where the processing takes place in the context of the sales activity in the EU and the activities of the establishment are aimed at the inhabitants of the Member States in which the establishment is located (WP179 update).}

Guidelines 3/2018 on the territorial scope of the GDPR (Article 3)

Data subjects in the Union

The wording of Article 3(2) refers to “personal data of data subjects who are in the Union”. The application of the targeting criterion is therefore not limited by the citizenship, residence or other type of legal status of the data subject whose personal data are being processed. Recital 14 confirms this interpretation and states that “[t]he protection afforded by this Regulation should apply to natural persons, whatever their nationality or place of residence, in relation to the processing of their personal data”.

While the location of the data subject in the territory of the Union is a determining factor for the application of the targeting criterion as per Article 3(2), the EDPB considers that the nationality or legal status of a data subject who is in the Union cannot limit or restrict the territorial scope of the Regulation.

The requirement that the data subject be located in the Union must be assessed at the moment when the relevant trigger activity takes place, i.e. at the moment of offering of goods or services or the moment when the behaviour is being monitored, regardless of the duration of the offer made or monitoring undertaken.

Guidelines 3/2018 on the territorial scope of the GDPR (Article 3)

Offering of goods or services, irrespective of whether a payment of the data subject is required, to data subjects in the Union

The first activity triggering the application of Article 3(2) is the “offering of goods or services”, a concept which has been further addressed by EU law and case law, which should be taken into account when applying the targeting criterion. The offering of services also includes the offering of information society services, defined in point (b) of Article 1(1) of Directive (EU) 2015/1535 [23] as “any Information Society service, that is to say, any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services”.

_{[23] Directive (EU) 2015/1535 of the European Parliament and of the Council of 9 September 2015 laying down a procedure for the provision of information in the field of technical regulations and of rules on Information Society services.}

Another key element to be assessed in determining whether the Article 3(2)(a) targeting criterion can be met is whether the offer of goods or services is directed at a person in the Union, or in other words, whether the conduct on the part of the controller, which determines the means and purposes of processing, demonstrates its intention to offer goods or a services to a data subject located in the Union. Recital 23 of the GDPR indeed clarifies that “in order to determine whether such a controller or processor is offering goods or services to data subjects who are in the Union, it should be ascertained whether it is apparent that the controller or processor envisages offering services to data subjects in one or more Member States in the Union.”

The elements listed in Recital 23 echo and are in line with the CJEU case law based on Council Regulation 44/2001 [25] on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, and in particular its Article 15(1)(c). In Pammer v Reederei Karl Schlüter GmbH & Co and Hotel Alpenhof v Heller (Joined cases C-585/08 and C-144/09), the Court was asked to clarify what it means to “direct activity” within the meaning of Article 15(1)(c) of Regulation 44/2001 (Brussels I). The CJEU held that, in order to determine whether a trader can be considered to be “directing” its activity to the Member State of the consumer’s domicile, within the meaning of Article 15(1)(c) of Brussels I, the trader must have manifested its intention to establish commercial relations with such consumers. In this context, the CJEU considered evidence able to demonstrate that the trader was envisaging doing business with consumers domiciled in a Member State.

_{[25] Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.}

While the notion of “directing an activity” differs from the “offering of goods or services”, the EDPB deems this case law in in Pammer v Reederei Karl Schlüter GmbH & Co and Hotel Alpenhof v Heller (Joined cases C-585/08 and C-144/09) [26] might be of assistance when considering whether goods or services are offered to a data subject in the Union. When taking into account the specific facts of the case, the following factors could therefore inter alia be taken into consideration, possibly in combination with one another:

_{[26] It is all the more relevant that, under Article 6 of Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I), in absence of choice of law, this criterion of “directing activity” to the country of the consumer’s habitual residence is taken into account to designate the law of the consumer’s habitual residence as the law applicable to the contract.}

– The EU or at least one Member State is designated by name with reference to the good or service offered;

– The data controller or processor pays a search engine operator for an internet referencing service in order to facilitate access to its site by consumers in the Union; or the controller or processor has launched marketing and advertisement campaigns directed at an EU country audience

– The international nature of the activity at issue, such as certain tourist activities;

– The mention of dedicated addresses or phone numbers to be reached from an EU country;

– The use of a top-level domain name other than that of the third country in which the controller or processor is established, for example “.de”, or the use of neutral top-level domain names such as “.eu”;

– The description of travel instructions from one or more other EU Member States to the place where the service is provided;

– The mention of an international clientele composed of customers domiciled in various EU Member States, in particular by presentation of accounts written by such customers;

– The use of a language or a currency other than that generally used in the trader’s country, especially a language or currency of one or more EU Member states;

– The data controller offers the delivery of goods in EU Member States.

Guidelines 3/2018 on the territorial scope of the GDPR (Article 3)

Monitoring of data subjects’ behaviour

For Article 3(2)(b) to trigger the application of the GDPR, the behaviour monitored must first relate to a data subject in the Union and, as a cumulative criterion, the monitored behaviour must take place within the territory of the Union.

The nature of the processing activity which can be considered as behavioural monitoring is further specified in Recital 24 which states that “in order to determine whether a processing activity can be considered to monitor the behaviour of data subjects, it should be ascertained whether natural persons are tracked on the internet including potential subsequent use of personal data processing techniques which consist of profiling a natural person, particularly in order to take decisions concerning her or him or for analysing or predicting her or his personal preferences, behaviours and attitudes.” While Recital 24 exclusively relates to the monitoring of a behaviour through the tracking of a person on the internet, the EDPB considers that tracking through other types of network or technology involving personal data processing should also be taken into account in determining whether a processing activity amounts to a behavioural monitoring, for example through wearable and other smart devices.

As opposed to the provision of Article 3(2)(a), neither Article 3(2)(b) nor Recital 24 expressly introduce a necessary degree of “intention to target” on the part of the data controller or processor to determine whether the monitoring activity would trigger the application of the GDPR to the processing activities. However, the use of the word “monitoring” implies that the controller has a specific purpose in mind for the collection and subsequent reuse of the relevant data about an individual’s behaviour within the EU. The EDPB does not consider that any online collection or analysis of personal data of individuals in the EU would automatically count as “monitoring”. It will be necessary to consider the controller’s purpose for processing the data and, in particular, any subsequent behavioural analysis or profiling techniques involving that data. The EDPB takes into account the wording of Recital 24, which indicates that to determine whether processing involves monitoring of a data subject behaviour, the tracking of natural persons on the Internet, including the potential subsequent use of profiling techniques, is a key consideration.

The application of Article 3(2)(b) where a data controller or processor monitors the behaviour of data subjects who are in the Union could therefore encompass a broad range of monitoring activities, including in particular:

– Behavioural advertisement

– Geo-localisation activities, in particular for marketing purposes

– Online tracking through the use of cookies or other tracking techniques such as fingerprinting

– Personalised diet and health analytics services online

– CCTV

– Market surveys and other behavioural studies based on individual profiles

– Monitoring or regular reporting on an individual’s health status