Documents considered by the Committee on 21 July 2015 - European Scrutiny Contents

41 Data Protection in the EU

Committee's assessment Legally and politically important
Committee's decisionNot cleared from scrutiny; further information requested; drawn to the attention of the Justice Committee.
Document details(a) Proposal for a General Data Protection Regulation, (b) Proposal for a Police and Criminal Justice Data Protection Directive, (c) Commission Communication on EU-US data flows, (d) Commission Communication on the Safe Harbour
Legal base(a) Article 16(2) and 114(1) TFEU; co-decision; QMV (b) Article 16(2) TFEU; co-decision; QMV

(c) and (d) —

DepartmentMinistry of Justice
Document numbers(a) (33649), 5853/12 + ADDs 1-2, COM(12) 11

(b) (33646), 5833/12 + ADDs 1-2, COM(12) 10

(c) (35608), 17067/13, COM(13) 846

(d) (35609), 17069/13, COM(13) 847

Summary and Committee's conclusions

41.1 The Commission initially proposed the Data Protection package, comprised of the General Data Protection Regulation (document (a)) and the Police and Criminal Justice Data Protection Directive (document (b)), in January 2012. This was to update the EU's 1995 data protection rules in line with technological developments in the use of personal data and to strengthen online privacy rights, increase consumer confidence, boost growth and address divergent national implementation of the existing rules.

41.2 In the course of our predecessors' scrutiny, they endorsed the opinion they received from the Justice Committee that the proposal, in its original prescriptive form, would not produce a proportionate, practicable, affordable or effective system of data protection. They agreed with that Committee that there needs to be a selective approach to harmonisation, embracing the co-operation and co-ordination elements of the proposal but leaving implementation of compliance issues to the Member States. They also encouraged the Government to press the Commission to review its own costs' estimates in the light of impact assessment evidence from the UK and other Member States and to marshal their support in the negotiations.

41.3 Since then, despite the failure of a partial general approach (PGA) in June 2013 and the Snowden disclosures concerning the surveillance of the communications of EU citizens (to which documents (c) and (d) relate), four PGAs have been agreed. The latest was at the 12-13 March JHA Council. The Government opposed the first two PGAs "in principle" (on third country transfers of data, extraterritoriality and on obligations on data controllers when processing data). However, it departed from this approach, without warning and without requesting a scrutiny waiver, in supporting the third (on Chapter IX provisions—research and freedom of speech). It has since acknowledged this amounted to a scrutiny override.

41.4 At the March JHA Council on a PGA relating to Chapter II (general principles) and Chapters VI and VII (the one-stop shop mechanism), the UK abstained. We now report on the letter of 18 March in which the previous Government sets out the outcome of that Council, but which was not received in sufficient time before dissolution for our predecessor Committee to consider.

41.5 We also report on the letter of 15 July of the new Secretary of State for Justice (Michael Gove). This updates the Committee on the outcome of the June JHA Council. This letter was preceded by two Written Ministerial Statements on the same topic: one from the Home Secretary (Mrs Theresa May)[ 335] and the other from Parliamentary Under-Secretary of State for Justice (Dominic Raab)[ 336]. The latter also informs the House of the scrutiny override which occurred at that Council.

41.6 We note the update from the previous Government on the outcome of the March JHA Council and thank the new Secretary of State for Justice for his letter of 15 July updating us on the outcome of the June JHA Council. We would appreciate early receipt of updates in future to enable us to consider them more fully.

41.7 We consider that the Minister's update on the agreement of the General Approach is of a very general nature and does not refer in any detail to the text of the General Approach. We ask that the text be deposited with us and that, in his next update on the progress of trilogues the Minister explain in detail, with reference to that text, the nature of the "serious reservations" that persist. We have in mind, in particular, concerns relating to the Right to be Forgotten, the One-Stop Shop Mechanism and the nature of the liability of data controllers and processors and sanctions.

41.8 We understand that the Government was not in a position to seek a scrutiny waiver for the June JHA Council from the preceding Committee prior to dissolution and could not do so nearer the time of the Council, before our Committee was formed. But in this instance we question, given the seriousness of the Government's concerns about the General Approach text whether supporting it was the right approach, even if it represents the lesser of two evils compared with the European Parliament's position. We remain to be convinced that this unusual approach of supporting an unacceptable text will lead to greater negotiating influence over that text in trilogues than would follow from abstention or opposition. We would not want to see such an approach emulated more widely in Government. We therefore request that the Minister provide us with evidence, as the trilogues progress, of the influence that the UK has been able to exert through supporting the General Approach.

41.9 We note that the Minister is silent on the matter of document (b), the proposal for a Police and Criminal Justice Data Protection Directive. We request an update, in due course, on progress on that proposal under the Luxembourg Presidency.

41.10 We also ask that the Minister update us on the progress of negotiations of the "Safe Harbor" Agreement (see documents (c) and (d)) which regulates the transfer of data from EU citizens to US companies. We note that the European Commissioner for Justice, Vìra Jourová, had hoped negotiations would conclude by 28 May 2015. Does the Minister anticipate that the substance and timing of any negotiations will now need to take account of:

i)  the anticipated decision of the CJEU in the case of Schrems (C-362/14 ) in which it is being argued that the current "Safe Harbor" Agreement violates Articles 7 and 8 of the EU Charter of Fundamental Rights (right to private and family life and the protection of personal data); and

ii)  the replacement of the scheme for the collection of metadata by US intelligence agencies, including that of EU citizens transferred under Safe Harbor, under Section 215 of the U.S. Patriot Act 2001 with corresponding provisions of the new U.S. Freedom Act 2015?

41.11 Pending the Minister's response, we are drawing this Report to the attention of the Justice Committee and retaining all documents (a)-(d) under scrutiny.

Full details of the documents: (a) Draft Regulation on the protection of individuals with regard to the processing of personal data and on the free movement of such data: (33649), 5853/12 + ADDs 1-2, COM(12) 11; (b) Draft Directive on the protection of individuals with regard to the processing of personal data by competent authorities for the purposes of prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and the free movement of such data: (33646), 5833/12 + ADDs 1-2, COM(12) 10; (c) Commission Communication: Rebuilding Trust in EU-US Data Flows: (35608), 17067/13, COM(13) 846; (d) Commission Communication on the Functioning of the Safe Harbour from the perspective of EU Citizens and Companies Established in the EU: (35609), 17069/13, COM(13) 847.

Background and previous scrutiny

41.12 The background to documents (a) and (b), a detailed account of their provisions and the Government view of them is provided principally in the previous Committee's Fifty-ninth Report of 2010-12.[ 337] The Twenty-sixth Report of 2012-13[ 338] sets out our predecessors' summary and conclusions on the opinion obtained from the Justice Committee. An account of the background and contents of documents (c) and (d) and the Government view of them was set out in the Thirty-sixth Report of 2013-14.[ 339]

Previous Minister's letter of 18 March 2015

41.13 In this letter, the previous Minister of State for Justice and Civil Liberties (Simon Hughes) says that he writes to provide an update on the outcome of the March JHA and to anticipate the June JHA.


41.14 The former Minister says that the primary focus of discussions was Chapter II (general principles) and Chapters VI and VII (the one-stop shop mechanism).

41.15 Addressing Chapter II, he says:

    "On Chapter II, a caveated partial general approach was agreed at JHA Council albeit with some serious reservations from a number of Member States that placed heavy conditions on their willingness to compromise, including the ability to return to the text if need be. The UK abstained in this vote on the basis that the Government had not been given a scrutiny waiver from either Committee."

41.16 Turning to Chapters VI and VII on the one-stop shop mechanism, he reminds the preceding Committee that previously the then Government had been able to marshal support from other Member States to both a quantitative filter (a percentage of national data protection authorities would have to agree to a referral to the European Data Protection Board (EDPB) and a qualitative filter (only reasoned concerns would trigger referral). But at this JHA Council there was only support for a qualitative filter: a data protection authority would have to make a 'relevant and reasoned objection' before referral. He adds that the UK, supported by Ireland and Poland, expressed disappointment at the lack of the quantitative filter because it would lead to "an overly complex arrangement that will slow things down and complicate decision making". He hopes that an Irish proposal that the one-stop shop be reviewed two years after implementation, although not accepted at the meeting, might gain the future support of Member States, "given our substantial reservations about the current one-stop shop model".


41.17 He then anticipates the possibility of a General Approach supported by the majority of Member States at the June JHA Council, despite "growing concern that there remains a lot of work to do on the text before such an agreement can take place". However he adds:

    "Overall, I feel as if the current Council text is moving in the right direction. There is now a much more proportionate and risk-based approach as compared to the original Commission proposals and consequently I believe that the burdens will be less onerous than we originally feared. In addition, this Council text is much more balanced in its approach than the text which was agreed by the European Parliament last year, and it will remain a negotiating priority for the UK to preserve that balance in the text that goes forward for trilogue discussions later in the year. However, there still remains much to be worked upon in the coming weeks, including sections on the 'right to be forgotten' and on sanctions in addition to the possibility of returning to some of the other areas on which a partial general approach has been achieved in that past few months.

    "The UK, in common with most Member States believes that much more work needs to be done on the text. We are mindful also of the fact that the dossier remains under scrutiny in both Houses. At this time, because of the amount of outstanding work, it is not clear what the text that we will be asked to agree will look like and I would not wish to speculate. I am therefore not in a position to seek either a waiver or to lift the file from scrutiny, but I have asked my officials to keep your clerk updated during the election and post-election period. I will of course update your successor committee on progress of the file as soon as it is formed."

Minister's letter of 15 July 2015

41.18 The new Lord Chancellor and Secretary of State for Justice (Michael Gove) writes to update us on the outcome of the 15 June JHA Council. He explains that Lord Faulks, attending on his behalf, voted in favour of the General Approach which he recognises to be a breach of the scrutiny reserve resolution, occurring before our new Committee had been formed. In addition the Minister acknowledges that this was done despite the Government's "serious reservations". In this context, the Minister provides detailed reasons for the Government's actions which we reproduce in full:

    "Voting in favour of the General Approach, despite our serious reservations, will seek to maximise our influence during trilogue negotiations with the European Parliament. That means a greater chance of clarifying the exclusion of national security from the scope of this Regulation; continuing to resist attempts by the European Parliament to insert clauses that could damage intelligence and law enforcement co-operation with the US; minimise the burden on businesses; and ensuring the text does not damage growth or freedom of expression. Given this override of scrutiny, and in line with the Cabinet Office guidance, a statement will be issued to the House.

    "There have been some improvements to the Council text in terms of reducing the overall level of burden on business, although there are still areas of concern. I am also concerned about 'the right to be forgotten' where, even though the text purports to give assurances that freedom of expression is not restricted, the UK has strong reservations that, in practice, freedom of expression may be undermined. Spain also support our concern that the title is misleading. I also fear the One Stop Shop model is likely to lead to costly, protracted decision-making that is neither in the interests of individuals, nor businesses, which are also the concerns of Ireland and Poland.

    "During the Justice and Home Affairs Council meeting, Austria and Slovenia were the only two member states who voted against the Regulation. They believe that the Council text is a compromise too far and the changes are at the expense of individuals and prefer the European Parliament text. The European Parliament version of the text, which was agreed in March 2014, was heavily influenced by the fallout from Snowden and is widely perceived as anti-business as well as undermining vital processing that is legitimately possible at present.

    "Going forward the trilogue discussions will take into consideration the European Parliament text, which is significantly worse than the draft text agreed at Council. It introduces a higher burden ("explicit") for consent in all cases where this is the lawful ground for processing. Explicit consent also places additional restrictions on the processing of scientific and medical research that is likely, at best, to make vital processing in this sector, very difficult and at worse illegal. In addition, the European Parliament text has included a clause (the "anti-FISA clause") that will further restrict third country data transfers. Under this clause, if a business is ordered by a foreign court or authority to hand over personal data, the European Parliament text will prevent this, unless there is an existing Mutual Legal Assistance Treaty or similar international agreement in place, or unless the business has the permission of a European data protection authority. I oppose this, as I regard it as unworkable in practice and also because attempts to use it would put businesses in a difficult position having to decide which law to break.

    "It is the Government's overall aim to minimise the negative effects of the new Regulation on business and freedom of expression. The Regulation must promote rather than hinder the Digital Single Market and the competitiveness of the EU in a global digital market. The UK does not have an opt-out from the Regulation and agreement will be reached by Qualified Majority Voting (QMV), on which our position remains reserved."

Previous Committee Reports

(a) and (b): Thirty-six Report HC 219-xxxv (2014-15), chapter 11 (11 March 2015); Thirty-first Report HC 219-xxx (2014-15), chapter 5 (28 January 2015); Twenty-second Report HC 219-xxi (2014-15), chapter 9 (26 November 2014); Twelfth Report HC 219-xii (2014-15), chapter 8 (10 September 2014); Forty-seventh Report HC 83-xlii (2013-14), chapter 14 (30 April 2014); Thirteenth Report HC 83-xiii (2013-14), chapter 24 (4 September 2013); Eighth Report HC 83-viii (2013-14), chapter 11 (3 July 2013); Third Report HC 83-iii (2013-14), chapter 15 (21 May 2013); Thirty-first Report HC 86-xxxi (2012-13), chapter 7 (6 February 2013); Twenty-sixth Report HC 86-xxvi (2012-13), chapter 11 (9 January 2013); Eighth Report HC 86-viii (2012-13), chapter 5 (11 July 2012); Fifty-ninth Report HC 428-liv (2010-12), chapters 7 and 8 (14 March 2012); (c) and (d): Thirty-sixth Report HC 219-xxxv (2014-15), chapter 11 (11 March 2015); Thirty-first Report HC 219-xxx (2014-15), chapter 5 (28 January 2015); Twenty-second Report HC 219-xxi (2014-15), chapter 9 (26 November 2014); Twelfth Report HC 219-xii (2014-15), chapter 8 (10 September 2014) Forty-seventh Report HC 83-xlii (2013-14), chapter 14 (30 April 2014); Thirty-sixth Report HC 83-xxxiii (2013-14), chapter 9 (12 February 2014).

335   HC Deb, 23 June 2015, col 19WS.  Back

336   HC Deb, 16 July 2015, col 65WS. Back

337   Fifty-ninth Report HC 428-liv (2010-12), chapters 7 and 8 (14 March 2012). Back

338   Twenty-sixth Report HC 86-xxvi (2012-13), chapter 11 (9 January 2013). Back

339   Thirty-sixth Report HC 83-xxxiii (2013-14), chapter 9 (12 February 2014). Back

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Prepared 30 July 2015