ICO (UK) - Monetary Penalty Notice to Easylife Limited
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| ICO - Monetary Penalty Notice to Easylife Limited | |
|---|---|
 | |
| Authority: | ICO (UK) |
| Jurisdiction: | United Kingdom |
| Relevant Law: | Article 5(1)(a) GDPR Article 6 GDPR Article 9 GDPR Article 13 GDPR |
| Type: | Investigation |
| Outcome: | Violation Found |
| Started: | |
| Decided: | 04.10.2022 |
| Published: | |
| Fine: | 1,350,000 GBP |
| Parties: | Easylife Ltd. |
| National Case Number/Name: | Monetary Penalty Notice to Easylife Limited |
| European Case Law Identifier: | n/a |
| Appeal: | Unknown |
| Original Language(s): | English |
| Original Source: | ICO (in EN) |
| Initial Contributor: | Lauren |
The Information Commissioner’s Office (ICO) imposed a fine of £1,350,000 on Easylife, as it failed to collect consent and inform the customers about profiling of special category (health) data when customers purchased Easylife's products.
English Summary
Facts
The defendant, Easylife, is a catalogue retailer that sells health related services and products. It is considered as the data controller of customers' data.
The ICO investigation found that between August 2019 and 19 August 2020, when a customer purchased a "trigger product" from Easylife’s Health Club catalogue, the company would make assumptions about customers' medical conditions and then market health-related products to them without their consent. Easylife linked the trigger products to several health conditions which Easylife inferred that the customer was likely to have, and then triggered marketing calls through a third party telemarketing provider based on the transaction data. Overall, this incident affected 145,400 individual customers' personal data, including their names, telephone numbers, and special category data.
Holding
The ICO found that the transactional purchase data of Easylife's customers was personal data. The ICO became concerned that using transaction data to make inferences about health conditions could constitute profiling, and the inferences made about health conditions could indicate processing of special category data.
When Easylife used relevant transactional data to select customers for telemarketing, this constituted profiling. When Easylife used the transactional data to decide which products to market to which customers, based on its inferences of customer's health conditions, this constituted the processing of special category data, irrespective of Easylife's level of statistical confidence over the profiling.
The ICO held that Easylife breached Article 13 of the GDPR since the customers were not informed that their information would be used for profiling purpose. Easylife did not collect customer's explicit consent to process special category data as required by Article 9, instead it relied on legitimate interest. As a result it also breached Article 6 and Article 9 of the GDPR for not having lawful basis to process special category data. Since the individuals were not informed about profiling of special category data, the ICO held that Easylife conducted "invisible" processing of special category data and did not process the data fairly, lawfully or transparently pursuant to Article 5(1)(a) of the GDPR. Accordingly, the ICO imposed a fine of £1,350,000 on Easylife.
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English Machine Translation of the Decision
The decision below is a machine translation of the English original. Please refer to the English original for more details.
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Information Commissioner's Office
DATA PROTECTION ACT 2018 (PART 6, SECTION 155)
SUPERVISORY POWERS OF THE INFORMATION COMMISSIONER
MONETARY PENALTY NOTICE
To: Easylife Limited
Of: 94 Orchard Gate, Greenford, England, UB6 0QP
Introduction and Summary
1. This Information Commissioner ("the Commissioner") has decided to
issue Easylife Limited ("Easylife") with a monetary penalty under
section 155 of the Data Protection Act 2018 ("the DPA"). The penalty
notice imposes an administrative fine on Easylife, in accordance with
the Commissioner's powers under Article 83 of the General Data
Protection Regulation 2016 ("the GDPR"). The amount of the penalty is
£1,350,000 (one million, three hundred and fifty thousand pounds).
2. The penalty is in relation to contraventions of Article 5(l)(a) of the
GDPR and an ongoing incident during the period of 1 August 2019 to 19
August 2020 ("the relevant period") affecting personal data processed
by Easylife during the relevant period ("the Incident")1.
3. For the reasons set out in this Monetary Penalty Notice, the
Commissioner has found that Easylife failed to process personal data in
1The applicable legislation at the time of the Incident was the (EU) GDPR. The Commissioner was at
the material time the supervisory authority in respect of the (EU) GDPR.
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relation to data subjects lawfully, fairly, and in a transparent manner,
as required by Article S(l)(a) GDPR.
4. This Notice explains the Commissioner decision, including the
Commissioner's reasons for issuing the penalty and for the amount of
the penalty.
Legal Framework
Obligations of the Controller
5. Easylife is a controller for the purposes of the GDPR and the DPA,
because it determines the purposes and means of processing of personal
data (GDPR Article 4(7)).
6. "Personal data" is defined by Article 4(1) of the GDPR to mean:
"information relating to an identified or identifiable natural
person ('data subject'); an identifiable natural person is one
who can be identified, directly or indirectly, in particular by
reference to an identifier such as a name, an identification
number, location data, an online identifier or to one or more
factors specific to the physical, physiological, genetic,
mental, economic, cultural or social identity of that natural
person."
7. "Processing" is defined by Article 4(2) of the GDPR to mean:
"any operation or set of operations which is performed on
personal data or on sets ofpersonal data, whether or not by
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automated means, such as collection, recording,
organisation, structuring, storage, adaptation or alteration,
retrieval, consultation, use, disclosure by transmission,
dissemination or otherwise making available, alignment or
combination, restriction, erasure or destruction"
8. Article 4(4) of the GDPR defines profiling:
"'profiling' means any form of automated processing of
personal data consisting of the use of personal data to
evaluate certain personal aspects relating to a natural
person, in particularto analyse orpredictaspects concerning
that natural person's performance at work, economic
situation, health, personal preferences, interests, reliability,
behaviour, location or movements;"
9. Article 9 GDPR prohibits the processing of"special categories ofpersonal
data" unless certain conditions are met. The special categories of
personal data subject to Article 9 include"data concerning health or data
concerning a natural person's sex life or sexual orientation".
10. Controllers are subject to various obligations in relation to the processing
of personal data, as set out in the GDPR and the DPA. They are obliged
by Article 5(2) to adhere to the data processing principles set out in
Article 5(1) of the GDPR. Article 5(2) makes clear that the "controller
shall be responsible for, and be able to demonstrate compliance with,
paragraph 1 ('accountability')".
11. In particular, controllers are required to process personal data in relation
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to data subjects lawfully, fairly, and in a transparent manner, as required
by Article S(l)(a) of the GDPR. Article S(l)(a) ("lawfulness, fairness and
transparency") stipulates that:
"Personal data shall be [...] processed lawfully, fairly and in a
transparent manner in relation to the data subject"
12. Article 13 of the GDPR requires information to be provided where
personal data are collected from the data subject. Article 13(1)(3)
provides:
"Where personal data relating to a data subject are collected from
the data subject, the controller shall, at the time when personal
data are obtained, provide the data subject with all ofthe following
information: ... (c) the purposes of the processing for which the
personal data are intended as well as the legal basis for the
processing"
13. Article 13(3) of the GDPR requires:
"Where the controller intends to further process the personal data
for a purpose other than that for which the personal data were
collected, the controller shall provide the data subject prior to that
further processing with information on that otherpurpose and with
any relevant further information as referred to in paragraph 2."
14. Section 1 of Chapter 4 of the GDPR (namely Articles 24-31) addresses
the general obligations of controllers and processors. Article 24 sets out
the responsibility of controllers for taking appropriate steps to ensure
and be able to demonstrate that processing is compatible with the GDPR.
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Articles 28-29 make separate provision for the processing of data by
processors, under the instructions of the controller.
The Commissioner's Powers of Enforcement
15. The Commissioner is the supervisory authority for the UK, as provided
for by Article 51 of the GDPR.
16. By Article 57(1) of the GDPR, it is the Commissioner's task to monitor
and enforce the application of the GDPR.
17. By Article 58(2)(d) of the GDPR the Commissioner has the power to
notify controllers of alleged infringements of GDPR. By Article 58(2)(i)
he has the power to impose an administrative fine, in accordance with
Article 83, in addition to or instead of the other corrective measures
referred to in Article 58(2), depending on the circumstances of each
individual case.
18. By Article 83(1), the Commissioner is required to ensure that
administrative fines issued in accordance with Article 83 are effective,
proportionate, and dissuasive in each individual case. Article 83(2) goes
on to provide that:
"When deciding whether to impose an administrative fine
and deciding on the amount of the administrative fine in
each individual case due regard shall be given to the
following:
(a) the nature, gravity and duration of the
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infringement taking into account the nature scope or
purpose of the processing concerned as well as the
number of data subjects affected and the level of
damage suffered by them;
(b) the intentional or negligent character of the
infringement;
(c) any action taken by the controller or processor to
mitigate the damage suffered by data subjects;
(d) the degree of responsibility of the controller or
processor taking into account technical and
organisational measures implemented by them
pursuant to Articles 25 and 32;
(e) any relevant previous infringements by the
controller or processor;
(f) the degree of cooperation with the supervisory
authority, in order to remedy the infringement and
mitigate the possible adverse effects of the
infringement;
(g) the categories of personal data affected by the
infringement;
(h) the manner in which the infringement became
known to the supervisory authority, in particular
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whether, and if so to what extent, the controller or
processor notified the infringement;
(i) where measures referred to in Article 58(2) have
previously been ordered against the controller or
processor concerned with regard to the same subject
matter, compliance with those measures;
(j) adherence to approved codes of conduct pursuant
to Article 40 or approved certification mechanisms
pursuant to Article 42; and
(k) any other aggravating or mitigating factor
applicable to the circumstances of the case, such as
financial benefits gained, or losses avoided, directly or
indirectly, from the infringement."
19. Article 83(5) GDPR provides, inter alia, that infringements of the
obligations imposed by Article 5 GDPR on the controller and processer
will, in accordance with Article 83(2) GDPR, be subject to administrative
fines of up to €20 million or, in the case of an undertaking, up to 4% of
its total worldwide annual turnover of the preceding financial year,
whichever is higher.
20. The DPA contains enforcement provisions in Part 6 which are exercisable
by the Commissioner 2•Section 155 of the DPA sets out the matters to
which the Commissioner must have regard when deciding whether to
2Section 115 DPA establishes that the Commissioner is the UK's supervisory authority for the purposes
of the GDPR.
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issue a penalty notice and when determining the amount of the penalty
and provides that:
"(1) I f the Commissioner is satisfied that a person-
(a) has failed or is failing as described in section
149(2) ...,
the Commissioner may, by written notice (a "penalty
notice"), require the person to pay to the
Commissioner an amount in sterling specified in the
notice.
(2) Subject to subsection (4), when deciding whether to give
a penalty notice to a person and determining the amount of
the penalty, the Commissioner must have regard to the
following, so far as relevant-
(a) to the extent that the notice concerns a matter to
which the GDPR applies, the matters listed in Article
83(1) and (2) of the GDPR."
21. The failures identified in section 149(2) DPA 2018 are, insofar as relevant
here:
"(2) The first type offailure is where a controller or
processor has failed, or is failing, to comply with any of the
following-
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(a) a provision of Chapter II of the GDPR or Chapter 2
of Part 3 or Chapter 2 of Part 4 of this Act (principles
of processing);
.,.
(c) a provision of Articles 25 to 39 of the GDPR or
section 64 or 65 of this Act (obligations of controllers
and processors) [...] "
22. Schedule 16 includes provisions relevant to the imposition of penalties.
Paragraph 2 makes provision for the issuing of notices of intent to impose
a penalty, as follows:
"(1) Before giving a person a penalty notice, the
Commissioner must, by written notice (a "notice of intent")
inform the person that the Commissioner intends to give a
penalty notice."
The Commissioner's Regulatory Action Policy
23. Pursuant to section 160(1) DPA, the Commissioner published his
Regulatory Action Policy ("RAP") on 7 November 2018.
24. The process the Commissioner will follow in deciding the appropriate
amount of penalty to be imposed is described in the RAP from page 27
onwards. In particular, the RAP sets out the following five-step process:
a. Step 1. An 'initial element' removing any financial gain from the
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breach.
b. Step 2. Adding in an element to censure the breach based on its
scale and severity, taking into account the considerations
identified at section 155(2) - (4) DPA.
c. Step 3. Adding in an element to reflect any aggravating factors. A
list of aggravating factors which the Commissioner would take into
account, where relevant, is provided at page 11 of the RAP. This
list is intended to be indicative, not exhaustive.
d. Step 4. Adding in an amount for deterrent effect to others.
e. Step 5. Reducing the amount (save that in the initial element) to
reflect any mitigating factors, including ability to pay (financial
hardship). A list of mitigating factors which the Commissioner
would take into account, where relevant, is provided at page 11-
12 of the RAP. This list is intended to be indicative, not exhaustive.
Circumstances of the Failure: Facts
General Background
25. This Penalty Notice does not purport to identify exhaustively each and
every circumstance and document relevant to the Commissioner's
investigation. The circumstances and documents identified below are a
proportionate summary.
26. Easylife is a company based which sells household products through
catalogues. The brand was founded in 1992, Easylife was incorporated
on 3 September 2004 (at that date "Easylife Group Limited"). Easylife
has one active director registered at Companies House, Mr Gregory
Grant Caplan, who is the Chief Executive Officer. Mr Caplan is also a
director of "Easylife Holdings Limited", which is registered as a person
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of significant control of Easylife.
Discovery and Reporting of the Breach
27. The Information Commissioner's Office ("ICO") conducted
- due to the potential of direct marketing aimed at exploiting the
Covid-19 pandemic, which led to an investigation into
- ( ' ' - " ) , a telemarketing company promoting funeral plans
during the pandemic. This is turn led the Commissioner to investigate
Easylife, because - conducted outbound calling for Easylife. The
Commissioner's investigation into Easylife initially concerned potential
contraventions of the PECR, and that initial investigation raised concerns
of potential contraventions of the GDPR, which the Commissioner then
investigated separately.
28. The Easylife Health telemarketing campaign was conducted by a third
party ("1111"). The "trigger products" consisted of 122
different items sold in the Easylife catalogue. Once an individual had
purchased one of the trigger products from Easylife itself, this would
trigger a marketing call to the individual b y - using the data of which
Easylife was the controller. Easylife linked the trigger products to several
health conditions which Easylife inferred that the customer was likely to
have, which Easylife would then use as an opportunity to attempt to sell
the individual health supplement products which were alleged to help the
inferred health issues. Easylife explained that the selection of an
individualto receive a marketing call was based solely on transactional
data and that the data was provided to the call centre operated by -
on a weekly basis, with the selection of which individuals would receive
calls made on the basis of what products they had previously purchased.
Easylife stated that individuals who had previously opted out of
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marketing calls were removed from the call lists.
29. Easylife provided the ICO with marketing scripts selling glucosamine,
Cannabidiol, prostaphytol patches and bio-magnetic joint patches.
Easylife explained that the majority of the calls made during the relevant
period had been targeted at individuals who had been inferred to have
arthritis, for instance, a purchase of one of 80 of the 122 trigger products
would lead Easylifeto infer that the customer had arthritis who may then
call to sell them glucosamine patches. Glucosamine is a supplement
which is allegedly therapeutic for individuals with arthritis. The wording
of the calling scripts was clearly targeted to individuals with the health
conditions which Easylife was inferring. For example, the sales calls
marketing glucosamine to data subjects inferred to have arthritis said:
"Good morning, may I speak to XYZ please - Good morning my
name is XYZ and I am one of the Health Advisors giving you a
quick call from Easy Life. It is just a quick call as you ordered
recently one of our _ _ _ _ . Can I ask, did you order it to help
with arthritis in the - - ~ or is it an injury to the _ _ ? "
30. The script then posed questions about the arthritis, such as how long the
individual had had it, its location, the manifestation of symptoms, and
its effects on the individual. Then a sales pitch commenced:
"So do you mind if I make a simply suggestion? Many people who
suffer with Arthritis will wear Glucosamine Joint Patches.
Glucosamine is a natural ingredient that our own bodies produce
up to the age of 30, then as we get older our bones are less
protected and through wear and tear over the years, the bones
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and joints start to grind together which is the main cause ofpain,
swelling and stiffness."
31. The Commissioner became concerned that using data about purchasing
transactions in order to make inferences about health conditions could
constitute profiling, and the inferences made about health conditions
could indicate processing of special category data. A sale of glucosamine
patches to an individual who had previously ordered a trigger product
from which Easylife had inferred that the individual probably had arthritis
was therefore ostensibly linked to the success of the profiling which
Easylife had undertaken.
32. The transactional purchase data of Easylife's customers was personal
data. When Easylife used that transactional data to influence its
decisions on which customers to subject to telemarketing, this
constituted profiling. When Easylife used the transactional data to
influence its decisions on which products to market to which customers,
based on its inferences about a health condition which they were likely
to have, that constituted the processing of special category data,
irrespective of the level of statistical confidence which Easylife had in the
profiling which it had done.
33. Easylife relied on its ownlegitimate interests as the basis for conducting
this processing, using a small section of the Easylife privacy policy which
stated how personal data would be used:
"How will we use the information we collect about you?
We will do the following with your personal information.
• Store and use it to fulfil any order or service you've
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ordered from.
• Maintain is as evidence of your history with us.
• *Keep you informed about the status of your orders and
provide updates or information about associated products
or additional products, services, or promotions that might
be of interest to you.
• *Notify you of any product recalls or provide other
information concerning products you have purchased.
• *Improve and develop the products or services we offer by
analysing your information.
• *As customers or subscribers, we will sent you our
catalogues and information by post or email and may
telephone offering services or products."
34. Individuals were not informed by Easylife that their information would
be used for profiling them. Article 13 of GDPR requires data controllers
to inform individuals of the type of processing which will occur. Easylife
did not put in place the steps necessary to allow them to process
transactional sales data for the purposes of inferring health data and
then making targeted marketing calls for the purpose of selling items
which Easylife had decided were relevant to the inferred health
condition.
35. Easylife stated that no inferred health data was stored against any
individual because only transactional data was and that legitimate
interest assessments ("LIAs") had been carried out for the telephone
marketing campaigns. Easylife stated that the marketing campaign
included some calls intended to sell face masks during the pandemic.
36. Easylife provided the Commissioner with a LIA, which it said had also
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been provided to the Commissioner in 2019 in a previous unrelated
investigation. The LIA focused generally on Easylife cards and clubs and
was not specific to the Easylife Health campaign. The LIA document
contained 15 "queries", either a positive or negative response, some
guidance and a note on each query. Queries included, "Would processing
involve special categories of personal data?" which Easylife had
answered negatively, stating, "No these are generic offers available for
all customers." In response to the query, "Would customers expect their
data to be used for this purpose?", Easylife had answered affirmatively
on the basis that they had informed individuals of the purpose in their
privacy policy. Easylife should have been aware from the LIA that the
Health campaign would not be compliant with the GDPR, because it had
asked itself questions which, if answered accurately, would have
revealed the contravention. Easylife relied on an LIA which related to a
different marketing campaign, which did not involve profiling customers,
as the basis for the Health campaign, which did involve profiling
customers.
37. The data processing agreement between Easylife and - covered
confidentiality, security, sub-contracting and termination but omitted
any reference to the type of data processing which would occur.
Reporting the Breach to the Information Commissioner
38. One hundred and forty-five thousand, four hundred (145,400)
individuals were profiled for inferred health conditions. Zero complaints
were made to the ICO, although this was unsurprising to the
Commissioner because the contraventions involved invisible processing
about which Easylife never informed the individuals, with the
consequence that the individuals could not know that processing of their
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personal data and their special category data was occurring without a
proper basis.
The Commissioner's Investigation
39. Given the seriousness of its concerns in regard to the potential
contraventions of the GDPR by Easylife, the ICO sent Easylife an initial
investigation letter on 12 March 2021. The letter detailed the
Commissioner's concerns in regard to the processing which was
occurring and, in the light of the Commissioner's view that Easylife was
processing special category data without a legal basis, the Commissioner
also instructed Easylife to immediately stop the activity.
40. Easylife responded with an undated letter, which the Commissioner
received on 1 April 2021, stating that the Health campaign had started
in December 2016. It reiterated that 257,490 calls had been made,
which included repeat calls and repeat sales, but did not explain how
that figure correlated to the processing of data. The call figure provided
by Easylife differed from the number of calls which the ICO discovered
for the Health campaign through call detail records ("CDRs") obtained.
41. Easylife explained the sequence of processing as follows:
"(i) A person buys some products from Easylife Limited in one of
three ways: (i) by placing an order on line at our website
easylife.co.uk, (ii) by sending by post an order form cut out from
the back of one of our catalogues (see the example form annexed
to this letter) or (iii) by calling our call centre and placing an order
by phone.
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(ii) The customer's personal data is entered on to our CRM
system. This personal data includes the customer's contact details
as well as details of their order.
(iii) This information is then shared with a third-party
telemarketing company called -
( '._ - " ) with whom we have a data processing agreement. It is
provided to them weekly by our Data Management Company.
- sell, onbehalfof Easylife Limited, to the data provided, non
medical lifestyle beneficial products that are relevant to the
customer's transactional history.
( i v ) - s t o r e the data we provide to them on their secure server.
They selectpeople to call based on a multitude offactors including
the date of the last order placed, frequency of making purchases,
product purchased; currently and on historically and value of
orders placed. They also look at a customer's transaction history
to identify whether (or not) they have purchased particular
products.
(v) The selected people are then called with a view to selling them
relevant products based on the factors outlined in (iv) above."
42. Easylife maintained that its consent statement was relevant:
"As customers or subscribers, we will send you our catalogues and
information by post or email and may telephone offering services
or products such as our Health, Motor, Supercard, or Gardening
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Clubs. I f you would prefer not to receive these communications
please let us know (see below) or simply unsubscribe from any of
the communications you receive at the time."
43. Easylife stated that a former employee, who had previously been a
, had advised it that the consent statement was
a sufficient basis for the sales activity carried out by - to be
compliant. Further, Easylife said that it had a vulnerable persons policy
underpinning the sales calls because many customers were elderly and
were "often glad to talk to someone about their medical conditions". The
calls, Easylife said, were quickly terminated if there was the slightest
hint of embarrassment from the customer regarding their health
condition, but, as most were elderly, they welcomed the conversation.
44. Easylife informed the ICO that it had now in s tr u c te d - to cease the
processing and that in future it would stop the profiling element of the
Health telephone marketing campaign and would instead telephone
customers irrespective of whether or not the customer had purchased a
trigger product. Further, as a result of the ICO's investigation relating to the
PECR, Easylife was now screening calls against the TPS register. Easylife
and - offered to enter into written undertakings with the ICO to
confirm their new operating procedure.
45. The ICO declined the proffered undertakings.
46. The ICO's investigation revealed no evidence that Easylife had informed
individuals that their data might be used for health profiling. Easylife had
not informed the ICO how many individual customers it had profiled, and
had simply provided call figures and stated that some of the calls had
related to the sale of face masks.
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47. On 12 April 2021, the ICO asked Easylife to provide a definitive number
of how many individuals had been profiled during the marketing
campaign specific to the sale of health supplements.
48. In an undated letter which the ICO received on 19 April 2021 Easylife
explained that it had provided 428,531 individuals' data t o- between
1 August 2019 and 19 August 2020. This data was then "reviewed and
cleaned down" to 145,400 individuals' data, based on a multitude of
factors including "date of the last order placed, frequency of making
purchases, product purchased currently and on historical orders and
value of orders placed". Easylife then stated that a total of 257,490
attempted calls were made to those individuals.
49. Given that one factor was purchase of a trigger product, the ICO
considered that Easylife had profiled 145,400 individuals.
50. On 13 May 2021, the ICO wrote to inform Easylife that the investigation
had concluded.
51. On 10 August 2022, the Commissioner issued Easylife with a Notice of
Intent to issue a monetary penalty. The Notice related to the facts set
out above, and concerned non-compliance with the GDPR by way of
unlawful processing of special category data.
52. On 2 September 2022, Easylife submitted Representations ("the
Representations") to the Commissioner, making a range of legal and
factual arguments, accompanied by documentary evidence. The
Commissioner has considered the Representations in making his final
decision inthis case.
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Personal Data Involved in the Incident
53. The data affected by this incident comprised the personal data of
145,400 individual customers of Easylife, consisting of their names and
telephone numbers, and the special category data of those 145,400
individuals, consisting of health conditions which Easylife had inferred
that they probably had.
The Contravention of Article S (l)(a ) of the GDPR
54. The Commissioner has considered whether the facts set out above
constitute a contravention of the data protection legislation.
55. For the reasons set out below, the Commissioner has taken the view
from his investigation that this breach occurred as a result of serious
deficiencies in the way in which Easylife collected, processed and used
the personal and special category data of 145,400 individuals.
Factors relevant to whether a penalty is appropriate, and if so, the
amount of the penalty
56. The Commissioner has considered the factors set out in Article 83(2) of
the GDPR in deciding whether to issue a penalty. For the reasons given
below, he is satisfied that (i) the contraventions are sufficiently serious
to justify issuing a penalty in addition to exercising his corrective
powers; and (ii) the contraventions are serious enough to justify a
significant fine.
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(a) the nature, gravity and duration of the infringement taking into
account the nature, scope or purpose of the processing concerned as
well as the number of data subjects affected and the level of damage
suffered by them
Nature:
57. Easylife conducted profiling of customers which processed special
category data. The Commissioner does not accept Easylife's arguments
set out in the Representations that it was not processing special category
data.
58. The Commissioner does not consider that the evidence supports Easylife's
argument that it was selling lifestyle products and did not make or use
inferences about the data subjects' health. The Commissioner has decided
that the transactional data from which Easylife made and relied on
inferences was special category data, which Easylife unlawfully processed.
Easylife used the transactional data to infer that the customer probably
had a particular health condition, to alleviate which specific products were
then marketed to the data subject, in direct marketing telephone calls.
59. The Commissioner considers that his guidance on special category data
properly reflects the laon the inference of special category data.
60. The recent judgment of the Court of Justice of the European Union inOT v
Vyriausioji tarnybines etikos komisija (Case C-184/20, 1 August 2022)
confirms that the protections which the GDPR gives to data subjects'
special category data, including health data, extend beyond inherently
sensitive data to cover data revealing health data indirectly, following
an intellectual operation involving deduction and cross-referencing.
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61. Article 9 of the GDPR provides that special category data may not be
processed except under specific circumstances. The only circumstances
in which Easylife could have engaged in processing of special category
data in the context of its Health campaign was consent. Easylife did not
collect consent to process special category data, instead relying on
legitimate interest. As a result, Easylife had no lawful basis to process
the data and contravened Article 6 and Article 9 of the GDPR.
Furthermore, the individuals were not informed that any profiling of
special category data would occur and therefore the individuals could not
have reasonably expected it to happen. Easylife conducted invisible
processing of special category data, and, as such, Easylife did not
process the data fairly, lawfully or transparently as required by Article
S(l)(a) of the GDPR.
62. In order to process this data lawfully, Easylife would have had to collect
explicit consent for the profiling from the data subjects and to update its
privacy policy to indicate that special category data was to be processed
by consent. Easylife's omission to do this resulted in the contravention
occurring and also involved a contravention of Article 13(1)(c) of the
GDPR, which required Easylife to provide a data subject with a privacy
notice which informs them of the purposes of the processing for which
the personal data are intended as well as the legal basis for the
processing.
63. The Commissioner does not accept Easylife's argument, made in the
Representations, that it had the requisite consent to process special
category data because it had notified customers that it would be using
customers' personal data to notify them of products "that might be of
interest to you." The Commissioner does not consider that any customer
would have understood the privacy policy to mean that Easylife was going
to process their special category data and then use it in a direct marketing
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telephone campaign.
64. According to the evidence which Easylife provided during the
investigation, the contravention resulted in several hundred thousand
attempted marketing calls being made to individuals whom Easylife had
profiled as having health conditions. These calls were intrusive in nature
because they were based on health conditions which Easylife had
inferred whilst not having informed the individuals that it was going to
make such inferences.
Gravity:
65. The contravention is serious because it consisted of unlawful invisible
processing of special category data and because of the distress to
individuals which resulted from it.
66. Easylife's target market was older people with long-term health
conditions. Individuals in that age range, who grew up in a previous era
in which electronic processing of personal data did not occur, are less
likely than younger individuals to have the knowledge or ability to raise
a complaint about unlawful processing of their data.
67. Itis not possible for the ICO to quantify the level of damage caused,
because of the invisible nature of the processing by Easylife. The damage
from harassment and targeting of potentially vulnerable individuals could
be wide-ranging, not least financial damage.
Number of data subjects:
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68. Easylife collected, processed and used the personal and special category
data of 145,400 individuals.
Duration:
69. The contravention continued for over a year, between 1 August 2019
and 19 August 2020.
(b) the intentional or negligent character of the infringement
70. The Commissioner considers that the contraventions were negligent
because Easylife appeared unaware that it was processing special
category data. Nevertheless, Easylife has a poor track record of
regulatory compliance, having previously been investigated by the
Commissioner for data protection concerns in 2019, having entered an
undertaking with Trading Standards, and having been subject to an
investigation byhe Commissioner into contravention of the PECR which
ledto his investigation into compliance with the GDPR. Therefore, the
negligence underpinning the breach is severe. Easylife should have
known that the breach would occur, given that it had previously
completed LIAs intended to avoid such contraventions in other marketing
campaigns, which explicitly referred to special category datItappears
that Easylife misapplied the LIA which had been devised for a different
marketing campaign to the Health campaign and thus failed to take the
opportunity to interrogate Easylife's legitimate interests in the Health
campaign and to understand what steps would have been required in
order to conduct the Health campaign in compliance with the GDPR.
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(c) any action taken by the controller or processor to mitigate the
damage suffered by data subjects
71. Upon receiving notice from the Commissioner that he believed Easylife
was processing special category data, Easylife agreed to stop
immediately such profiling and required - to stop the Health
campaign in its current format, and to continue the campaign without
the element of profiling. Easylife informed the Commissioner that it
would work on several remedial measures, namely:
(i) Implementation of a new Customer
Relationship Management system;
(ii) Strengthening its Service Level Agreements
and contracts with data processors;
(iii) Introducing TPS screening to comply with the PECR;
(iv) Changing the wording of the consent statements offered
to customers.
72. Although Easylife agreed to stop the profiling, the Commissioner noted
that Easylife has been very reactive in its approach to compliance and
only seems to make changes to its practices in order to comply with the
law when failings are discovered, and changes are required, by a
regulator.
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(d) the degree of responsibility of the controller or processor taking
into account technical and organisational measures implemented by
them pursuant to Articles 25 and 32
73. Article 25 of the GDPR requires organisations to implement data
protection by both design and default. Data protection by design
necessitates the consideration of privacy and data protection at the
design phase of any system, service, product or process (and
subsequently throughout its lifecycle). Data protection by default
requires organisations to ensure that they only process data necessary
to achieve a specified purpose.
74. With regard to Easylife's compliance with the above article, it is the
Commissioner's view that Easylife's failure to conduct a Data Protection
Impact Assessment ("DPIA") is a notable failing, and that such a step
may have assisted in preventing this contravention.
75. Article 32 of the GDPR requires organisations to implement appropriate
technical and organisational measures to ensure a level of security
appropriate to the risks presented by their processing; to include the
potential impacts these risks may have on the rights and freedoms of
natural persons.
76. The Commissioner does not consider that Article 32 is relevant to its
failure.
(e) any relevant previous infringements by the controller or
processor
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77. Not applicable.
(f) the degree of cooperation with the supervisory authority, in
order to remedy the infringement and mitigate the possible adverse
effects of the infringement
78. Easylife have co-operated reasonably with the ICO. Upon receiving the
ICO's investigation department's views in regard to the contravention,
Easylife sought to mitigate the risk of profiling by completely ceasing
that activity. Easylife also sought to remedy its non-compliance with the
PECR which was established during the ICO's investigation into the
contravention of the PECR, which had led the ICO to open its
investigation into contravention of the GDPR.
(g) the categories of personal data affected by the infringement
79. The categories of personal data affected is set out above at paragraph
52 above and include special category data relating to health.
(h) the manner in which the infringement became known to the
supervisory authority, in particular whether, and if so to what extent,
the controller or processor notified the infringement
80. The infringement of the GDPR by Easylife became known to the ICO
during the course of the ICO's own investigation into potential
contraventions of the PECR. Easylife was ignorant of the infringement
until it became known to Easylife through notification by the ICO.
81. Zero complaints were made to the ICO because the contraventions
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involved invisible processing about which Easylife never informed the
individuals, with the consequence that the individuals could not know
that processing of their personal data and their special category data
was occurring without a proper basis.
(i) where measures referred to in Article 58(2) have previously
been ordered against the controller or processor concerned with
regard to the same subject-matter, compliance with those measures
82. Not applicable.
(j) adherence to approved codes of conduct pursuant to Article 40
or approved certification mechanisms pursuant to Article 42
83. Not applicable.
(k) any other aggravating or mitigating factor applicable to the
circumstances of the case, such as financial benefits gained, or losses
avoided, directly or indirectly, from the infringement
84. The Commissioner has considered the following aggravating feature
in this case:
• The aim of the Health marketing campaign was to use the
unlawful processing to gain an advantage over rival businesses
and sell targeted products to individuals.
85. The Commissioner took into account the following mitigating
features:
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• Easylife has informed the ICO of its intention to:
- Implement a new Customer Relationship Management
system at the cost o f - ·
- Strengthen its Service Level Agreements and contracts
with data processors.
Summary and Penalty
86. For the reasons set out above, the Commissioner has decided to impose
a financial penalty on Easylife. Taken together the findings above
concerning the infringement, its likely impact, and the fact that Easylife
failed to comply with its GDPR obligations, the Commissioner has
decided to apply an effective, dissuasive and proportionate penalty
reflecting the seriousness of the breach which has occurred.
Calculation of Penalty
87. The Commissioner considers that imposition of a financial penalty would
be an effective and proportionate action to ensure future compliance,
given that previous informal action has failed. A financial penalty would
be dissuasive not only to Easylife but to the whole mail order catalogue
industry.
88. The Commissioner considered that the appropriate penalty amount may
be up to 4% of worldwide annual turnover.
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89. Following the Five Step process set out in the RAP the calculation of the
penalty is as follows.
90. Step 1: An initial element removing any financial gain from the breach.
The Commissioner has decided to impose an administrative fine on
Easylife because a large number of data subjects (145,400) have been
affected; the incident involves special category data; there has been
repeated or wilful misconduct or serious failures to take appropriate
steps to protect personal data; there has been a failure to apply
reasonable measures (including relating to privacy by design) to
mitigate any breach; and it is highly likely that Easylife has benefited
from a financial gain by committing the contravention.
91. The Commissioner was unable to initially identify or calculate any
financial gain which Easylife may have made from its contravention of
the GDPR, and proceeded to determine the provisional penalty figure
without imposing an initial element to remove any financial gain from
the breach.
92. The Commissioner has carefully considered the Representations made
by Easylife on the level of the financial penalty. In particular, the
Commissioner has noted that Easylife has calculated that it made a
profit of during the relevant period from the activities of
- in the Health telemarketing campaign. The Commissioner
acknowledges this disclosure, but does not amend his provisional
decision not to impose an initial penalty amount removing any financial
gain.
93. Step 2: Adding in an element to censure the breach based on its scale
and severity, taking into account the considerations identified at section
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155(2)-(4) DPA. This refers to and repeats the matters listed in A83(1)e
and (2)as set out above.
94. The details are set out above and take into account: (a) the matters set
out above at paragraphs 54 - 85, (b) the matters referred to in this
section, and (c) the need to apply an effective proportionate and
dissuasive fine.
95. Considering the nature, gravity, and duration of the failure, the
Commissioner finds that this breach involved the processing of special
category data of 145,400 individuals who were profiled for inferred
health conditions. Thegravity includes the impact on elderly, potentially
vulnerable people, some with long-term health conditions. Easylife
conducted invisible processing, with assumptions being made about
health conditions based on purchased goods. The Commissioner is
concerned about the on-going potential impact with regards to those
individualswho may not be aware this is happening as they have not
been adequately informed. The duration of the failure covered 12
months.
96. The Commissioner considers that a penalty of £750,000 would be an
appropriate starting point for its consideration under Step 2, before
further adjustment within Step 2 and before adjustment in accordance
with Steps 3-5 below.
97. In light of the negligence of Easylife in omitting to obtain explicit consent
to process the special category data, and given its attendance at a
previous compliance meeting, the Commissioner considers it appropriate
to increase the penalty starting point by £50,000 to £800,000.
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98. He then considers it appropriate to decrease the penalty by £50,000 to
£750,000 because of the action taken by Easylife to mitigate the damage or
distress caused, specifically that Easylife has implemented a £200,000 CRM
system, introduced improved SLAs and contracts with data processors,
and worked on improving consent statements. Easylife has also stated
to the Commissioner that it has ceased the practice of profiling
individuals.
99. The Commissioner increases the penalty by £100,000 to £850,000
because of Easylife's responsibility taking into account technical and
organisational measures which it should have implemented. Easylife
conducted no data protection impact assessments as it should have done
under Article 25 of the GDPR. Easylife instead relied on legitimate
interests, misapplying an analysis which it had done in the past for a
different marketing campaign which did not involve profiling.
100. The Commissioner has gone on to consider the following relevant factors
but does not consider in this case that they should result in a change to
the figure of £850,000:
any relevant previous failures by the controller or
processor;
- the degree of co-operation with the Commissioner, in
order to remedy the failure and mitigate the possible
adverse effects of the failure;
- the categories of personal data affected by the failure;
- the manner in which the infringement became known to
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the Commissioner, including whether, and if so to what
extent, the controller or processor notified the
Commissioner of the failure;
- the extent to which the controller or processor has
complied with previous enforcement notices or penalty
notices;
- adherence to approved codes of conduct or certification
mechanisms;
- any other aggravating or mitigating factor applicable to
the case, including financial benefits gained, or losses
avoided, as a result of the failure (whether directly or
indirectly).
101. The Commissioner has then gone on to consider whether the penalty
amount of £850,000 would be effective, proportionate, and dissuasive.
102. The Commissioner considers that available accounts include accounts
up to the period ending 31 December 2020 and show a turnover of
£51,631,296. These accounts were filed at Companies House on 6
October 2021. The next accounts due are scheduled to be filed by 29
December 2022.
103. The Commissioner has considered the financial documentation provided
with the Representations from Easylife. In particular, he has considered
the draft accounts for the year to December 2021, the management
accounts for the first six months of 2022 and the administration
documents concerning a key supplier of Easylife. The Commissioner also
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considered Easylife's arguments that it had an exceptionally profitable
year in 2020 due the pandemic. The Commissioner noted that Easylife
estimated turnover of around £26,000,000 for the year to December
2022, which would be likely to incur a substantial loss, perhaps in
excess of £2,000,000, and Easylife had concerns about increases in
inflation, transportation costs, overheads and national insurance. The
Commissioner also took account of an historic disputed claim against
Easylifefrom a debtor in administration, which may still be payable by
Easylife.
104. On the basis of the available information, the Commissioner does not
consider that a penalty of £850,000 would be effective, proportionate
or dissuasive and accordingly increases the penalty by £500,000 to
£1,350,000.
105. This amount is considered appropriate to reflect the seriousness of the
breach and takes into account in particular the need for the penalty to
be effective, proportionate and dissuasive.
106. Step 3: Adding in an element to reflect any aggravating factors.
Following his consideration of the aggravating factors set out above, the
Commissioner considers no further aggravating factors had a material
impact on the severity of the contravention and so does not increase the
penalty amount from £1,350,000 at this step.
107. Step 4: Adding an amount for deterrent effect to others. The
Commissioner considers that this requirement has already been
addressed at Step 2, and accordingly does not propose to increase the
penalty at this step.
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108. Step 5: Reducing the amount to reflect any mitigating factors including
ability to pay. The Commissioner considered the most recently available
financial evidence at Step 2. Easylife was also invited to provide
financial evidence in representations. The Commissioner has taken
account of the Representations received from Easylife on 2 September
2022 in regard to ability to pay a monetary penalty at Step 2. After
considering all the evidence concerning Easylife's ability to pay, the
Commissioner concluded that £1,350,000 remained an appropriate
penalty amount.
The amount of the penalty
109. For the reasons explained above, the Commissioner is satisfied that the
conditions from the factors set out in Article 83(2) of the GDPR have
been met in this case and that he has adopted fair procedure. The latter
has included the issuing of a Notice of Intent, in which the Commissioner
set out his preliminary thinking. In reaching his final view, the
Commissioner has taken into account the Representations made by
Easylife onthis matter.
110. In making his decision, the Commissioner has also had regard to the
factors set out in s108(2)(b) of the Deregulation Act 2015; including:
the nature and level of risks associated with non-compliance, including
the risks to economic growth; the steps taken by the business to
achieve compliance and reasons for its failure; the willingness and
ability of the business to address non-compliance; the likely impact of
the proposed intervention on the business, and the likely impact of the
proposed intervention on the wider business community, both in terms
of deterring non-compliance and economic benefits to legitimate
businesses.
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111. Taking into account all of the factors set out above, the Commissioner
has decided to impose a penalty on Easylife Limited of £1,350,000
(one million, three hundred and fifty thousand pounds).
Conclusion
112. The monetary penalty must be paid to the Commissioner's office by
BACS transfer or cheque by 4 November 2022 at the latest. The
monetary penalty is not kept by the Commissioner but will be paid
into the Consolidated Fund which is the Government's general bank
account at the Bank of England.
113. There is a right of appeal to the First-tier Tribunal (Information Rights)
against:
(a) The imposition of the penalty; and/or,
(b) The amount of the penalty specified in the penalty notice
114. Any notice of appeal should be received by the Tribunal within 28 days
of the date of this penalty notice.
115. The Commissioner will not take action to enforce a penalty unless:
• the period specified within the notice within which a penalty must
be paid has expired and all or any of the penalty has not been
paid;
• all relevant appeals against the penalty notice and any variation
of it have either been decided or withdrawn; and
• the period for appealing against the penalty and any variation of
it has expired
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Information Commissioner's Office
116. In England, Wales and Northern Ireland, the penalty is recoverable by
Order of the County Court or the High Court. In Scotland, the penalty
can be enforced in the same manner as an extract registered decree
arbitral bearing a warrant for execution issued by the sheriff court of
any sheriffdom in Scotland.
117. Your attention is drawn to Annex 1 to this Notice, which sets out details
of your rights of appeal under s.162 DPA 2018.
Dated the 4 thday of October 2022.
Andy Curry
Head of Investigations
Wycliffe Housemmissioner's Office
Water Lane
Wilmslow
SK9shSAF
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ANNEX 1
Rights of appeal against decisions of the Commissioner
1. Section 162 of the Data Protection Act 2018 gives any person upon
whom a penalty notice or variation notice has been served a right of
appeal to the First-tier Tribunal (Information Rights) (the 'Tribunal')
against the notice.
2. Ifyou decide to appeal and if the Tribunal considers:-
a) that the notice against which the appeal is brought is not in
accordance with the law; or
b) to the extent that the notice involved an exercise of discretion by
the Commissioner, that she ought to have exercised her
discretion differently,
the Tribunal will allow the appeal or substitute such other decision as
could have been made by the Commissioner. In any other case the
Tribunal will dismiss the appeal.
3. You may bring an appeal by serving a notice of appeal on the Tribunal
at the following address:
GRC & GRP Tribunals
PO Box 9300
31 Waterloo Way
Leicester
LEl 8DJ
Telephone: 0203 936 8963
Email: grc@justice.gov.uk
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a) The notice of appeal should be sent so it is received by the
Tribunal within 28 days of the date of the notice.
b) Ifyour notice of appeal is late the Tribunal will not admit it
unless the Tribunal has extended the time for complying with this
rule.
4. The notice of appeal should state:-
a) your name and address/name and address of your representative
(if any);
b) an address where documents may be sent or delivered to you;
c) the name and address of the Information Commissioner;
d) details of the decision to which the proceedings relate;
e) the result that you are seeking;
f) the grounds on which you rely;
g) you must provide with the notice of appeal a copy of the penalty
notice or variation notice;
h) if you have exceeded the time limit mentioned above the notice
of appeal must include a request for an extension of time and the
reason why the notice of appeal was not provided in time.
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5. Before deciding whether or not to appeal you may wish to consult yourn Commissioner's Office
solicitor or another adviser. At the hearing of an appeal a party may
conduct his case himself or may be represented by any person whom
he may appoint for that purpose.
6. The statutory provisions concerning appeals to the First-tier Tribunal
(General Regulatory Chamber) are contained in sections 162 and 163
of, and Schedule 16 to, the Data Protection Act 2018, and Tribunal
Procedure (First-tier Tribunal) (General Regulatory Chamber) Rules
2009 (Statutory Instrument 2009 No. 1976 (L.20))
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