Article 56 GDPR: Difference between revisions

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The rules on the lead supervisory authority and the one-stop-shop mechanism should not apply where the processing is carried out by public authorities or private bodies in the public interest. In such cases the only supervisory authority competent to exercise the powers conferred to it in accordance with this Regulation should be the supervisory authority of the Member State where the public authority or private body is established.
The rules on the lead supervisory authority and the one-stop-shop mechanism should not apply where the processing is carried out by public authorities or private bodies in the public interest. In such cases the only supervisory authority competent to exercise the powers conferred to it in accordance with this Regulation should be the supervisory authority of the Member State where the public authority or private body is established.
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==Commentary==   
==Commentary==
'''Overview'''
 
In cross-border cases, all SAs could potentially be competent according to Article 55. For this reason, Article 56(1) establishes a specific mechanism to solve the conflicting competences of the SAs involved. Article 56(1) identifies the lead SA, which is the SA where the controller or the processor have their main establishment. The lead SA will in principle be in charge to lead the cooperation with other SAs under the cooperation mechanism of Article 60 (also called the “one-stop-shop”).
 
Article 56(2) to (6) provides an exception to the cooperation mechanism when the processing at stake has only a local impact (the so-called “local cases”).
 
Article 56(2) to (6) provides an exception to the cooperation mechanism when the processing at stake has only a local impact (the so-called “local cases”).
 
 
'''Article 56(1) Designation of the lead SA and the cooperation mechanism'''
 
The cooperation mechanism will be triggered (i) in case of cross border processing, and (ii) when the controller or processor has a main establishment in the EU. In such a case, Article 56(1) lays down the rule for the designation of the lead SA, which will be in charge of the cooperation procedure under Article 60, but also the sole interlocutor of the controller or processor.
 
Even in the case of a cross border processing, the cooperation procedure will not apply in three cases: under Article 56(2) (“local cases”), under Article 66 (urgency procedure)<ref>CJEU, 15 June 2021, ''Facebook c. APD'', C-645/19, §§ 58-59</ref> and also under Article 55(2) (processing for public interest or in line with a legal obligation).<ref>See ''Robert,'' « Les autorités de contrôle dans le nouveau règlement général », in Docquir, « Vers un droit européen de la protection des données », margin n° 57-60 (Brussels, Larcier, 2017)</ref>
 
 
'''''1) Identification of a cross-border processing'''''
 
According to the wording of Article 56(1), the competence of the lead SA and the cooperation mechanism of Article 60 will be triggered in the case of a cross-border processing. Assessing whether the processing at stake is cross-border is therefore a first step.
 
The definition of cross-border processing is provided by Article 4(23) which stipulates that such a processing:
 
''a)     takes place in the context of the activities of establishments in more than one Member State of a controller or processor in the Union where the controller or processor is established in more than one Member State; or''
 
''b)    takes place in the context of the activities of a single establishment of a controller or processor in the Union but which substantially affects or is likely to substantially affect data subjects in more than one Member State.''
 
In other words, the processing by a controller only established in one Member State ''and'' which substantially only affects the individuals in this Member State will not trigger the one-stop-shop procedure under Article.
 
In all other cases, the processing shall be considered as cross-border, if there is at least one establishment of the controller in the EU and if the activities of this establishment are linked to the processing at stake. That consequence was intentional since the legislator wanted to encourage the controllers to be established in the EU to have the benefits of the one-stop-shop mechanisms.
 
''Context of the activities''
 
The meaning of “the context of the activities” was already developed by the CJEU. The Court built on a broad definition of “establishment” and held that intending to promote and sell advertising space by an establishment in a Member State of a third country undertaking to make the latter profitable is carried out “in the context of the activities” of that establishment.<ref>See CJEU, 13 May 2014, ''Google Spain'', C-131/12; CJEU, 1 October 2015, ''Weltimmo'', C-230/14. </ref>  The EDPB also confirmed that this notion should not be interpreted to restrictively considering the view to fulfill the objective of ensuring effective and complete protection.<ref>See EDPB, Guidelines 3/2018 on the territorial scope of the GDPR (Article 3), version 2.1, 12 November 2019, p. 7.</ref>
 
''Substantial effect''
 
The notion of “substantial effect” on data subjects as mentioned by Article (23)(b) is not defined in the GDPR. In its guidelines (endorsed by the EDPB), the Article 29 Data Protection Working Party considered that the number –even large) of affected individuals in several Member States is not decisive. Rather, the Working Party developed a following, non-exhaustive list of criteria that will be taken into account on a case by case basis.<ref>Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017, WP 244 rev.01, p. 4, as endorsed by the EDPB on 25 May 2018.</ref>
 
The guidelines suggest to take into account the context of the processing, the type of data, the purpose of the processing and other factor factors, such as potential discrimination, reputational damage, impact on the well-being or involvement of special categories of data.
 
 
'''''2) Identifying a main establishment'''''
 
If a controller or a processor has establishments in more than one Member States, identifying its “main establishment” is the first step to recognize the lead supervisory authority in a cross-border processing. Note that the main establishment is defined for each processing operation. Therefore, there may be several main establishments, for example if the decisions regarding the different processing operations is done by different establishments of the controller.<ref>Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017. WP 244 rev.01, p. 5, section 2.1.</ref>
 
The Article 29 Working Party stressed that the GDPR does not allow “forum shopping”. It is a role of the SAs to properly define the main establishment of a controller according to objective criteria and subsequently determine the lead authority. According to the A29WP guidelines, “''conclusions cannot be based solely on statements by the organisation under review. The burden of proof ultimately falls on controllers and processors to demonstrate to the relevant supervisory authorities where the relevant processing decisions are taken and where there is the power to implement such decisions.'' (...) ''The lead supervisory authority, or concerned authorities, can rebut the controller's analysis based on an objective examination of the relevant facts, requesting further information where required''.”<ref>Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017. WP 244 rev.01, p. 7. </ref>  The GDPR introduces separate criteria for the main establishment of a processor and of a controller.
 
The SAs will cooperate to determine the lead authority. In the event of conflicting views on the lead supervisory authority, the case may be referred to the EDPB under Article 65(1)(b).
 
''Notion of establishment''
 
Recital 22, following the CJEU ruling in ''Weltimmo'' defines “establishment” as “''the effective and real exercise of activity through stable arrangements''”.<ref>CJEU, 1 October 2015, ''Weltimmo'', C-230/14, par. 31.</ref>  The legal form of such arrangements is irrelevant. As the Court further specified, the presence of only one representative can, in some circumstances, suffice to constitute a stable arrangement if that representative acts with a sufficient degree of stability through the presence of the necessary equipment for provision of the specific services concerned in the Member State in question.<ref>CJEU, 1 October 2015, ''Weltimmo'', C-230/14, par. 30.</ref>
 
 
'''''Main establishment of a controller'''''
 
''Main Establishment of a controller'' –''place of central administration''
 
As a general rule, as per Article 4 (16)(a) GDPR, the main establishment of a controller is the place of its central administration in the Union. This is however a rebuttable presumption, since another establishment can also be the main establishment, according to Article 4(16) GDPR, when ''“the decisions on the purposes and means of the processing of personal data are taken in another establishment of the controller in the Union and the latter establishment has the power to have such decisions implemented, in which case the establishment having taken such decisions is to be considered to be the main establishment”''. In other words, in order to determine the main establishment of a controller, it is necessary to first find its place of central administration – “''the place where decisions about the purposes and means of the processing of personal data are taken and this place has the power to have such decisions implemented''”.<ref>Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017, WP 244 rev.01, p. 5, section 2.1.</ref>
 
''Main establishment is not a place of a central administration''
 
If a controller’s main establishment is not the place of its central administration in the EU, it is necessary to identify the establishment where “''the effective and real exercise of management activities that determine main decisions as to the purposes and means of processing through stable arrangements, take place''”.<ref>Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017, WP 244 rev.01, p. 6, section 2.1.1.</ref>  The presence and use of technical means and technologies for processing personal data or processing activities do not in themselves, constitute a main establishment and are therefore not determining criteria for a main establishment. See Recital 36 GDPR
 
The Article 29 Working Party developed a following, not exhaustive list of questions to determine a controller’s main establishment in cases where it is not the place of its central administration in the EU:
 
* Where are decisions about the purposes and means of the processing given final “sign off”?
* Where are decisions about business activities that involve data processing made?
* Where does the power to have decisions implemented effectively lie?
* Where is the Director (or Directors) with overall management responsibility for the cross border processing located?
* Where is the controller or processor registered as a company, if in a single territory?” Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017, WP 244 rev.01, p. 7, section 2.1.1.  
 
In the case of a group of undertaking with a headquarter in the EU, the main establishment will be presumed to the decision-making center relating to the processing of personal data.<ref>Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017, WP 244 rev.01, p. 7, section 2.1.2.</ref>  However, if the decisions relating to the processing are taken by another establishment of the controller in the Union, the later should be considered the main establishment.<ref>For criteria taken into account by the Irish SA to conclude that Twitter had its main establishment in Ireland, see EDPB, Decision 01/2020 on the dispute arisen on the draft decision of the Irish Supervisory Authority regarding Twitter International Company under Article 65(1)(a) GDPR, adopted on 9th November 2020, §34, available on <nowiki>https://edpb.europa.eu/sites/default/files/files/file1/edpb_bindingdecision01_2020_en.pdf</nowiki>.</ref>
 
Some difficulties may arise when none of the EU establishments are taking decisions about the processing (even with a headquarter in the EU). In such a case, significantly called “borderline cases” by the Article 29 Working Party<ref>Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017. WP 244 rev.01, p. 8, section 2. 2</ref>, the GDPR does not provide for a clear answer. While the GDPR wants to encourage the non EU controller to be established in the EU to benefit from the one-stop-shop, forum shopping should be avoided and it would be too easy to pretend that decision-making is made in the EU while the decisions are actually taken in another establishment outside of the EU. The idea of the one-shop-shop is to provide a single SA as interlocutor for the controller and to facilitate the dialogue with the main establishment taking the decisions on the processing. However, the conclusion of the location of the main establishment cannot be based only on a statement of the organisation under review.<ref>Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017. WP 244 rev.01, p. 8, section 2. 2</ref>
 
It will indeed always be the SA which should determine where is the main establishment of the controller, who always bear the burden of proof to show evidence that the relevant decisions are taken. The SA can object to the analysis of the controller on the basis of an objective examination of the relevant facts, and on the basis of further information requested to the controller.<ref>Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017. WP 244 rev.01, p. 8, section 2. 2</ref>
 
 
'''''Main establishment of a processor'''''
 
''Main establishment is a place of a central administration''
 
Similarly to provisions of Article 4(16)(a) regarding the controller, a main establishment of a processor with establishments in more than one Member State is a place of its central administration.
 
''There is no central administration in the Union''
 
If cases where the processor has no central administration in the Union, the GDPR provides a different alternative than the one applicable to the controller: if the processor does not have a central administration in the Union, its main establishment is the place where the main processing activities take place in the Union (i) in the context of the activities of an establishment of the processor take place and (ii) to the extent that the processor is subject to specific obligations under this Regulation. As Tosoni argues, it introduces two qualifications: the first one “implies that the processing of personal data does not need to be carried out 'by' the relevant establishment itself, rather that it is sufficient if the processing is carried out 'in the context of the activities' of the establishment, and the second confirming the scope of application of the GDPR to processors.<ref>Tosoni, The EU General Data Protection Regulation (GDPR), Article 4(16), p. 235.</ref>
 
 
'''''Cases involving both the controller and the processor'''''
 
In cases involving both the controller and the processor, the competent lead SA remains the SA of the controller, if there is one. In such a case, the SA of the processor will be a concerned SA as per Article 4(22) GDPR. However, this is not the case if the draft decision concerns only the controller.  See Recital 36 GDPR. In cases where the processor is acting for several controllers, it may then be subject to the competence of several SAs.<ref>Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017. WP 244 rev.01, p. 9, section 2.3</ref>
 
 
'''''Joint controllership'''''
 
The GDPR does not address the situation of joint controllership and does not define specific criteria to determine the lead SA. However, according to Article 26(1), the controllers shall in a transparent manner determine their respective responsibilities for compliance with the obligations under this Regulation. The Article 29 Working Party considers that agreement between the controller could designate the establishment having the power to implement decisions about the processing with respect to the joint controllership.<ref>Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017, WP 244 rev.01, p. 8, section 2.1.</ref>  This could also be supported by the wording of Recital 79, which implies that the agreement regarding the allocation of responsibilities among controllers should also concern the monitoring and the measures of the SAs. However, this seems in contradiction with the aim expressed by the EDPB to avoid forum shopping.<ref>EDPB, Opinion 8/2019 on the competence of a supervisory authority in case of a change in circumstances relating to the main or single establishment, adopted on 9 July 2019, p. 30.</ref>
 
 
'''''3) Identifying the Lead Supervisory Authority'''''
 
Article 56(6) provides that that the lead SA shall act as “the sole interlocutor” of the controller or the processor for the processing operations at stake. The lead SA will also lead the cooperation procedure with the SA concerned under Article 60 GPR and adopt a draft decision.  According to the CJEU, ''“the competence of the lead supervisory authority for the adoption of a decision finding that such processing is an infringement of […] Regulation 2016/679 constitutes the rule, whereas the competence of the other supervisory authorities concerned for the adoption of such a decision, even provisionally, constitutes the exception”.''<ref>CJEU, 15 June 2021, ''Facebook c. APD'', C-645/19, § 64.</ref>
 
In case of change of main establishment in the course of a cooperation between the SAs, the EDPB considers that “the lead competence can switch to another SA until a final decision is made by the LSA”.<ref>EDPB, Opinion 8/2019 on the competence of a supervisory authority in case of a change in circumstances relating to the main or single establishment, adopted on 9 July 2019, p. 30.</ref>
 
Consequently, its competence is not definite until the very end of the procedure.<ref>''Hijmans'', in Kuner et al., The EU General Data Protection Regulation (GDPR), Article 56, p. 920. </ref> The EDPB stressed that to prevent “''forum shopping''”, “''SAs should exercise effective control over the notion of main establishment in order to reduce the risk that controllers or processors artificially change their main establishment for the purpose of changing the competent authority to handle the case''”.<ref>EDPB, Opinion 8/2019 on the competence of a supervisory authority in case of a change in circumstances relating to the main or single establishment, adopted on 9 July 2019, p. 30.</ref>
 
In case of “conflicting views” on which of the SA concerned is the lead SA, the EDPB can adopt a decision under the dispute resolution mechanism according to Article 65(1)(b) GDPR. However, in its decision on dispute resolution mechanism regarding the case of Twitter, the EDPB considered “that a disagreement on the competence of the supervisory authority acting as LSA to issue a decision in the specific case should not be raised through an objection pursuant to Article 60(4)”GDPR and falls outside of the scope of Article 4(24) GDPR”.<ref>See in this respect: EDPB, Decision 01/2020 on the dispute arisen on the draft decision of the Irish Supervisory Authority regarding Twitter International Company under Article 65(1)(a) GDPR, 9 November 2020, §52, available on <nowiki>https://edpb.europa.eu/sites/default/files/files/file1/edpb_bindingdecision01_2020_en.pdf</nowiki>.</ref> It seems therefore that the decision on a conflicting view can only be taken within a specific procedure under Article 65(1)(b) and that conflicting views on the lead SA cannot be addressed via a reasoned objection within a procedure under Article 65(1)(a).
 
 
'''Article 56(2)-(5): Data processing relating only to one Member State'''
 
'''Article 56(2)''' introduces an exception to the general competence of the SA of the main establishment. Article 56 which provides that a supervisory authority which is not the lead supervisory authority is to be competent to handle a complaint lodged with it concerning a cross-border processing of personal data or a possible infringement of that regulation, if the subject matter (i) relates only to an establishment in its own Member State or (ii) substantially affects data subjects only in that Member State. While the intention of the legislator seems to give a clear preference for local cases to be handled by the local SA, the text of the provisions is confusing and not clear.<ref>''Hijmans'', in Kuner et al., The EU General Data Protection Regulation (GDPR), Article 56, p. 921-923.</ref>
 
'''Article 56(3)''' In the event of a “local case” under Article 56(2), the supervisory authority should inform the lead SA “without delay” on that matter. The lead SA shall respond within a period of three weeks whether or not it will handle the case. Article 56(3) To take this decision, the lead SA will take into account of the presence of an establishment of the controller or processor in the Member State of which the SA informed it. it is however not clear how this provisions shall apply in practice.
 
'''Article 56(4)''' If the lead SA decides to handle the case, then the one-stop-shop procedure introduced in Article 60 is triggered. However, the supervisory authority which informed the lead SA about the subject matter may submit to the LSA a draft for a decision and the LSA shall take utmost account of that draft (Article 56(4)). The local SA remains in a strong position since it can still suggest a draft decision to the lead SA, which is in general competent to issue such decisions. Article 56(2) does not provide any mechanism similar to Article 65(1), according to which the EDPB can decide in case of conflicting views on the lead SA.
 
'''Article 56(5)''' If the lead SA decides not to handle the case, Article 56(5) provides that the supervisory authority which raised the exception shall handle it according to Article 61 and 62, those provisions requiring the supervisory authorities to comply with the rules on mutual assistance and cooperation within the framework of joint operations, in order to ensure effective cooperation between the authorities concerned.
 
 
'''Article 56(6): the lead SA as the sole interlocutor of the controller or the processor'''
 
Article 56(6) provides that the lead SA will remain the sole interlocutor of the controller or the processor. That means that the communication should exclusively take place with the lead SA, to avoid that the controller or processor would have multiple discussions with several SAs.
 
However, while the competence as a general rule of the lead supervisory authority is confirmed in Article 56(6), ''“that authority must exercise such competence within a framework of close cooperation with the other supervisory authorities concerned. In particular, the lead supervisory authority cannot, in the exercise of its competences, as stated in paragraph 53 of the present judgment, eschew essential dialogue with and sincere and effective cooperation with the other supervisory authorities concerned''”.<ref>CJEU, 15 June 2021, ''Facebook c. APD'', C-645/19, § 64.</ref>
 
Article 56 does not specify whether lead SA remains the sole interlocutor of the controller or processor where the local SA is handling the case under Article 56(5). A pragmatic approach would definitively avoid communication issues with the controller or processor.<ref>''Hijmans'', in Kuner et al., The EU General Data Protection Regulation (GDPR), Article 56, p. 924.</ref>


==Decisions==
==Decisions==

Revision as of 14:23, 23 July 2021

Article 56 - Competence of the lead supervisory authority
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Chapter 10: Delegated and implementing acts

Legal Text


Article 56 - Competence of the lead supervisory authority


1. Without prejudice to Article 55, the supervisory authority of the main establishment or of the single establishment of the controller or processor shall be competent to act as lead supervisory authority for the cross-border processing carried out by that controller or processor in accordance with the procedure provided in Article 60.

2. By derogation from paragraph 1, each supervisory authority shall be competent to handle a complaint lodged with it or a possible infringement of this Regulation, if the subject matter relates only to an establishment in its Member State or substantially affects data subjects only in its Member State.

3. In the cases referred to in paragraph 2 of this Article, the supervisory authority shall inform the lead supervisory authority without delay on that matter. Within a period of three weeks after being informed the lead supervisory authority shall decide whether or not it will handle the case in accordance with the procedure provided in Article 60, taking into account whether or not there is an establishment of the controller or processor in the Member State of which the supervisory authority informed it.

4. Where the lead supervisory authority decides to handle the case, the procedure provided in Article 60 shall apply. The supervisory authority which informed the lead supervisory authority may submit to the lead supervisory authority a draft for a decision. The lead supervisory authority shall take utmost account of that draft when preparing the draft decision referred to in Article 60(3).

5. Where the lead supervisory authority decides not to handle the case, the supervisory authority which informed the lead supervisory authority shall handle it according to Articles 61 and 62.

6. The lead supervisory authority shall be the sole interlocutor of the controller or processor for the cross-border processing carried out by that controller or processor.

Relevant Recital

Rectial 36: Determination of the Main Establishment

The main establishment of a controller in the Union should be the place of its central administration in the Union, unless the decisions on the purposes and means of the processing of personal data are taken in another establishment of the controller in the Union, in which case that other establishment should be considered to be the main establishment. The main establishment of a controller in the Union should be determined according to objective criteria and should imply the effective and real exercise of management activities determining the main decisions as to the purposes and means of processing through stable arrangements. That criterion should not depend on whether the processing of personal data is carried out at that location. The presence and use of technical means and technologies for processing personal data or processing activities do not, in themselves, constitute a main establishment and are therefore not determining criteria for a main establishment. The main establishment of the processor should be the place of its central administration in the Union or, if it has no central administration in the Union, the place where the main processing activities take place in the Union. In cases involving both the controller and the processor, the competent lead supervisory authority should remain the supervisory authority of the Member State where the controller has its main establishment, but the supervisory authority of the processor should be considered to be a supervisory authority concerned and that supervisory authority should participate in the cooperation procedure provided for by this Regulation. In any case, the supervisory authorities of the Member State or Member States where the processor has one or more establishments should not be considered to be supervisory authorities concerned where the draft decision concerns only the controller. Where the processing is carried out by a group of undertakings, the main establishment of the controlling undertaking should be considered to be the main establishment of the group of undertakings, except where the purposes and means of processing are determined by another undertaking.

Recital 124: Lead Authority Regarding Processing in Several Member States

Where the processing of personal data takes place in the context of the activities of an establishment of a controller or a processor in the Union and the controller or processor is established in more than one Member State, or where processing taking place in the context of the activities of a single establishment of a controller or processor in the Union substantially affects or is likely to substantially affect data subjects in more than one Member State, the supervisory authority for the main establishment of the controller or processor or for the single establishment of the controller or processor should act as lead authority. It should cooperate with the other authorities concerned, because the controller or processor has an establishment on the territory of their Member State, because data subjects residing on their territory are substantially affected, or because a complaint has been lodged with them. Also where a data subject not residing in that Member State has lodged a complaint, the supervisory authority with which such complaint has been lodged should also be a supervisory authority concerned. Within its tasks to issue guidelines on any question covering the application of this Regulation, the Board should be able to issue guidelines in particular on the criteria to be taken into account in order to ascertain whether the processing in question substantially affects data subjects in more than one Member State and on what constitutes a relevant and reasoned objection.

Recital 125: Competences of the Lead Authority

The lead authority should be competent to adopt binding decisions regarding measures applying the powers conferred on it in accordance with this Regulation. In its capacity as lead authority, the supervisory authority should closely involve and coordinate the supervisory authorities concerned in the decision-making process. Where the decision is to reject the complaint by the data subject in whole or in part, that decision should be adopted by the supervisory authority with which the complaint has been lodged.

Recital 125: Joint decisions

The decision should be agreed jointly by the lead supervisory authority and the supervisory authorities concerned and should be directed towards the main or single establishment of the controller or processor and be binding on the controller and processor. The controller or processor should take the necessary measures to ensure compliance with this Regulation and the implementation of the decision notified by the lead supervisory authority to the main establishment of the controller or processor as regards the processing activities in the Union.

Recital 128: Information of the Supervisory Authority Regarding Local Processing

Each supervisory authority not acting as the lead supervisory authority should be competent to handle local cases where the controller or processor is established in more than one Member State, but the subject matter of the specific processing concerns only processing carried out in a single Member State and involves only data subjects in that single Member State, for example, where the subject matter concerns the processing of employees' personal data in the specific employment context of a Member State. In such cases, the supervisory authority should inform the lead supervisory authority without delay about the matter. After being informed, the lead supervisory authority should decide, whether it will handle the case pursuant to the provision on cooperation between the lead supervisory authority and other supervisory authorities concerned (‘one-stop-shop mechanism’), or whether the supervisory authority which informed it should handle the case at local level. When deciding whether it will handle the case, the lead supervisory authority should take into account whether there is an establishment of the controller or processor in the Member State of the supervisory authority which informed it in order to ensure effective enforcement of a decision vis-à-vis the controller or processor. Where the lead supervisory authority decides to handle the case, the supervisory authority which informed it should have the possibility to submit a draft for a decision, of which the lead supervisory authority should take utmost account when preparing its draft decision in that one-stop-shop mechanism.

Recital 128: Responsibility Regarding Processing in the Public Interest

The rules on the lead supervisory authority and the one-stop-shop mechanism should not apply where the processing is carried out by public authorities or private bodies in the public interest. In such cases the only supervisory authority competent to exercise the powers conferred to it in accordance with this Regulation should be the supervisory authority of the Member State where the public authority or private body is established.

Commentary

Overview

In cross-border cases, all SAs could potentially be competent according to Article 55. For this reason, Article 56(1) establishes a specific mechanism to solve the conflicting competences of the SAs involved. Article 56(1) identifies the lead SA, which is the SA where the controller or the processor have their main establishment. The lead SA will in principle be in charge to lead the cooperation with other SAs under the cooperation mechanism of Article 60 (also called the “one-stop-shop”).

Article 56(2) to (6) provides an exception to the cooperation mechanism when the processing at stake has only a local impact (the so-called “local cases”).

Article 56(2) to (6) provides an exception to the cooperation mechanism when the processing at stake has only a local impact (the so-called “local cases”).


Article 56(1) Designation of the lead SA and the cooperation mechanism

The cooperation mechanism will be triggered (i) in case of cross border processing, and (ii) when the controller or processor has a main establishment in the EU. In such a case, Article 56(1) lays down the rule for the designation of the lead SA, which will be in charge of the cooperation procedure under Article 60, but also the sole interlocutor of the controller or processor.

Even in the case of a cross border processing, the cooperation procedure will not apply in three cases: under Article 56(2) (“local cases”), under Article 66 (urgency procedure)[1] and also under Article 55(2) (processing for public interest or in line with a legal obligation).[2]


1) Identification of a cross-border processing

According to the wording of Article 56(1), the competence of the lead SA and the cooperation mechanism of Article 60 will be triggered in the case of a cross-border processing. Assessing whether the processing at stake is cross-border is therefore a first step.

The definition of cross-border processing is provided by Article 4(23) which stipulates that such a processing:

a)     takes place in the context of the activities of establishments in more than one Member State of a controller or processor in the Union where the controller or processor is established in more than one Member State; or

b)    takes place in the context of the activities of a single establishment of a controller or processor in the Union but which substantially affects or is likely to substantially affect data subjects in more than one Member State.

In other words, the processing by a controller only established in one Member State and which substantially only affects the individuals in this Member State will not trigger the one-stop-shop procedure under Article.

In all other cases, the processing shall be considered as cross-border, if there is at least one establishment of the controller in the EU and if the activities of this establishment are linked to the processing at stake. That consequence was intentional since the legislator wanted to encourage the controllers to be established in the EU to have the benefits of the one-stop-shop mechanisms.

Context of the activities

The meaning of “the context of the activities” was already developed by the CJEU. The Court built on a broad definition of “establishment” and held that intending to promote and sell advertising space by an establishment in a Member State of a third country undertaking to make the latter profitable is carried out “in the context of the activities” of that establishment.[3] The EDPB also confirmed that this notion should not be interpreted to restrictively considering the view to fulfill the objective of ensuring effective and complete protection.[4]

Substantial effect

The notion of “substantial effect” on data subjects as mentioned by Article (23)(b) is not defined in the GDPR. In its guidelines (endorsed by the EDPB), the Article 29 Data Protection Working Party considered that the number –even large) of affected individuals in several Member States is not decisive. Rather, the Working Party developed a following, non-exhaustive list of criteria that will be taken into account on a case by case basis.[5]

The guidelines suggest to take into account the context of the processing, the type of data, the purpose of the processing and other factor factors, such as potential discrimination, reputational damage, impact on the well-being or involvement of special categories of data.


2) Identifying a main establishment

If a controller or a processor has establishments in more than one Member States, identifying its “main establishment” is the first step to recognize the lead supervisory authority in a cross-border processing. Note that the main establishment is defined for each processing operation. Therefore, there may be several main establishments, for example if the decisions regarding the different processing operations is done by different establishments of the controller.[6]

The Article 29 Working Party stressed that the GDPR does not allow “forum shopping”. It is a role of the SAs to properly define the main establishment of a controller according to objective criteria and subsequently determine the lead authority. According to the A29WP guidelines, “conclusions cannot be based solely on statements by the organisation under review. The burden of proof ultimately falls on controllers and processors to demonstrate to the relevant supervisory authorities where the relevant processing decisions are taken and where there is the power to implement such decisions. (...) The lead supervisory authority, or concerned authorities, can rebut the controller's analysis based on an objective examination of the relevant facts, requesting further information where required.”[7] The GDPR introduces separate criteria for the main establishment of a processor and of a controller.

The SAs will cooperate to determine the lead authority. In the event of conflicting views on the lead supervisory authority, the case may be referred to the EDPB under Article 65(1)(b).

Notion of establishment

Recital 22, following the CJEU ruling in Weltimmo defines “establishment” as “the effective and real exercise of activity through stable arrangements”.[8] The legal form of such arrangements is irrelevant. As the Court further specified, the presence of only one representative can, in some circumstances, suffice to constitute a stable arrangement if that representative acts with a sufficient degree of stability through the presence of the necessary equipment for provision of the specific services concerned in the Member State in question.[9]


Main establishment of a controller

Main Establishment of a controllerplace of central administration

As a general rule, as per Article 4 (16)(a) GDPR, the main establishment of a controller is the place of its central administration in the Union. This is however a rebuttable presumption, since another establishment can also be the main establishment, according to Article 4(16) GDPR, when “the decisions on the purposes and means of the processing of personal data are taken in another establishment of the controller in the Union and the latter establishment has the power to have such decisions implemented, in which case the establishment having taken such decisions is to be considered to be the main establishment”. In other words, in order to determine the main establishment of a controller, it is necessary to first find its place of central administration – “the place where decisions about the purposes and means of the processing of personal data are taken and this place has the power to have such decisions implemented”.[10]

Main establishment is not a place of a central administration

If a controller’s main establishment is not the place of its central administration in the EU, it is necessary to identify the establishment where “the effective and real exercise of management activities that determine main decisions as to the purposes and means of processing through stable arrangements, take place”.[11]  The presence and use of technical means and technologies for processing personal data or processing activities do not in themselves, constitute a main establishment and are therefore not determining criteria for a main establishment. See Recital 36 GDPR

The Article 29 Working Party developed a following, not exhaustive list of questions to determine a controller’s main establishment in cases where it is not the place of its central administration in the EU:

  • Where are decisions about the purposes and means of the processing given final “sign off”?
  • Where are decisions about business activities that involve data processing made?
  • Where does the power to have decisions implemented effectively lie?
  • Where is the Director (or Directors) with overall management responsibility for the cross border processing located?
  • Where is the controller or processor registered as a company, if in a single territory?” Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017, WP 244 rev.01, p. 7, section 2.1.1.  

In the case of a group of undertaking with a headquarter in the EU, the main establishment will be presumed to the decision-making center relating to the processing of personal data.[12] However, if the decisions relating to the processing are taken by another establishment of the controller in the Union, the later should be considered the main establishment.[13]

Some difficulties may arise when none of the EU establishments are taking decisions about the processing (even with a headquarter in the EU). In such a case, significantly called “borderline cases” by the Article 29 Working Party[14], the GDPR does not provide for a clear answer. While the GDPR wants to encourage the non EU controller to be established in the EU to benefit from the one-stop-shop, forum shopping should be avoided and it would be too easy to pretend that decision-making is made in the EU while the decisions are actually taken in another establishment outside of the EU. The idea of the one-shop-shop is to provide a single SA as interlocutor for the controller and to facilitate the dialogue with the main establishment taking the decisions on the processing. However, the conclusion of the location of the main establishment cannot be based only on a statement of the organisation under review.[15]

It will indeed always be the SA which should determine where is the main establishment of the controller, who always bear the burden of proof to show evidence that the relevant decisions are taken. The SA can object to the analysis of the controller on the basis of an objective examination of the relevant facts, and on the basis of further information requested to the controller.[16]


Main establishment of a processor

Main establishment is a place of a central administration

Similarly to provisions of Article 4(16)(a) regarding the controller, a main establishment of a processor with establishments in more than one Member State is a place of its central administration.

There is no central administration in the Union

If cases where the processor has no central administration in the Union, the GDPR provides a different alternative than the one applicable to the controller: if the processor does not have a central administration in the Union, its main establishment is the place where the main processing activities take place in the Union (i) in the context of the activities of an establishment of the processor take place and (ii) to the extent that the processor is subject to specific obligations under this Regulation. As Tosoni argues, it introduces two qualifications: the first one “implies that the processing of personal data does not need to be carried out 'by' the relevant establishment itself, rather that it is sufficient if the processing is carried out 'in the context of the activities' of the establishment, and the second confirming the scope of application of the GDPR to processors.[17]


Cases involving both the controller and the processor

In cases involving both the controller and the processor, the competent lead SA remains the SA of the controller, if there is one. In such a case, the SA of the processor will be a concerned SA as per Article 4(22) GDPR. However, this is not the case if the draft decision concerns only the controller.  See Recital 36 GDPR. In cases where the processor is acting for several controllers, it may then be subject to the competence of several SAs.[18]


Joint controllership

The GDPR does not address the situation of joint controllership and does not define specific criteria to determine the lead SA. However, according to Article 26(1), the controllers shall in a transparent manner determine their respective responsibilities for compliance with the obligations under this Regulation. The Article 29 Working Party considers that agreement between the controller could designate the establishment having the power to implement decisions about the processing with respect to the joint controllership.[19]  This could also be supported by the wording of Recital 79, which implies that the agreement regarding the allocation of responsibilities among controllers should also concern the monitoring and the measures of the SAs. However, this seems in contradiction with the aim expressed by the EDPB to avoid forum shopping.[20]


3) Identifying the Lead Supervisory Authority

Article 56(6) provides that that the lead SA shall act as “the sole interlocutor” of the controller or the processor for the processing operations at stake. The lead SA will also lead the cooperation procedure with the SA concerned under Article 60 GPR and adopt a draft decision.  According to the CJEU, “the competence of the lead supervisory authority for the adoption of a decision finding that such processing is an infringement of […] Regulation 2016/679 constitutes the rule, whereas the competence of the other supervisory authorities concerned for the adoption of such a decision, even provisionally, constitutes the exception”.[21]

In case of change of main establishment in the course of a cooperation between the SAs, the EDPB considers that “the lead competence can switch to another SA until a final decision is made by the LSA”.[22]

Consequently, its competence is not definite until the very end of the procedure.[23] The EDPB stressed that to prevent “forum shopping”, “SAs should exercise effective control over the notion of main establishment in order to reduce the risk that controllers or processors artificially change their main establishment for the purpose of changing the competent authority to handle the case”.[24]

In case of “conflicting views” on which of the SA concerned is the lead SA, the EDPB can adopt a decision under the dispute resolution mechanism according to Article 65(1)(b) GDPR. However, in its decision on dispute resolution mechanism regarding the case of Twitter, the EDPB considered “that a disagreement on the competence of the supervisory authority acting as LSA to issue a decision in the specific case should not be raised through an objection pursuant to Article 60(4)”GDPR and falls outside of the scope of Article 4(24) GDPR”.[25] It seems therefore that the decision on a conflicting view can only be taken within a specific procedure under Article 65(1)(b) and that conflicting views on the lead SA cannot be addressed via a reasoned objection within a procedure under Article 65(1)(a).


Article 56(2)-(5): Data processing relating only to one Member State

Article 56(2) introduces an exception to the general competence of the SA of the main establishment. Article 56 which provides that a supervisory authority which is not the lead supervisory authority is to be competent to handle a complaint lodged with it concerning a cross-border processing of personal data or a possible infringement of that regulation, if the subject matter (i) relates only to an establishment in its own Member State or (ii) substantially affects data subjects only in that Member State. While the intention of the legislator seems to give a clear preference for local cases to be handled by the local SA, the text of the provisions is confusing and not clear.[26]

Article 56(3) In the event of a “local case” under Article 56(2), the supervisory authority should inform the lead SA “without delay” on that matter. The lead SA shall respond within a period of three weeks whether or not it will handle the case. Article 56(3) To take this decision, the lead SA will take into account of the presence of an establishment of the controller or processor in the Member State of which the SA informed it. it is however not clear how this provisions shall apply in practice.

Article 56(4) If the lead SA decides to handle the case, then the one-stop-shop procedure introduced in Article 60 is triggered. However, the supervisory authority which informed the lead SA about the subject matter may submit to the LSA a draft for a decision and the LSA shall take utmost account of that draft (Article 56(4)). The local SA remains in a strong position since it can still suggest a draft decision to the lead SA, which is in general competent to issue such decisions. Article 56(2) does not provide any mechanism similar to Article 65(1), according to which the EDPB can decide in case of conflicting views on the lead SA.

Article 56(5) If the lead SA decides not to handle the case, Article 56(5) provides that the supervisory authority which raised the exception shall handle it according to Article 61 and 62, those provisions requiring the supervisory authorities to comply with the rules on mutual assistance and cooperation within the framework of joint operations, in order to ensure effective cooperation between the authorities concerned.


Article 56(6): the lead SA as the sole interlocutor of the controller or the processor

Article 56(6) provides that the lead SA will remain the sole interlocutor of the controller or the processor. That means that the communication should exclusively take place with the lead SA, to avoid that the controller or processor would have multiple discussions with several SAs.

However, while the competence as a general rule of the lead supervisory authority is confirmed in Article 56(6), “that authority must exercise such competence within a framework of close cooperation with the other supervisory authorities concerned. In particular, the lead supervisory authority cannot, in the exercise of its competences, as stated in paragraph 53 of the present judgment, eschew essential dialogue with and sincere and effective cooperation with the other supervisory authorities concerned”.[27]

Article 56 does not specify whether lead SA remains the sole interlocutor of the controller or processor where the local SA is handling the case under Article 56(5). A pragmatic approach would definitively avoid communication issues with the controller or processor.[28]

Decisions

→ You can find all related decisions in Category:Article 56 GDPR

References

  1. CJEU, 15 June 2021, Facebook c. APD, C-645/19, §§ 58-59
  2. See Robert, « Les autorités de contrôle dans le nouveau règlement général », in Docquir, « Vers un droit européen de la protection des données », margin n° 57-60 (Brussels, Larcier, 2017)
  3. See CJEU, 13 May 2014, Google Spain, C-131/12; CJEU, 1 October 2015, Weltimmo, C-230/14.
  4. See EDPB, Guidelines 3/2018 on the territorial scope of the GDPR (Article 3), version 2.1, 12 November 2019, p. 7.
  5. Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017, WP 244 rev.01, p. 4, as endorsed by the EDPB on 25 May 2018.
  6. Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017. WP 244 rev.01, p. 5, section 2.1.
  7. Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017. WP 244 rev.01, p. 7.
  8. CJEU, 1 October 2015, Weltimmo, C-230/14, par. 31.
  9. CJEU, 1 October 2015, Weltimmo, C-230/14, par. 30.
  10. Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017, WP 244 rev.01, p. 5, section 2.1.
  11. Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017, WP 244 rev.01, p. 6, section 2.1.1.
  12. Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017, WP 244 rev.01, p. 7, section 2.1.2.
  13. For criteria taken into account by the Irish SA to conclude that Twitter had its main establishment in Ireland, see EDPB, Decision 01/2020 on the dispute arisen on the draft decision of the Irish Supervisory Authority regarding Twitter International Company under Article 65(1)(a) GDPR, adopted on 9th November 2020, §34, available on https://edpb.europa.eu/sites/default/files/files/file1/edpb_bindingdecision01_2020_en.pdf.
  14. Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017. WP 244 rev.01, p. 8, section 2. 2
  15. Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017. WP 244 rev.01, p. 8, section 2. 2
  16. Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017. WP 244 rev.01, p. 8, section 2. 2
  17. Tosoni, The EU General Data Protection Regulation (GDPR), Article 4(16), p. 235.
  18. Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017. WP 244 rev.01, p. 9, section 2.3
  19. Article 29 Working Party, Guidelines for identifying a controller or processor’s lead supervisory authority, adopted on 13 December 2016, as last revised and adopted on 5 April 2017, WP 244 rev.01, p. 8, section 2.1.
  20. EDPB, Opinion 8/2019 on the competence of a supervisory authority in case of a change in circumstances relating to the main or single establishment, adopted on 9 July 2019, p. 30.
  21. CJEU, 15 June 2021, Facebook c. APD, C-645/19, § 64.
  22. EDPB, Opinion 8/2019 on the competence of a supervisory authority in case of a change in circumstances relating to the main or single establishment, adopted on 9 July 2019, p. 30.
  23. Hijmans, in Kuner et al., The EU General Data Protection Regulation (GDPR), Article 56, p. 920.
  24. EDPB, Opinion 8/2019 on the competence of a supervisory authority in case of a change in circumstances relating to the main or single establishment, adopted on 9 July 2019, p. 30.
  25. See in this respect: EDPB, Decision 01/2020 on the dispute arisen on the draft decision of the Irish Supervisory Authority regarding Twitter International Company under Article 65(1)(a) GDPR, 9 November 2020, §52, available on https://edpb.europa.eu/sites/default/files/files/file1/edpb_bindingdecision01_2020_en.pdf.
  26. Hijmans, in Kuner et al., The EU General Data Protection Regulation (GDPR), Article 56, p. 921-923.
  27. CJEU, 15 June 2021, Facebook c. APD, C-645/19, § 64.
  28. Hijmans, in Kuner et al., The EU General Data Protection Regulation (GDPR), Article 56, p. 924.