KamR Stockholm - 2829-23

KamR Stockholm - 2829-23
Court:	KamR Stockholm (Sweden)
Jurisdiction:	Sweden
Relevant Law:	Article 1(2) GDPR Article 5(1)(a) GDPR Article 5(2) GDPR Article 12(1) GDPR Article 13 GDPR Article 13(1)(e) GDPR Article 13(1)(c) GDPR Article 13(1)(f) GDPR Article 13(2)(a) GDPR Article 13(2)(b) GDPR Article 13(2)(f) GDPR Article 14(2)(g) GDPR Article 15 GDPR
Decided:	11.03.2024
Published:	11.03.2024
Parties:	Klarna Bank AB IMY
National Case Number/Name:	2829-23
European Case Law Identifier:
Appeal from:	Administrative Court of Stockholm (Sweden) 7679-22
Appeal to:	Not appealed
Original Language(s):	Swedish
Original Source:	Kammarrätten i Stockholm (in Swedish)
Initial Contributor:	inkg

The Administrative Court of Appeal raised the administrative fine back to €730,000 (SEK 7,300,000) for Klarna Bank AB's insufficient and incomplete privacy policy.

English Summary

Facts

On 28 March 2022, the Swedish DPA ("IMY") fined Klarna AB ("the controller") €730,000 (SEK 7,300,000) for not providing data subjects with adequate information related to their processing activities. The DPA found that the controller violated the GDPR in several respects.

The controller appealed the DPA's decision to the Administrative Court of Stockholm ("FiS"). The Administrative Court upheld the controller's appeal in part and lowered the administrative fine to €600,000 (SEK 6,000,000) because the violations did not cause considerable harm and were not intentional and the controller had improved its information.

The DPA appealed this decision to the Administrative Court of Appeal of Stockholm ("KamR Stockholm"), requesting the fine to be raised back to €730,000 (SEK 7,300,000).

Holding

The Court reviewed the appealed decision to determine whether the controller should be fined on the grounds put forward by the DPA. The Court specifically reviewed whether the controller's privacy policy fulfills the requirement of Article 12 GDPR - Article 16 GDPR and whether the controller's processing activities fulfill the principle of transparency in Article 5(1)(a) GDPR and accountability in Article 5(2) GDPR.

The Court considered that the controller violated the GDPR by:

• not specifying in its privacy policy the legal basis for all purposes (Article 13(1)(c) GDPR)
• not providing information on how data subjects can access information on safeguards for third country transfers (Article 13(1)(f) GDPR)
• not providing full information on how personal data will be stored (Article 13(2)(a) GDPR)
• not providing information on the use of a scoring model and the data processed in it (Article 13(2)(f) GDPR and Article 14(2)(g) GDPR)

• and not providing clear and easily accessible information on the “My economy” service, the right to data portability, restriction and automated decision-making (Article 12(1) GDPR)

The Court took into account that the information concerned a large number of data subjects and that the shortcomings related to information based on articles that are central to the data subjects. Moreover, the Court recognised that the breaches did not take place for a long time and the privacy policy had been continuously improved. Moreover, taking into account the controller’s argument that the DPA’s case took unreasonably long and that the controller’s right to be informed without delay of the significance of and grounds for the accusations was violated, the Court did not see a reason to reduce the fine on the basis of Article 83(2) GDPR and Article 6(1) and 6(3)(a) ECHR.

Thus, the Court held that for an effective, proportionate, and dissuasive measure, the violations justified an administrative fine of €730,000 (SEK 7,300,000), which was the maximum amount according to the penalty framework in the case, upholding the DPA’s appeal.

Detailed Summary of the Court's assessment

Information about transfers to third countries: The Court agreed with the Administrative Court that the controller violated Article 13(1)(f) GDPR by not providing information on how data subjects can access information on safeguards for third-country transfers.

However, the Court did hold that Article 13(1)(f) GDPR does not require specific third countries to be specified on privacy policy. Therefore, the Court found, contrary to Administrative Court's finding, that controller's privacy policy met the requirements of Article 13(1)(f) GDPR.

Information about processing related to "My Economy" service: Agreeing with the Administrative Court, the Court rejected the controllers arguments and held that controller violated Article 13(1)(c) GDPR regarding information on the legal basis for each purposes in relation to the service "My Economy" and Article 13(2)(a) GDPR regarding data storage.

According to the Court, the information provided about the legal basis during the registration for the "My Economy" service was clear and did not violate Article 12(1) GDPR, contrary to DPA's claim. However, regarding the information about the purpose, the Court assessed that the structure of the data protection information, the terms of use, and the cross-references between the documents made the information difficult to access and was unclear to data subjects. Therefore, the Court held that the information did not comply with Article 12(1) GDPR.

Recipients of personal data: The Court agreed with the Administrative Court's finding that the controller does not have an obligation to differentiate between Swedish or foreign credit agencies in the information provided under Article 13(1)(e) GDPR. Thus, the controller can put credit reference agencies in the same category of recipient, regardless of the country in which the business is conducted. Therefore, the Court found that controller did not violate Article 13(1)(e) GDPR.

Informing about data subjects rights: The Court stated that the wording of Article 13(2)(b) GDPR indicates that the data controller should inform about the existence of the rights specified in the article. On the question of whether the controller should also inform about the meanings of these rights, the Court pointed out the one of the purpose of GDPR is to protect the rights of individuals in the processing of personal data (see Article 1(2) GDPR). The Court also referred to Recital 39, stating that individuals should be made aware of their rights regarding processing of personal data, including how to exercise them. The Court found no indication that the controller, in addition to informing about the existence of the rights listed in Article 13(2)(b) GDPR, was obliged to further describe the meaning of those rights. Consequently, the Court, contrary to Administrative Court and the DPA, found that the controller did not violate Article 13(2)(b) GDPR.

On the other hand, the Court, agreeing with the DPA's findings, concluded that controller violated Article 12(1) GDPR. This was because the name of the "right to restriction" was not provided and instead expressed as the right to "oppose" and "stop processing", which the Court found to be unclear terminology and difficult to understand for the data subject. The Court also found that controller breached Article 12(1) GDPR, because the right to data portability was provided under right to access, which according to the Court and the DPA, made it difficult to understand that it is a separate right.

Information about profiling and automated decision making: The Court, like the Administrative Court and contrary to the DPA's finding, stated that controller is not obliged to provide information about the circumstances that always lead to rejection. However, the Court assessed that the controller violated Article 13(2)(f) GDPR and Article 14(2)(g) GDPR by not informing data subjects about the use of a scoring model and the data processed in it.

Furthermore, the Court stated that when information, for example on automated decision-making, is provided in different places, greater clarity is required for it to be easily accessible. The Court considered that, referencing to information at another section of the privacy policy, made it difficult to access and identify relevant information. Consequently, the Court found that the controller did not inform about automated decision-making in an easily accessible manner and therefore breached Article 12(1) GDPR.

The principle of transparency: The Court considered that the violations consisted of controller not providing complete or sufficient information and not meeting the requirements on how it should be provided. The Court found that, although the controller had breached several articles expressing the principle of transparency in the GDPR, the violations are not of a character and extent that the controller could be considered to have violated the principle of transparency in Article 5(1)(a) GDPR. Thus, the Court held that the controller did not violate Article 5(2) GDPR.

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English Machine Translation of the Decision

The decision below is a machine translation of the Swedish original. Please refer to the Swedish original for more details.

Klarna must pay a penalty fee of SEK 7.5 million because the data protection information did not meet the requirements of the EU's data protection regulation.

The violations of the data protection regulation consist of Klarna not providing sufficient information to the data subjects, for example, about how personal data will be stored, and that the information was difficult to access or unclear.
- The Court of Appeal considers that a penalty fee of SEK 7.5 million is justified to be effective, proportionate and dissuasive. The Court of Appeal thus makes the same assessment as the Swedish Privacy Protection Authority, says Peder Liljeqvist, a lawyer at the Court of Appeal.
The Court of Appeal thus changes the administrative court's ruling that the sanction fee would be SEK 6 million.