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WHAT BUSINESSES NEED TO KNOW ABOUT DATA PROTECTION LAW FOLLOWING LANDMARK EU LEGISLATION

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WHAT BUSINESSES NEED TO KNOW ABOUT DATA PROTECTION LAW FOLLOWING LANDMARK EU LEGISLATION

Detlev Gabel, Tim Hickman, Audrey Oh, White & Case

After an unexpectedly long legislative process, the EU has published Regulation 2016/679 (the General Data Protection Regulation or “GDPR”). But what are the future implications of this new legislation?

Timeline

On 4 May 2016, after more than four years of drafts, discussions and negotiations, the GDPR was published in the Official Journal of the EU by the Secretaries-General of the European Parliament and of the Council of the EU. It will come into force after a further twenty days, followed by an effective two-year grace period, meaning that enforcement of the GDPR will not begin until 25 May 2018.

During this period, the existing collection of national data protection laws, based on EU Directive 95/46/EC, will continue to apply. However, organisations will need to use the two-year window wisely. It is important for organisations to allocate sufficient time and resources to ensure that they are compliant with the GDPR by May 2018. Failure to meet this deadline may result in enforcement action under the GDPR, including possible fines up to the greater of €20 million, or 4% of annual global turnover. France is already in the process of introducing legislation to implement fines at these levels immediately, rather than waiting for the GDPR to become enforceable. It is not yet clear whether other Member States will follow suit.

What are the key concerns for businesses?

The GDPR makes wide-ranging changes to existing EU data protection law. In particular, businesses should bear in mind the following points:

  • Territorial application – The GDPR applies to non-EU businesses if they: (i) target their goods or services at EU residents (e.g., using local domain names, in the local language, offering local delivery and accepting payment in local currency); or (ii) monitor the behaviour of EU residents. Many businesses that are not subject to existing EU data protection law will be subject to the GDPR, especially businesses operating in the EU in an online context.
  • Remedies and sanctions – As noted above, the consequences of breaching EU data protection law escalate dramatically under the GDPR, which sets the maximum fine for a single breach at the greater of €20 million, or 4% of annual global turnover.
  • Consent – Under the GDPR, consent becomes harder for businesses to obtain and rely on. Notably, the GDPR states that consent is not valid where there is a ‘clear imbalance’ between the controller and the data subject.
  • Increased compliance obligations for controllers – The GDPR imposes increased compliance obligations on businesses that act as controllers (e.g., implementing appropriate policies, keeping records of processing activities, appointing a Data Protection Officer in some cases, implementing privacy by design and by default, etc.). For many businesses, this is likely to require a significant overhaul of their data processing activities.
  • Direct compliance obligations for processors – Existing EU data protection law generally does not impose direct legal compliance obligations on processors. However, under the GDPR, processors have direct legal compliance obligations, and Data Protection Authorities can take enforcement action directly against processors. For businesses that commonly act as processors (e.g., outsourced service providers to financial institutions) this is a significant change, and may result in attempts to re-negotiate existing processing agreements.
  • 72-hour data breach notification – The GDPR requires businesses to report data breaches to the relevant Data Protection Authority within 72 hours of detection. For most businesses, radical changes to internal reporting structures will be needed in order to be able to meet this deadline.

Wider context

The publication of the GDPR in the Official Journal marks the end of a long journey. The first draft of the GDPR, setting out a comprehensive reform package of the EU’s data protection rules, was published by the European Commission in January 2012. It has since been through numerous rounds of revisions, committees and votes, which have taken significantly longer than many commentators originally anticipated.

In parallel to the GDPR, the EU has also adopted a new Police and Criminal Justice Directive which governs the processing of personal data for the purposes of prevention, detection, investigation or prosecution of criminal offences, and related judicial activities. The UK has effectively opted out of this Directive, meaning that the processing of personal data for policing and criminal justice purposes in the UK may be governed by a different set of rules from the rest of the EU. The practical impact of the UK’s decision on this issue remains to be seen.

Next steps

Once the GDPR comes into force, two further key developments are expected. First, EU Data Protection Authorities will, individually and collectively, begin to issue guidance on the application and interpretation of the GDPR, with the aim of helping organisations to achieve compliance with the requirements of the GDPR. This guidance is expected to offer additional clarification of certain issues in the GDPR that are not totally clear from the current text (e.g., several of the new data transfer mechanisms set out in the GDPR require significant further explanation before they can be used in practice).

Second, the European Commission has launched a Public Consultation with the aim of reviewing Directive 2002/58/EC (the “ePrivacy Directive”). The potential for overlap between the GDPR and the ePrivacy Directive has been the subject of much discussion in recent months. For example, that overlap could result in controllers that suffer a data breach being obliged to report that same breach twice – once under the GDPR and once under the ePrivacy Directive. It is hoped that the Commission’s efforts will resolve these issues before enforcement of the GDPR begins.

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Can a leader’s level of enthusiasm and optimism really impact the bottom line?

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Can a leader’s level of enthusiasm and optimism really impact the bottom line? 1

By Mark E. Brouker, Captain, United States Navy, founder of Brouker Leadership Solutions

Can a leader’s level of enthusiasm and optimism really impact the bottom line? We hear of the leader’s ability to influence others in powerful ways in politics, academia, sports, among other areas. However, in business, profitability is where the rubber meets the road.  How impactful is the leader’s level of enthusiasm and optimism in creating a healthy bottom line?

One of the truly remarkable and rewarding tours of duty I had during my Navy career was with a small group of highly motivated doctors and pharmacists from all three services – Army, Navy, and Air Force. These professionals were all hand-picked to join a newly-formed team which was directed to reduce the escalating cost of prescription medications provided for all Department of Defense (DoD) active duty (Army, Navy and Air Force) and family members. Our task was made more challenging because we were to reduce costs without decreasing quality of care. At that time, there were over eight million men, women, and children eligible for prescription medications throughout DoD. The annual cost was over five billion dollars and climbing fast.

Our boss, Dan, was a brilliant, hard-working, and extremely passionate leader who was highly respected by all. Dan cared for us and we cared for him. We were a tight group. We treated each other as family. Dan’s passion was contagious, and he quickly established a culture of caring, hard work and trust. We were poised for success. Because I was senior to other members of the team, Dan selected me to be his deputy.

The idea of creating a small team to bend the cost curve for the entire DoD pharmacy benefit was novel – it had never been tried before. While the team shared a genuine passion for this noble and ambitious undertaking, early wins were few and far between.

After the 6-month honeymoon period ended, enthusiasm was slowly replaced with frustration.  Every morning we’d meet with Dan to share the progress or, more accurately, lack of progress with our respective projects. It was slow and insidious at first, but sarcasm, frustration and pessimism crept into the meetings. A few of the more vocal naysayers would spew their negative venom and Dan and I would make meager attempts to mitigate the damage, or in times of weakness simply join in. These meetings frequently went much longer than scheduled, drained everyone of energy, and were generally recognized to be a waste of time. In short, neither Dan nor I led these meetings. We attended them. One could feel the energy, passion and trust dissipate like air leaking from a balloon.

Mark E. Brouker

Mark E. Brouker

It was clear that Dan and I needed to change our attitudes. We candidly discussed the culture of pessimism that we were creating and, more importantly, how it was sucking trust and the creative juices from the team. Over a handshake, we agreed to help each other curb our negativity and celebrate small victories that were indeed happening. We’d address the challenges, but not mire in them. We agreed to not let anyone hijack the meeting with their negativity.

We were more careful in the words we chose – we rid ourselves of cynical remarks. We were careful with our body language. No scowling or worried looks. Above all, we focused on staying positive. We’d invest a few minutes before meetings to reflect on past successes, however minor, and mention them at the beginning of the meeting. We’d then address the challenges, and close each meeting with a reminder, once again, of past successes.

Frustration and pessimism were slowly replaced with enthusiasm and optimism. Wins starting coming. More wins followed. Within 2 years, our small team was saving DoD over $100 million annually with no reduction in quality. Our small team was recognized within the industry as a center of excellence. Our success was nothing less than stunning.

How did this happen? It turns out that Dan’s and my behaviors had a much more profound impact on our team members than we could have ever imagined. In fact, studies have shown that the leader’s level of enthusiasm and optimism directly impacts their team members level of enthusiasm and optimism. Why is this the case? A study by Gallup found that employees who are supervised by highly enthusiastic leaders are 59 percent more likely to be enthusiastic than those supervised by unenthusiastic leaders.[1] In other words, the leader’s behaviors, in this case optimism and enthusiasm, are contagious. Further, studies have indeed shown that businesses led by enthusiastic and optimistic leaders were significantly more profitable than those led by apathetic and pessimistic leaders. [2] [3]

Can a leader’s level of enthusiasm and optimism really impact the bottom line? Unquestionably the answer is yes. The leader’s ability to influence in politics, academia, sports and yes, profitability in business, is profound. Those businesses led by leaders who understand, respect, and embrace the strong correlation between the leader’s level of enthusiasm and optimism as it relates to performance and profits – and most importantly practice these behaviors – are at a distinct competitive advantage.

Be a great leader – lead with enthusiasm and optimism.

Mark E. Brouker, Captain, United States Navy (retired), Pharm.D., MBA, FACHE, BCPS, is founder of Brouker Leadership Solutions, and author of Lessons From The Navy: How To Earn Trust, Lead Teams, And Achieve Organizational Excellence. For more information visit http://www.broukerleadershipsolutions.com/.

[1] Gallup, “State of the American Workplace, 2017.” Accessed February 12,2020.

[2] Michael Bush, A Great Place to Work for All (Oakland, CA: Berrett-Koehler, 2018), 26

[3] Marcus Buckingham, First, Break All the Rules (New York, NY: Simon and Schuster, 1999), 40

 

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JPMorgan to launch UK consumer bank within months

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JPMorgan to launch UK consumer bank within months 2

LONDON (Reuters) – JPMorgan Chase & Co will launch a digital consumer bank in Britain under its Chase brand within months, the U.S. banking giant said on Wednesday.

The bank said the new business had already recruited 400 people and would offer a range of products, including current accounts.

The UK venture will be led by Sanoke Viswanathan, who has been named chief executive. Viswanathan was previously chief administrative officer for JPMorgan’s corporate and investment bank.

The digital bank will be headquartered in London’s Canary Wharf financial district, with customers supported from a new call centre in Edinburgh.

Reports about a likely tilt by JPMorgan at the UK consumer market have been circulating for around a year, but the bank had publicly disclosed few details.

“The UK has a vibrant and highly competitive consumer banking marketplace, which is why we’ve designed the bank from scratch to specifically meet the needs of customers here,” said Gordon Smith, CEO of consumer and community banking for JPMorgan.

(Reporting by Iain Withers; Editing by Jan Harvey)

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European regulator clears Boeing 737 MAX airliner for return to service

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European regulator clears Boeing 737 MAX airliner for return to service 3

(Reuters) – Boeing Co’s modified 737 MAX airliner is safe to return to service in Europe, the European Union Aviation Safety Agency (EASA) said on Wednesday, lifting a 22-month flight ban after two crashes of the jet which caused 346 deaths.

EASA Executive Director Patrick Ky said it had “every confidence” that the plane was safe following an independent European review of changes ranging from cockpit software to maintenance checks and pilot training.

“Let me be quite clear that this journey does not end here,” Ky said in a statement.

“We have every confidence that the aircraft is safe, which is the precondition for giving our approval. But we will continue to monitor 737 MAX operations closely as the aircraft resumes service.”

Regulators around the world grounded the MAX in March 2019, after the crash of an Ethiopian Airlines jet five months after one flown by Indonesia’s Lion Air plunged into the Java Sea. A total of 346 passengers and crew members were killed in the two crashes.

The United States lifted its ban in November, followed by Brazil and Canada. China, which was first to ban the plane after the second crash, and which represents a quarter of MAX sales, has not said when it will act.

Relatives of some crash victims have strongly criticised the move the clear Boeing’s best-selling airplane.

EASA represents 31 mainly EU nations, excluding Britain which formally left the bloc this month. Britain is expected to issue its own separate approval on Wednesday.

(Reporting by Sudip Kar-Gupta, Rachit Vats; editing by Jason Neely)

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