Timely guidance from the Privacy Commissioner - APP guidelines released

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26 February 2014

As companies finalise their compliance preparations ahead of Australia’s privacy law reforms taking effect in March 2014, the Privacy Commissioner has released its guidelines to the new Australian Privacy Principles (APPs). The long-awaited final version of the APP guidelines represent welcome guidance as to how the Privacy Commissioner will interpret the APPs and what “good privacy practice” will look like from 12 March 2014.

WHAT’S CHANGED?

The guidance remains, in many respects, the same as in the draft version released for public consultation in August 2013.  However, there are some noteworthy differences, including further explanation of the key concepts that underpin the APPs and practical tips for implementing a privacy compliance program.  These include:

Privacy Policy may contain some general descriptions

The APP guidelines now clarify that a company is not expected to include in its privacy policy its normal business practices (such as auditing, business planning, billing and de-identifying personal information).  A company could also indicate the range of people or entities to which personal information is usually disclosed or the functions that are contracted out. 

For companies with extensive overseas networks or offshore outsourced services, the guidelines also provide some welcome relief in respect of the new requirement to provide an up-to-date list of the countries to which it is likely to disclose personal information.  In addition to the option of annexing a list of countries to the privacy policy or providing a link to a webpage to a regularly updated list, the APP guidelines now provide that, where it is not practicable to specify all of the likely overseas countries, a company could identify general regions, such as the EU.  Whilst this provides a practical solution for keeping a privacy policy up-to-date (rather than amending and re-publishing each time a new country is added), the requirement in APP 1.4(g) (and the related requirement in APP 5.2(j)) still presents a compliance burden for many companies and keeping the list up-to-date will need to form part of any privacy compliance program. 

Privacy notices can be layered and given in a number of formats

Due to the additional level of detail that must be provided to an individual when a company collects personal information, many companies have found that their new privacy notices (also known as “privacy collection statements”) closely resemble their full privacy policy. 

The APP guidelines provide some practical guidance on how companies can notify individuals of the collection of personal information under new APP 5.  These include:

  • Notification may be provided in layers (as can a privacy policy).  The guidelines give the example of providing brief privacy notices on forms or signs that can be supplemented by longer notices made available online or in brochures.  This will certainly assist anyone who operates CCTV cameras or collects information through competition entry forms, for example.
  • Notification may be provided through a variety of formats, such as use of a pre-recorded or scripted notice for use by call centre agents.  Full notices may also be published on-line (these will need to be specific to the particular company collecting the information and the proposed use/disclosure.  If there is more than one operating business or brand that interfaces with customers, then each will need its own notice or notices).
  • If it is not reasonable to notify the full range of matters in APP 5, the guidelines provide that the notice could refer to the relevant parts of the privacy policy (such as likely overseas disclosures), provided that the privacy policy contains specific information about these matters and is not expressed in general terms.

The important compliance principle to remember is that the notice must be clearly expressed, cover all the matters listed in APP 5 and provided either prior to or at the point of collection of personal information (or as soon as reasonably practicable thereafter).  

“Bundled consent” is okay (subject to a few conditions)

One of the key concepts underpinning the new APPs relates to the giving of consent by an individual: where an individual’s consent is required for a particular handling of their personal information, consent must be given voluntarily.  This generally precludes a company from “bundling consent” (the guidelines explain that this refers to “bundling” together multiple requests for consent to a wide range of dealings with their personal information, without giving the individual the opportunity to choose which dealings they agree to, and which they do not).  

However, for many companies, it will not be practical or reasonable to “unbundle” requests for consent; the result of which would be lengthy and unruly privacy policies and collection statements (which undermines the fundamental tenant of transparent handling of personal information).  The guidelines provide some parameters to a company that is contemplating using bundled consent to consider (see page 9 of the guidelines) and weigh against its obligation to ensure that consent is obtained voluntarily.  One example may be to ensure that the privacy policy clearly sets out the various different consequences of not providing personal information, rather than simply providing a “no personal information equals no service” statement that is common in privacy policies.

Information collected by cookies will not always be personal information

Public concern was raised over the position taken in the draft guidelines that information obtained through the use of cookies would amount to “collection” of personal information.  This had the potential to create a significant privacy compliance burden, whether or not the web-browsing information collected by cookies enabled the website owner to identify (or reasonably identify) visitors to its website. 

The position is now clarified: analytical information collected by cookies (for example, number of times a page is visited and other information collected through the use of Google Analytics and similar tools) will not be personal information for the purposes of the Privacy Act, unless the individual is reasonably identifiable.  Companies will still need to exercise caution (and comply with their privacy obligations) when using cookies and other web-tracking tools that do enable an individual to be reasonably identified. 

Online behavioural advertising is “direct marketing” if it uses personal information

Online behavioural advertising is the use of an individual’s web-behavioural data (collected by cookies) for the purposes of displaying online targeted advertising to that individual.  This practice is becoming increasingly common on social media sites. 

The guidelines retain the explanation that online behavioural advertising practices that use personal information will be “direct marketing” for the purposes of new APP 7.  (Displaying an advertisement on a website, where it will be viewed by all visitors to that website, and is not targeted to a particular individual using that individual’s personal information, is not direct marketing).

This means that companies engaging in online behavioural advertising will need to consider issues of consent and how to provide the requisite simple means of “opting-out”.  This will be complex and raises a number of practical compliance issues, largely due to the fact that online behavioural advertising relies on the use of cookies (and data collected by cookies), which are stored on individuals’ devices.  For example, how does a company manage an individual’s opt-out request?  Perhaps we will see a move to a similar cookie-regulation regime as exists in the EU and require companies to obtain express consent from website users prior to using cookies.

Hacking and cyber attacks are not a “disclosure” of personal information

The guidelines clarify what has been a point of concern for many: where a company’s systems are hacked or otherwise subject to unauthorised access by a third party, this will not amount to disclosure by the company (and the company will not be on the hook for non-compliance with the APPs).  However, this will only be the case where the company has taken reasonable steps to protect the security of the personal information it holds.  The guidelines provide detailed comments as to what “reasonable steps” will be for the purposes of new APP 11 (security of personal information).

Some salt left on the bread

Unfortunately, there are a few points of interpretation that have not been further clarified (despite submissions during the public consultation phase). 

In particular, the guidelines do not offer any further clarification in respect of cloud computing, in particular, the point at which the use of a cloud service becomes an offshore data transfer.  The guidelines maintain the comments contained in the draft version: that is, there are certain circumstances in which the use of an offshore cloud-based service to store personal information may not amount to “disclosure” of personal information (but rather a “use” of personal information).  These circumstances generally require a company to make an assessment as to its retained level of control of the data stored in the cloud.  For anyone who has negotiated a cloud service agreement, this can be a difficult assessment to make.  Given that the company would be accountable for a breach of the APPs by its cloud service provider (if the service was found to, in fact, amount to an offshore disclosure), relying on the guidelines as a basis for not complying with APP 8, seems risky at this early (and untested) stage of the reforms. 

Another area that we had hoped to see some clarification was the interaction between the direct marketing requirements in APP 7 and other direct marketing-related laws and regulations, including the Spam Act 2003 and Do Not Call Register Act 2006.  APP 7.8 provides that the principle in APP 7 does not apply “to the extent that” these other laws apply.  Some further guidance as to the meaning of “to the extent that” would have been welcomed, particularly for companies with large and sophisticated direct marketing functions that already have spam compliance programs in place and are looking to streamline compliance programs across digital, telephony, mobile and hard copy marketing channels. 

Watch this space

As with any substantive change in law and regulation, we will need to wait and see how the Privacy Commissioner applies the APPs and exercises its new (and extended) powers under the reformed Privacy Act.  It is also important to bear in mind that the APPs are principles-based law and the APP guidelines cannot be relied on as legal advice.  That said, for companies looking to finalise (or indeed commence) a privacy compliance program, the final version of the APP guidelines could not have come sooner. 

The APP Guidelines are available on the Office of the Australian Information Commissioner’s website here.

If you would like assistance with implementing your privacy compliance program, please contact a member of the Corrs Privacy Reforms Working Group in your local Corrs office.


The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.


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