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Decision of the Czech Data Protection Authority

03/12/2018 by Andreas Schindler

Mall Group Logo Czech Republic

In our GDPR News we would like to present you not only rulings of the German and Austrian data protection authorities but also decisions of all other European data protection authorities. A few days ago, for example, the Czech supervisory authority(Úřad pro ochranu osobních údajů, English the office for personal data protection) imposed a fine on a domestic Internet store. This is an incident from before the GDPR, but the incident would have been a blatant violation even under the new European regulation.

Background

The Mall Group is an Internet group and, according to its own information, the largest e-commerce group in the Central and Eastern European region. It was formed by the merger of various Eastern European companies in 2016. At the same time, the company does not act as a pure mail order company, but has additional channels for stronger customer loyalty through various other products such as MallPay, MallTV, etc. In the Czech Republic, Mall.cz is the market leader in e-commerce.

Data breach

According to the Czech Data Protection Authority , unauthorized individuals were able to access the personal data of 735,000 customers between December 31, 2014 and August 2017. The records included first and last name, email address, password and phone number. The form of the passwords (hash or plaintext) was not disclosed. The data sets were also accessible for about a month at a Czech file hoster.

According to the authorities, the operators have not yet been able to provide an explanation as to how this data protection breach could have occurred.

Decision of the data protection authority

The Czech supervisory authority fined the company 1.5 million Czech crowns (approximately € 60,000) for a violation of the Czech Data Protection Act(Zákon č. 101/2000 Sb., o ochraně osobních údajů (účinné znění)) from 2000.  The maximum possible fine in this case would have been 5 million Czech crowns (CZK) (see section 45, paragraph 3).

GDPR

Although the Czech Data Protection Act dates from 2000, many passages are similar to the General Data Protection Regulation. The now invalid national provision requires adequate protection, the GDPR goes further here and requires adequate protection at the state of the art. In this way, the legislator wanted to ensure that the protection of personal data is evaluated on a regular basis.

In addition, the maximum fines have increased significantly as a result of the General Data Protection Regulation, with up to 20 million euros possible (see GDPR Article 83), whereas in the Czech Republic only CZK 10 million (approx. € 380,000) would have been possible to date (in the case of illegal processing of data requiring special protection or if the illegal processing poses a high risk to the private life of the data subjects).

Conclusion

The Czech data protection authority shows that data protection violations from the past are also dealt with. The amount of the penalty is explained by the large number of data records that were made public and the fact that the company concerned was unable to provide an explanation for the cause. Therefore, it must be feared that personal data will still not be protected in the best possible way. If further customer data is stolen, then mall.cz will have to face significantly more severe fines, as in this case the GDPR will apply and the data protection authority will take action against a repeat offender in this case.

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