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SCENARIO Please use the following to answer the next question: Brady is a computer programmer based in New Zealand who has been running his own business for two years. Brady's business provides a low-cost suite of services to customers throughout the European Economic Area (EEA). The services are targeted towards new and aspiring small business owners. Brady's company, called Brady Box, provides web page design services, a Social Networking Service (SNS) and consulting services that help people manage their own online stores. Unfortunately, Brady has been receiving some complaints. A customer named Anna recently uploaded her plans for a new product onto Brady Box's chat area, which is open to public viewing. Although she realized her mistake two weeks later and removed the document, Anna is holding Brady Box responsible for not noticing the error through regular monitoring of the website. Brady believes he should not be held liable. Another customer, Felipe, was alarmed to discover that his personal information was transferred to a third- party contractor called Hermes Designs and worries that sensitive information regarding his business plans may be misused. Brady does not believe he violated European privacy rules. He provides a privacy notice to all of his customers explicitly stating that personal data may be transferred to specific third parties in fulfillment of a requested service. Felipe says he read the privacy notice but that it was long and complicated Brady continues to insist that Felipe has no need to be concerned, as he can personally vouch for the integrity of Hermes Designs. In fact, Hermes Designs has taken the initiative to create sample customized banner advertisements for customers like Felipe. Brady is happy to provide a link to the example banner ads, now posted on the Hermes Designs webpage. Hermes Designs plans on following up with direct marketing to these customers. Brady was surprised when another customer, Serge, expressed his dismay that a quotation by him is being used within a graphic collage on Brady Box's home webpage. The quotation is attributed to Serge by first and last name. Brady, however, was not worried about any sort of litigation. He wrote back to Serge to let him know that he found the quotation within Brady Box's Social Networking Service (SNS), as Serge himself had posted the quotation. In his response, Brady did offer to remove the quotation as a courtesy. Despite some customer complaints, Brady's business is flourishing. He even supplements his income through online behavioral advertising (OBA) via a third-party ad network with whom he has set clearly defined roles. Brady is pleased that, although some customers are not explicitly aware of the OBA, the advertisements contain useful products and services. Based on the scenario, what is the main reason that Brady should be concerned with Hermes Designs' handling of customer personal data?
Correct Answer: C
According to the GDPR, personal data must be collected for specified, explicit and legitimate purposes and not further processed in a manner that is incompatible with those purposes1. This means that data controllers must inform data subjects about the purposes of data processing and obtain their consent or rely on another lawful basis for processing. Data controllers must also respect the principle of data minimisation, which means that they should only collect and process personal data that is adequate, relevant and limited to what is necessary for the purposes for which they are processed2. In the scenario, Brady transfers his customers' personal data to Hermes Designs, a third-party contractor, for the purpose of providing web page design services. However, Hermes Designs uses the data for a new purpose, which is creating sample customized banner advertisements and conducting direct marketing to the customers. This new purpose is not compatible with the original purpose for which the data was collected and transferred, and it is not likely that the customers have consented to it or that there is another lawful basis for it. Moreover, Hermes Designs may be processing more personal data than what is necessary for the original purpose, such as the customers' business plans and preferences. Therefore, Brady should be concerned with Hermes Designs' handling of customer personal data, as it may violate the GDPR and expose him to legal risks and reputational damages. Reference: 1: Art. 5(1)(b) GDPR Principles relating to processing of personal data 2: Art. 5(1) GDPR Principles relating to processing of personal data