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SCENARIO Please use the following to answer the next question: Joe is the new privacy manager for Who-R-U, a Canadian business that provides DNA analysis. The company is headquartered in Montreal, and all of its employees are located there. The company offers its services to Canadians only: Its website is in English and French, it accepts only Canadian currency, and it blocks internet traffic from outside of Canada (although this solution doesn't prevent all non-Canadian traffic). It also declines to process orders that request the DNA report to be sent outside of Canada, and returns orders that show a non-Canadian return address. Bob, the President of Who-R-U, thinks there is a lot of interest for the product in the EU, and the company is exploring a number of plans to expand its customer base. The first plan, collegially called We-Track-U, will use an app to collect information about its current Canadian customer base. The expansion will allow its Canadian customers to use the app while traveling abroad. He suggests that the company use this app to gather location information. If the plan shows promise, Bob proposes to use push notifications and text messages to encourage existing customers to pre-register for an EU version of the service. Bob calls this work plan, We-Text-U. Once the company has gathered enough pre- registrations, it will develop EU-specific content and services. Another plan is called Customer for Life. The idea is to offer additional services through the company's app, like storage and sharing of DNA information with other applications and medical providers. The company's contract says that it can keep customer DNA indefinitely, and use it to offer new services and market them to customers. It also says that customers agree not to withdraw direct marketing consent. Paul, the marketing director, suggests that the company should fully exploit these provisions, and that it can work around customers' attempts to withdraw consent because the contract invalidates them. The final plan is to develop a brand presence in the EU. The company has already begun this process. It is in the process of purchasing the naming rights for a building in Germany, which would come with a few offices that Who-R-U executives can use while traveling internationally. The office doesn't include any technology or infrastructure; rather, it's simply a room with a desk and some chairs. On a recent trip concerning the naming-rights deal, Bob's laptop is stolen. The laptop held unencrypted DNA reports on 5,000 Who-R-U customers, all of whom are residents of Canad a. The reports include customer name, birthdate, ethnicity, racial background, names of relatives, gender, and occasionally health information. Who-R-U is NOT required to notify the local German DPA about the laptop theft because?
Correct Answer: A
According to the GDPR, a data breach must be notified to the supervisory authority of the member state where the controller or processor is established, unless the breach is unlikely to result in a risk to the rights and freedoms of natural persons1. The GDPR defines a controller as "the natural or legal person, public authority, agency or other body which, alone or jointly with others, determines the purposes and means of the processing of personal data"2. The GDPR also specifies that a controller or processor is considered to be established in the Union if it has "an effective and real exercise of activity through stable arrangements" in the Union, regardless of its legal form or location of its headquarters3. In this scenario, Who-R-U is not a controller established in the Union, because it does not have any stable arrangements in the Union that involve the processing of personal data. The company only offers its services to Canadians, and does not target or monitor individuals in the Union. The fact that it has purchased the naming rights for a building in Germany, which comes with a few offices, does not constitute an effective and real exercise of activity in the Union, as the offices do not include any technology or infrastructure for processing personal data, and are only used by executives while traveling internationally. Therefore, Who-R-U is not subject to the GDPR's data breach notification obligation, and is not required to notify the local German DPA about the laptop theft. Reference: Art. 33 GDPR - Notification of a personal data breach to the supervisory authority Art. 4 GDPR - Definitions Art. 3 GDPR - Territorial scope Guidelines 9/2022 on personal data breach notification under GDPR Guidelines 3/2018 on the territorial scope of the GDPR I hope this helps you understand the GDPR and data breach notification better. If you have any other questions, please feel free to ask me.