Free Access to IAPP.CIPP-E.v2024-08-06.q168 with Valid Practice Test (Page 6)

Question 21

SCENARIO
Please use the following to answer the next question:
Javier is a member of the fitness club EVERFIT. This company has branches in many EU member states, but for the purposes of the GDPR maintains its primary establishment in France. Javier lives in Newry, Northern Ireland (part of the U.K.), and commutes across the border to work in Dundalk, Ireland. Two years ago while on a business trip, Javier was photographed while working out at a branch of EVERFIT in Frankfurt, Germany. At the time, Javier gave his consent to being included in the photograph, since he was told that it would be used for promotional purposes only. Since then, the photograph has been used in the club's U.K. brochures, and it features in the landing page of its U.K. website. However, the fitness club has recently fallen into disrepute due to widespread mistreatment of members at various branches of the club in several EU member states. As a result, Javier no longer feels comfortable with his photograph being publicly associated with the fitness club.
After numerous failed attempts to book an appointment with the manager of the local branch to discuss this matter, Javier sends a letter to EVETFIT requesting that his image be removed from the website and all promotional materials. Months pass and Javier, having received no acknowledgment of his request, becomes very anxious about this matter. After repeatedly failing to contact EVETFIT through alternate channels, he decides to take action against the company.
Javier contacts the U.K. Information Commissioner's Office ('ICO' - the U.K.'s supervisory authority) to lodge a complaint about this matter. The ICO, pursuant to Article 56 (3) of the GDPR, informs the CNIL (i.e. the supervisory authority of EVERFIT's main establishment) about this matter. Despite the fact that EVERFIT has an establishment in the U.K., the CNIL decides to handle the case in accordance with Article 60 of the GDPR. The CNIL liaises with the ICO, as relevant under the cooperation procedure. In light of issues amongst the supervisory authorities to reach a decision, the European Data Protection Board becomes involved and, pursuant to the consistency mechanism, issues a binding decision.
Additionally, Javier sues EVERFIT for the damages caused as a result of its failure to honor his request to have his photograph removed from the brochure and website.
Under the cooperation mechanism, what should the lead authority (the CNIL) do after it has formed its view on the matter?

A.Request that members of the seconding supervisory authority and the host supervisory authority co-draft a decision.
B.Submit a draft decision to other supervisory authorities for their opinion.
C.Submit a draft decision directly to the Commission to ensure the effectiveness of the consistency mechanism.
D.Request that the other supervisory authorities provide the lead authority with a draft decision for its consideration.

Question 22

When does the GDPR provide more latitude for a company to process data beyond its original collection purpose?

A.When the data has been pseudonymized.
B.When the data is protected by technological safeguards.
C.When the data serves legitimate interest of third parties.
D.When the data subject has failed to use a provided opt-out mechanism.

Question 23

What is a reason the European Court of Justice declared the Data Retention Directive invalid in 2014?

A.The requirements affected individuals without exception.
B.The requirements were financially burdensome to EU businesses.
C.The requirements specified that data must be held within the EU.
D.The requirements had limitations on how national authorities could use data.

Question 24

SCENARIO
Please use the following to answer the next question:
Due to rapidly expanding workforce, Company A has decided to outsource its payroll function to Company B. Company B is an established payroll service provider with a sizable client base and a solid reputation in the industry.
Company B's payroll solution for Company A relies on the collection of time and attendance data obtained via a biometric entry system installed in each of Company A's factories. Company B won't hold any biometric data itself, but the related data will be uploaded to Company B's UK servers and used to provide the payroll service. Company B's live systems will contain the following information for each of Company A's employees:
Name
Address
Date of Birth
Payroll number
National Insurance number
Sick pay entitlement
Maternity/paternity pay entitlement
Holiday entitlement
Pension and benefits contributions
Trade union contributions
Jenny is the compliance officer at Company A. She first considers whether Company A needs to carry out a data protection impact assessment in relation to the new time and attendance system, but isn't sure whether or not this is required.
Jenny does know, however, that under the GDPR there must be a formal written agreement requiring Company B to use the time and attendance data only for the purpose of providing the payroll service, and to apply appropriate technical and organizational security measures for safeguarding the data. Jenny suggests that Company B obtain advice from its data protection officer. The company doesn't have a DPO but agrees, in the interest of finalizing the contract, to sign up for the provisions in full. Company A enters into the contract.
Weeks later, while still under contract with Company A, Company B embarks upon a separate project meant to enhance the functionality of its payroll service, and engages Company C to help. Company C agrees to extract all personal data from Company B's live systems in order to create a new database for Company B.
This database will be stored in a test environment hosted on Company C's U.S. server. The two companies agree not to include any data processing provisions in their services agreement, as data is only being used for IT testing purposes.
Unfortunately, Company C's U.S. server is only protected by an outdated IT security system, and suffers a cyber security incident soon after Company C begins work on the project. As a result, data relating to Company A's employees is visible to anyone visiting Company C's website. Company A is unaware of this until Jenny receives a letter from the supervisory authority in connection with the investigation that ensues. As soon as Jenny is made aware of the breach, she notifies all affected employees.
Under the GDPR, which of Company B's actions would NOT be likely to trigger a potential enforcement action?

A.Their omission of data protection provisions in their contract with Company C.
B.Their failure to provide sufficient security safeguards to Company A's data.
C.Their engagement of Company C to improve their payroll service.
D.Their decision to operate without a data protection officer.

Correct Answer: C

While Company B made several mistakes in handling Company A's employee data, not all of them would likely trigger a potential enforcement action under the GDPR. Here's an analysis of each option:
A) Omission of data protection provisions in the contract with Company C: This is a clear violation of the GDPR. Company B, as the data controller, is responsible for ensuring that any third-party processors comply with data protection requirements. By omitting data protection provisions in the contract, Company B failed to take appropriate steps to ensure the security and privacy of the personal data. This would be a likely trigger for an enforcement action.
B) Failure to provide sufficient security safeguards to Company A's data: This is another violation of the GDPR. Company B has a legal obligation to implement appropriate technical and organizational security measures to protect personal data from unauthorized access, use, disclosure, alteration, or destruction. The outdated IT security system at Company C's U.S. server demonstrates a failure to meet this obligation. This would also be a likely trigger for an enforcement action.
C) Engagement of Company C to improve their payroll service: While outsourcing certain aspects of data processing is permitted under the GDPR, the data controller remains ultimately responsible for compliance. However, simply engaging another company to improve a service itself isn't necessarily a violation. As long as the proper safeguards are in place and the data processing is carried out in accordance with the GDPR, this action alone would not likely trigger an enforcement action.
D) Decision to operate without a data protection officer: The GDPR requires certain organizations to appoint a data protection officer (DPO). While Company B may be required to have a DPO depending on its size and activities, the absence of a DPO wouldn't automatically trigger an enforcement action. However, it could indicate a lack of compliance culture and contribute to other violations, increasing the likelihood of an enforcement action.
Therefore, while Company B made several mistakes, only the ones that directly violate specific data protection requirements, such as omitting data protection provisions in contracts or failing to implement appropriate security measures, are likely to trigger an enforcement action. Engaging a third-party to improve a service, as long as it's done in a compliant manner, isn't a violation in itself.

Question 25

SCENARIO
Please use the following to answer the next question:
WonderkKids provides an online booking service for childcare. Wonderkids is based in France, but hosts its website through a company in Switzerland. As part of their service, WonderKids will pass all personal data provided to them to the childcare provider booked through their system. The type of personal data collected on the website includes the name of the person booking the childcare, address and contact details, as well as information about the children to be cared for including name, age, gender and health information. The privacy statement on Wonderkids' website states the following:
"WonderkKids provides the information you disclose to us through this website to your childcare provider for scheduling and health and safety reasons. We may also use your and your child's personal information for our own legitimate business purposes and we employ a third-party website hosting company located in Switzerland to store the dat a. Any data stored on equipment located in Switzerland meets the European Commission provisions for guaranteeing adequate safeguards for you and your child's personal information. We will only share you and your child's personal information with businesses that we see as adding real value to you. By providing us with any personal data, you consent to its transfer to affiliated businesses and to send you promotional offers."
"We may retain you and your child's personal information for no more than 28 days, at which point the data will be depersonalized, unless your personal information is being used for a legitimate business purpose beyond 28 days where it may be retained for up to 2 years."
"We are processing you and your child's personal information with your consent. If you choose not to provide certain information to us, you may not be able to use our services. You have the right to: request access to you and your child's personal information; rectify or erase you or your child's personal information; the right to correction or erasure of you and/or your child's personal information; object to any processing of you and your child's personal information. You also have the right to complain to the supervisory authority about our data processing activities." What must the contract between WonderKids and the hosting service provider contain?

A.The requirement to implement technical and organizational measures to protect the data.
B.Controller-to-controller model contract clauses.
C.Audit rights for the data subjects.
D.A non-disclosure agreement.

Correct Answer: A

The GDPR (General Data Protection Regulation) applies to any organisation that processes personal data of EU residents, regardless of where the processing takes place. Therefore, WonderKids, as a data controller based in France, must comply with the GDPR when it transfers personal data to its hosting service provider in Switzerland, which acts as a data processor on behalf of WonderKids.
According to Article 28 of the GDPR, data controllers must only use data processors that provide sufficient guarantees to implement appropriate technical and organisational measures to ensure the protection of the rights of the data subjects and the security of the data. The data controller and the data processor must also enter into a written contract or other legal act that sets out the subject matter, duration, nature, and purpose of the processing, as well as the obligations and rights of the data controller.
The contract must include, among other things, the following provisions:
The data processor must process the personal data only on documented instructions from the data controller, including with regard to transfers of personal data to a third country or an international organisation, unless required to do so by EU or member state law; The data processor must ensure that persons authorised to process the personal data have committed themselves to confidentiality or are under an appropriate statutory obligation of confidentiality; The data processor must take all measures required pursuant to Article 32 of the GDPR, which relates to the security of the processing; The data processor must respect the conditions for engaging another processor, and inform the data controller of any intended changes concerning the addition or replacement of other processors, giving the data controller the opportunity to object to such changes; The data processor must assist the data controller in ensuring compliance with the obligations pursuant to Articles 32 to 36 of the GDPR, which relate to the security of the processing, the notification of personal data breaches, the communication of personal data breaches to data subjects, the data protection impact assessment, and the prior consultation with the supervisory authority; The data processor must, at the choice of the data controller, delete or return all the personal data to the data controller after the end of the provision of services relating to the processing, and delete existing copies unless EU or member state law requires storage of the personal data; The data processor must make available to the data controller all information necessary to demonstrate compliance with the obligations laid down in Article 28 of the GDPR and allow for and contribute to audits, including inspections, conducted by the data controller or another auditor mandated by the data controller.
Therefore, among the four options, the one that must be included in the contract between WonderKids and the hosting service provider is the requirement to implement technical and organisational measures to protect the data, as this is part of the data processor's obligations under Article 28 and Article 32 of the GDPR.
The other options are not mandatory under the GDPR, although they may be advisable or desirable depending on the circumstances. Controller-to-controller model contract clauses are used when personal data is transferred from one data controller to another data controller, not from a data controller to a data processor. Audit rights for the data subjects are not explicitly required by the GDPR, although the data controller must ensure that the data processor allows for and contributes to audits conducted by the data controller or another auditor mandated by the data controller. A non-disclosure agreement may be useful to protect the confidentiality of the personal data, but it is not sufficient to ensure the compliance with the GDPR, as it does not cover all the aspects of the data processing relationship.
Reference:
GDPR
Web Hosting and GDPR Compliance - What to Look For
The GDPR: Why you need to review your third-party service providers' security GDPR Compliance for Third-Party Service Providers: Vendor Management

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