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Data and Security Incident reporting in Italy

Stress test on risk governance has begun

03 August 2018

Duties to report personal data and security incidents under the GDPR and the NIS Directive are now in force. The Italian Data Protection Authority reports: (i) a 500% increase in data breach reporting has been recorded since 25 May 2018 , (ii) 140 data breaches were recorded only in May 2018 and (iii) 330,000 individuals were affected by data breaches from March to May 2018. Failure to notify exposes businesses to the risk of penalties, claims for damages and reputational damage. Prevention is the key.

NOTIFICATION REQUIREMENTS
Under the GDPR

Data controllers (i.e. any organisation that determines why and how personal data are processed) must (i) notify a personal data breach to the supervisory authority  within 72 hours after becoming "aware" of it and (ii) communicate the personal data breach to the data subject without undue delay, when the personal data breach is likely to result in a high risk to the rights and freedoms of natural persons.

Data processors (i.e. any third party that processes personal data on behalf of the controller customer, e.g. service providers) must notify the controller without undue delay after becoming "aware" of a personal data breach. Legal responsibility to notify the supervisory authority continues to rest with the controller.

Personal data breaches are security incidents which according to the Article 29 Working Party ("29WP") may fall in these categories:

  • "Confidentiality breach", in case of unauthorised or accidental disclosure of personal data or unauthorised access to such data;
  • "Integrity breach", in case of unauthorised or accidental alteration of personal data
  • "Availability breach", in case of accidental or unauthorised loss of access to personal data or destruction of such data.
…and under the NIS Directive, now implemented in Italy

Under the NIS Directive, operators of essential services and digital service providers must notify, without undue delay, the NIS competent authority of any security incidents with significant/substantial impact on, (i) in the case of operators of essential services, the continuity of the essential services provided or, (ii) in the case of the digital services providers, the provision of ecommerce, search engines and cloud services.

The NIS Directive has been recently implemented in Italy with Legislative Decree no. 65 of 2018 (the "Decree"). The Decree clarifies that security incidents must be notified to the Italian computer security incident response teams (CSIRT), set up at the Presidency of the Council of Ministers, and to the NIS competent authority for the purpose of information. Penalties from Eur 25,000 to EUR 125,000 apply in case of failure to notify the CSIRT of a security incident.

Under the Decree, the Ministry competent for the operator’s business sector is the NIS authority competent to adopt specific security measures, supervise the operators of essential services and impose penalties. Each NIS competent authority identifies the operators of essential services based in Italy for its respective sector by 9 November 2018.

The table below lists the Italian NIS competent authorities for each business sector.

Sector

Italian NIS competent authority

Energy, oil and gas

Ministry of Economic Development

Transport (air, rail, water, road)

Ministry of Infrastructure and Transport 

Banking

Ministry of Economy and Finance

Financial market infrastructures

Ministry of Economy and Finance

Health sector

Ministry of Health

Drinking water supply and distribution

Ministry of Environment

Digital Infrastructure

Ministry of Economic Development

Personal data breaches are a cyber security issue

The Italian Data Privacy Authority highlighted the significant symmetry between data protection and cyber security. The 29WP also alerted that data protection requirements may overlap with cyber security requirements.

In particular, the 29WP noted that Digital Services Providers may have to (separately) report the same incident under both the GDPR and the NIS Directive. In this regard, the Decree (article 13) expressly provides that in case of incidents involving personal data breaches the NIS competent authority cooperates closely with the Italian Data Protection Authority.

The 29WP provides the following examples of personal data breaches arising out of cyber security violations:

  • a controller maintains an online service. As a result of a cyber attack on that service, personal data of individuals are exfiltrated;
  • a controller suffers a ransomware attack which results in all data being encrypted. No back-ups are available and the data cannot be restored. On investigation, it becomes clear that the ransomware’s only functionality was to encrypt the data, and that there was no other malware present in the system;
  • a controller operates an online marketplace and has customers in multiple Member States. The marketplace suffers a cyber-attack and usernames, passwords and purchase history are published online by the attacker.

For an overview on data/security breach notification duties, please refer to our earlier article Data and security incident reporting under GDPR, PSD2, NISD and eIDAS Regulation.

Actions

Organisations that have already implemented appropriate measures to face new requirements should monitor their reliability and keep their legal risk assessments up-to-date. All organisations should make an effort to prevent data breaches and, in any case, minimise their consequences, once occurred.

The 29WP clarifies that controllers should adopt measures to immediately establish that personal data breaches have occurred and act to avoid or contain their effects, such as encrypting personal data, ensuring that processing systems (e.g. data storage tools) are resilient, timely restoring availability and access to personal data after incidents, regularly testing the security system adopted.

In particular, with regard to data and security incidents, any organisations should have a security breach readiness strategy, to meet the 72-hour breach notification requirement and remember that, for security incidents under the NIS Directive, notification is mandatory without undue delay.

In all cases, a preliminary risk assessment is vital to take appropriate action and prevent incidents.

Key Take Away Issues
  • Personal data breaches under GDPR must be notified within 72 hours
  • Security incidents under NIS Directive must be notified without undue delay
  • Penalties up to EUR 10 million or 2% of global turnover for failure to notify personal data breaches
  • Penalties from EUR 25,000 to EUR 125,000 for failure to notify security incidents under Italian law
  • Personal data breaches treated as security and cyber security incidents
  • All businesses should assess risk in their organisations
  • Preventing incidents through an appropriate response plan is vital