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Volume XI, Number 63

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CNIL Fines Google and Amazon 135 Million Euros for Alleged Cookie Violations

On December 10, 2020, the French Data Protection Authority (the “CNIL”) announced that it has levied fines of €60 million on Google LLC and €40 million on Google Ireland Limited under the French cookie rules for their alleged failure to (1) obtain the consent of users of the French version of Google’s search engine (google.fr) before setting advertising cookies on their devices; (2) provide users with adequate information about the use of cookies; and (3) implement a fully effective opt-out mechanism to enable users to refuse cookies. On the same date, the CNIL announced that it has levied a fine of €35 million on Amazon Europe Core under the same rules for its alleged failure to (1) obtain the consent of users of the amazon.fr site before setting advertising cookies on their devices; and (2) provide adequate information about the use of cookies.

Background

The French cookie rules are laid down in (1) Article 82 of the French Data Protection Act, which implements into French law the provisions of the EU ePrivacy Directive governing the use of cookies; and (2) soft law instruments aimed at guiding operators in implementing Article 82 of the French Data Protection Act in practice.

While the provisions of Article 82 of the French Data Protection Act have remained unchanged, the CNIL revised its soft law instruments to take into account the strengthened consent requirements of the EU General Data Protection Regulation (“GDPR”). On July 18, 2019, the CNIL published new guidelines on the use of cookies and similar technologies (the “Guidelines”). The Guidelines repealed the CNIL’s 2013 cookie recommendations that were no longer valid in light of the GDPR’s consent requirements. The Guidelines were to be complemented by recommendations on the practical modalities for obtaining users’ consent to set or read non-essential cookies and similar technologies on their devices (the “Recommendations”). On October 1, 2020, the CNIL published a revised version of its Guidelines and its final Recommendations. The CNIL announced that it would allow for a transition period of six months to comply with the new cookie law rules (i.e., until the end of March 2021), and that it would carry out inspections to enforce the new rules after that transition period. However, the CNIL made clear that it reserves the right to take action against certain infringements, especially in cases of particularly serious infringements of the right to privacy. In addition, the CNIL announced that it would continue to investigate infringements of the previous cookie law rules.

Against that background, on December 2019, March 6 and May 19, 2020, the CNIL carried out three remote inspections of the amazon.fr website and an onsite inspection at the premises of the French establishment of the Amazon group, Amazon Online France SAS. On March 16, 2020, the CNIL also carried out a remote inspection of the google.fr site. These inspections aimed to verify whether Google LLC and Google Ireland Limited and Amazon Europe Core complied with the French Data Protection Act, and in particular with its Article 82, when setting or reading non-essential cookies on the devices of users living in France who visited google.fr and amazon.fr websites. In its press releases, the CNIL stressed that its sanctions against Google and Amazon punished breaches of obligations that existed before the GDPR and are not part of the obligations clarified by the new Guidelines and Recommendations.

CNIL’s Jurisdiction Over Google Ireland Limited’s and Amazon Europe Core’s Cookie Practices

Google and Amazon challenged the jurisdiction of the CNIL arguing that (1) the cooperation mechanism of the GDPR (known as the one-stop-shop mechanism) should apply and the CNIL is not their lead supervisory authority for the purposes of that mechanism; and (2) their cookie practices do not fall within the territorial scope of the French Data Protection Act. Pursuant to Article 3 of the French Data Protection Act, it applies to the processing of personal data carried out in the context of the activities of an establishment of a data controller (or data processor) in France. In that respect, Amazon argued that its French establishment was not involved in the setting of cookies on the amazon.fr site and that there is no inextricable link between the activities of the French establishment and the setting of cookies by Amazon Europe Core, the Luxembourg affiliate of the Amazon group, responsible for the European Amazon websites, including the French site. Google argued that, because the one-stop-shop mechanism should apply, its Irish affiliate, Google Ireland Limited, is the actual headquarters of the Google group in Europe and thus its main establishment for the purposes of the one-stop-shop mechanism. Accordingly, the Irish Data Protection Commissioner would be the only competent supervisory authority.

Inapplicability of the One-Stop-Shop Mechanism of the GDPR

In the initial version of its Guidelines, the CNIL made clear that it may take any corrective measures and sanctions under Article 82 of the French Data Protection Act, independently of the GDPR’s cooperation and consistency mechanisms, because the French cookie rules are based on the EU ePrivacy Directive and not the GDPR. Unsurprisingly, therefore, the CNIL rejected the arguments of Google and Amazon, considering that the EU ePrivacy Directive provides for its own mechanism, designed to implement and control its application. Accordingly, the CNIL concluded that the one-stop-shop mechanism of the GDPR does not apply to the enforcement of the provisions of the EU ePrivacy Directive, as implemented under French law.

To prevent such a situation in the future and ensure consistent interpretation and enforcement of both sets of rules, the European Data Protection Board (the “EDPB”) has called for the GDPR’s cooperation and consistency mechanism to be used for the supervision of the future cookie rules under the ePrivacy Regulation, which will replace the ePrivacy Directive. The CNIL did not wish to pre-empt this future development, and applied the relevant texts literally in its cases against Google and Amazon.

CNIL’s Territorial Jurisdiction

 The CNIL, citing the rulings of the Court of Justice of the European Union in the Google Spain and Wirtschaftsakademie cases, took the view that the use of cookies on the French site (google.fr and amazon.fr respectively) was carried out in the context of the activities of the French establishment of the companies, because that establishment promotes their respective products and services in France.

Controllership Status of Google LLC

Following his investigation, the Rapporteur of the CNIL considered that Google Ireland Limited and Google LLC are joint controllers in respect of the processing consisting in accessing or storing information on the device of Google Search users living in France.

Google argued that Google Ireland Limited is solely responsible for those operations and that Google LLC is a processor. Google stressed that (1) its Irish affiliate participates in the various decision-making bodies and in the different stages of the decision-making process implemented by the group to define the characteristics of the cookies set on Google Search; and (2) differences exist between the cookies set on European users’ devices and those set on the devices of other users (e.g., shorter retention periods, no personalized ads served to children within the meaning of the GDPR, etc.), which demonstrate the decision-making autonomy of Google Ireland Limited.

In its decision, the CNIL found that Google LLC is also represented in the bodies that adopt decisions relating to the deployment of Google products within the European Economic Area and in Switzerland, and to the processing of personal data of users living in those regions. The CNIL also found that Google LLC exercises a decisive influence in those decision-making bodies. The CNIL further found that the differences in the cookie practices were just differences in implementation, mainly intended to comply with EU law. According to the CNIL, those differences do not affect the global advertising purpose for which the cookies are used. In the CNIL’s view, this purpose is also determined by Google LLC, and the differences invoked by Google are not sufficient to demonstrate the decision-making autonomy of Google Ireland Limited. In addition, the CNIL found that Google LLC also participates in the determination of the means of processing since Google LLC designs and builds the technology of cookies set on the European users’ devices. The CNIL concluded that Google LLC and Google Ireland Limited are joint controllers.

Cookie Violations

Setting of advertising cookies without obtaining the user’s prior consent

The CNIL’s inspection of the google.fr website revealed that, when users visited that site, seven cookies were automatically set on their device. Four of these cookies were advertising cookies.

In the case of Amazon, the investigation revealed that, whenever users first visited the home page of the amazon.fr website or visited the site after they clicked on an ad published on another site, more than 40 advertising cookies were automatically set on their device.

Since advertising cookies require users’ prior consent, the CNIL concluded that the companies failed to comply with the cookie consent requirement of Article 82 of the French Data Protection Act.

Lack of adequate information provided to users

When the CNIL inspected the google.fr website, the CNIL found that an information banner was displayed at the bottom of the page, with the following note: “Privacy reminder from Google,” and two buttons: “Remind me latter” and “Access now.” According to the CNIL, the banner did not provide users with information regarding the cookies that were already set on their device. Further, that information was also not immediately provided when users clicked on the “Access now” button. Google amended its cookie practices in September 2020. However, the CNIL found that the new pop-up window does not provide clear and complete information to users under Article 82 of the French Data Protection Act. In the CNIL’s view, the new pop-up window does not inform users of all the purposes of the cookies and the means available to them to refuse cookies. In particular, the CNIL found that the information provided to users does not enable them to understand the type of content and ads that may be personalized based on their behavior (e.g., whether this is geolocation-based advertising), the precise nature of the Google services that use personalization, and whether this personalization is carried out across different services. Further, the CNIL found that the terms “options” or “See more” in the new window are not explicit enough to enable users to understand how they can refuse cookies.

When inspecting the amazon.fr website, the CNIL found that the information provided to users was neither clear, nor complete. The cookie banner displayed on the site provided a general and approximate description of the purposes of the cookies (“to offer and improve our services”). Further, according to the CNIL, the “Read more” link included in the banner did not explain to users that they could refuse cookies, nor how to do so. The CNIL found that Amazon Europe Core’s failure to provide adequate information was even more obvious in the case of users visiting the site after they had clicked on an ad published on another site. In this case, no information was provided to them.

Opt-out mechanism partially defective

In the case of Google, the CNIL also found that, when a user deactivated the ad personalization on Google Search by using the mechanism available from the “Access now” button, one of the advertising cookies was still stored on the user’s device and kept reading information destined for the server to which the cookie was attached. The CNIL concluded that the opt-out mechanism was partially defective.

CNIL’s Sanctions

In setting the fines in both cases, the CNIL took into account the seriousness of the breaches of Article 82 of the French Data Protection Act, the high number of users affected by those breaches, and the financial benefits deriving from the advertising income indirectly generated from the data collected by the advertising cookies. Interestingly, in the case of Google, the CNIL cited a decision of the French Competition Authority and referred to Google’s dominant position in the online search market.

In both cases, the CNIL noted that the companies amended their cookie practices in September 2020 and stopped automatically setting advertising cookies. However, the CNIL found that the new information provided to users is still not adequate. Accordingly, the CNIL ordered the three companies to provide adequate information to users about the use of cookies on their respective sites. The CNIL also ordered a periodic penalty payment of €100,000 (i.e., the maximum amount permitted under the French Data Protection Act) for each day of delay in complying with the injunction, commencing three months following notification of the CNIL’s decision in each case.

The CNIL addressed its decisions to the French establishment of the companies in order to enforce these decisions. The companies have four months to appeal the respective decision before France’s highest administrative court (Conseil d’Etat).

Read the CNIL’s decision against Google LLC and Google Ireland Limited and the CNIL’s decision against Amazon Europe Core (currently available only in French).

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Copyright © 2020, Hunton Andrews Kurth LLP. All Rights Reserved.National Law Review, Volume X, Number 349
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About this Author

In today’s digital economy, companies face unprecedented challenges in managing privacy and cybersecurity risks associated with the collection, use and disclosure of personal information about their customers and employees. The complex framework of global legal requirements impacting the collection, use and disclosure of personal information makes it imperative that modern businesses have a sophisticated understanding of the issues if they want to effectively compete in today’s economy.

Hunton Andrews Kurth LLP’s privacy and cybersecurity practice helps companies manage data and...

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