On 7 March 2024, the Court of Justice of the European Union (CJEU or Court) rendered its judgement in case C-604/22, which concerned two sets of questions on the interpretation of the General Data Protection Regulation (GDPR) that had been raised by the Belgian Market Court in a case between IAB Europe and the Belgian Data Protection Authority (APD).
This article aims to provide the context in which the CJEU rendered its judgement, practical explanations of the answers the CJEU provided, and clarifications regarding the next steps for the rest of the appeal proceedings.
2 February 2022: APD hands down its decision
Following a coordinated set of complaints with different data protection authorities, the APD, as lead authority over the Belgium-established IAB Europe, conducted an investigation into IAB Europe’s transparency and consent framework (TCF). In its decision, adopted under the GDPR coordination procedure, the APD arrived at three main “findings”:
As a result of those “findings”, the APD considered that IAB Europe had committed various GDPR violations, in particular that:
(i) IAB Europe did not have a legal basis for the processing of TC String; and
(ii) IAB Europe did not have a valid legal basis for the subsequent processing of personal data carried out on the basis of preferences recorded in a TC string, such as personalised advertising.
The decision can be found here.
4 March 2022: IAB Europe appeals APD decision
IAB Europe filed an appeal against the APD decision before the Market Court (Court of Appeal of Brussels).
IAB Europe challenged the APD’s legal analysis and assessment of the facts supporting their findings that IAB Europe acts as a joint controller for both the processing of TC Strings and the subsequent processing of personal data carried out by TCF participants on the basis of those preferences, such as personalised advertising.
7 September 2022: Belgian Market Court confirms procedural irregularities by the APD and refers questions to the CJEU
The Market Court rendered an interim ruling on IAB Europe’s appeal, in which it confirmed - in line with IAB Europe’s procedural arguments - that the APD decision was insufficiently substantiated and failed to meet the relevant standards for proper investigation and fact-finding.
The Market Court also decided to refer two preliminary questions to the CJEU prior to resuming its examination of the merits of the case, namely (i) whether the TC String constitutes personal data under the GDPR and (ii) whether IAB Europe should be considered to be a joint controller for the processing of TC Strings and for further processing of data for subsequent purposes such as digital advertising.
The precise questions that were referred to the CJEU can be found here. The interim ruling of the Market Court setting out the procedural irregularities with the APD’s investigation can be found here (only available in Dutch).
7 March 2024: CJEU renders its judgement
In its response to the questions referred by the Market Court, the CJEU highlights general principles and the various facts and circumstances that the Market Court needs to take into account and verify in order to apply the GDPR appropriately to the case at hand.
The appeal proceedings will now resume before the Belgium Market Court, which will have to carry out the various factual verifications required by the CJEU and pursue its examination of IAB Europe’s substantive arguments.
The judgement of the CJEU can be found here.
Is the TC String personal data for IAB Europe? Yes, if certain circumstances are met.
The CJEU establishes that a TC String “relates to a natural person” because it contains “the individual preferences of a specific user regarding his or her consent to the processing of personal data concerning him or her”, and provides two cumulative criteria which must be met for a TC String to be considered personal data from the perspective of IAB Europe.
First, the TC String has to be associated with other data points “such as, inter alia, the IP address of the device of such a user”, since that information “may make it possible to [...] identify the person specifically concerned by” the TC String. Although the CJEU suggests that the combination of a TC String with additional data may make it “identifiable”, the Court does not appear to consider that the TC String in isolation should be considered personal data.
Second, IAB Europe has to have “reasonable means allowing it to identify a particular natural person from a TC String”. The fact that IAB Europe cannot on its own and without enlisting other actors combine the TC String with other data points is not relevant, as long as IAB Europe can theoretically access such data “on the basis of the information which its members and other organisations participating in the TCF are required to provide to it”. The CJEU drew upon the APD decision’s erroneous assumption that IAB Europe may require access to such data, which will now be subject to verification by the Market Court.
| What does it mean for TCF participants? The reasoning from the CJEU over the TC String is a useful reminder of the Breyer judgement of 19 October 2016 [case C-582/14] and of the practical application of Recital 26 of the GDPR. The CJEU’s ruling further reinforces the notion that the concept of “personal data” is relative to a particular organisation or person’s ability to link that information to a natural person (directly or through additional information held by a third party and that can be demanded by the organisation or person). Put differently, data can be personal data from one company’s perspective but not from another company’s perspective. The same reasoning can therefore be applied by TCF participants when assessing the nature of the information they collect and process, in particular to assess whether the TC String as well as other data points could be considered personal data from their perspective when associated with identifiable information. Anticipating the answer provided by the CJEU, the TCF working groups developed a comprehensive data category taxonomy as part of TCF v2.2 that enables TCF participants to provide end-users with enhanced transparency over the processing of TC Strings. The TCF working groups will continue improving the Framework to accommodate further the clarity provided by the CJEU in their ruling. |
Is IAB Europe a joint data controller for the processing of TC String? Yes, if certain circumstances are met.
The CJEU considers that IAB Europe can be viewed as a joint controller for the creation and use of TC Strings by publishers and vendors because it jointly determines the purpose and means of the processing.
First, IAB Europe should be regarded, according to the CJEU and subject to verification by the Market Court, as ”exerting influence over the personal data processing operations at issue in the main proceedings, for its own purposes”, namely the processing of TC Strings. The CJEU found that IAB Europe had an interest in facilitating the selling and buying of ad placements over the Internet in compliance with the EU data protection framework. As a result, the Court establishes that IAB Europe jointly determines the purpose of processing the TC String.
Second, the Court considered that IAB Europe provides binding rules and specifications for its processing, and that this is to be viewed as jointly determining the means of processing the TC String. The Court notably drew upon the assumption that “the TCF constitutes a framework of rules which the members of IAB Europe are supposed to accept in order to join that association” to come to this conclusion. However, it is incorrect that IAB Europe’s membership is conditional to participation in the TCF, and several members of IAB Europe do not implement the TCF in any capacity. The Court’s assumption will therefore need to be subject to further verification by the Market Court.
The Court also confirms that the fact that IAB Europe may not have access to the personal data processed (the TC String) does not prevent it from qualifying as a joint controller, in line with previous case law.
| What does it mean for TCF participants? IAB Europe’s qualification as a joint controller for the processing of TC Strings is subject to a number of factual verifications to be carried out by the Market Court as part of the ongoing appeal. IAB Europe also challenged the fact that the APD failed to clearly delineate its responsibilities over the processing. As a consequence, TCF participants should not expect related changes to the TCF in the short-term. However, this broad interpretation of the concept of controllership is likely to have a negative impact on the ability for organisations to develop standards, norms and best practices for the European market in the future. Indeed in practice, all standard-setting bodies – just like IAB Europe – have an interest in developing solutions that provide utility to the market(s) they intend to serve. |
Is IAB Europe a joint data controller for subsequent processing performed on the basis of the preferences recorded in TC Strings? No, it is not.
When examining the issue of IAB Europe’s possible role as “joint controller”, the CJEU made a very clear distinction between two scenarios:
(i) the creation and use of TC Strings by TCF participants,
(ii) the subsequent processing of personal data carried out by TCF participants on the basis of the preferences recorded by TC Strings, such as personalised advertising.
In relation to that second scenario, the CJEU stressed that “a natural or legal person cannot be regarded as a controller […] in respect of [processing] operations that precede or are subsequent in the overall chain of processing for which that person does not determine either the purposes or the means”.
This clarifies that even if there is joint controllership for one processing operation, such joint controllership does not necessarily extend to preceding or subsequent processing operations. Instead, the assessment of joint controllership must be carried out separately for each processing operation. The CJEU makes an analogy here with its Fashion ID ruling of 29 July 2019 (case C‑40/17), where a website operator and a social media service provider were deemed to be joint controllers for only a limited part of the broader chain of processing operations.
In IAB Europe’s case, the CJEU stated that “it can be ruled out that any joint controllership of that sectoral organisation extends automatically to the subsequent processing of personal data carried out by third parties”, indicating in particular that the “subsequent processing of personal data carried out by [website/app] operators and by third parties on the basis of” the preferences recorded in a TC String “does not appear to involve the participation of IAB Europe”.
Although this part is also “subject to the verifications which are for the referring court to carry out”, the CJEU emphasised clearly that the facts do not suggest that there is any “influence” by IAB Europe over the determination of the purposes and means of such subsequent processing.
| What does it mean for TCF participants? The CJEU conclusion on this last point is particularly important, as the APD’s erroneous qualification of IAB Europe as a controller over subsequent processing served as a basis for the authority’s assessments of the validity of legal bases established through the TCF and corresponding sanctions imposed on IAB Europe. Notwithstanding the misguided qualification of IAB Europe as a joint data controller for such processing, the TCF working group already made several iterations to the TCF that were released as part TCF v2.2 in order to increase the compliance utility of the TCF for its participants. These evolutions were intended to address the concerns that a number of Data Protection Authorities have expressed in relation to such subsequent processing, some of them based on the action plan that IAB Europe submitted to and validated by the APD in the context of their February 2022 decision (for example in respect to the reliance on legitimate interest as a GDPR legal basis for advertising & content personalisation). |
