Cloud services and the Swedish Personal Data Act


The key piece of Swedish legislation regarding handling of personal data is the Swedish Personal Data Act (the “Act”). The Act sets out certain requirements for any parties en-gaging in such activity. As more and more public and private entities are considering the use of so-called ‘cloud services’, and the data processed or stored often comprises of per-sonal data, there are good reasons to pinpoint the requirements imposed by the Act on the party handling personal data. The Swedish Data Inspection Board has as recently as in September 2011 published a general statement concerning the processing of personal data in cloud services, the essence of which is summarized below.

At the outset, it is important to note that, for the purposes of the Act, the party engaging a cloud provider is always the “Data Controller”, even when the actual processing is done by the cloud service provider or its subcontractors. The provider and its subcontractors take the role as the Data Controller’s “Data Processors” but the responsibility for compli-ance with the Act and other laws remains with the Data Controller.

The responsibilities for the Data Controller can be divided into the following five main categories:

Legality verification
Under the Act, the Data Processor may only process personal data in accordance with instructions from the Data Controller. Since providers of cloud services often stipulate the terms of their services themselves, the Data Controller must assess whether these terms are in accordance with the requirements of the Act before transferring the personal data to the cloud service provider. Such assessment must determine, amongst other things, whether there is a risk that the data will be used for other purposes than originally intended, whether the data may legally be transferred to a third country and whether the terms offered are sufficient to fulfil the demands on a data processor agreement. It re-mains the responsibility of the Data Controller to ensure that such agreement is entered into with the cloud service provider.

Risk and vulnerability analysis
The demands placed on the cloud service provider through the Act vary depending on the level of risk involved in the data processing, and higher integrity risks means higher de-mands on security. The Data Controller must conduct a risk and vulnerability analysis and decide whether it is possible to engage the cloud service provider or not. There are multiple well established methods of conducting a risk and vulnerability analysis. One method is using checklists; however caution should be observed in using such lists, as the list may not always be adapted to the cloud service in question.  

Personal data processor agreements
The Data Controller must usually ensure that there is a personal data processor agreement in place that complies with the requirements of the Act. The personal data processor agreement is either entered into by signing an agreement with each company that proc-esses personal data on behalf of the Data Controller or by agreeing to give a company a general mandate to engage sub-processors for the processing. If such mandate is given, the subcontractor’s agreement must clearly set out that the sub-processor is subject to the same obligations as the Personal Data Processor engaged by the Data Controller.

The Data Inspection Board also states the data processor agreement must be distinguish-able form the other terms of the agreement and that the Data Processor must not be able to unilaterally change the terms of the data processor agreement. In order for the terms to be distinguishable, it would seem that they should be separate and not interwoven in other clauses of an agreement.

Furthermore, it is stated that the requirement for a data processor agreement could in-clude that the processor agreement shall contain a number of obligations on the Data Processor, e.g. that the Data Processor is obligated to abide by Swedish law in the proc-essing, that it is obligated to implement adequate security measures in accordance with the Act, that data may only be processed in accordance with the Data Controller’s in-struction as well as ensuring that the Data Controller has the possibility to confirm that the various obligations are followed. However, stating that the requirement could mean that the agreement shall set out the now mentioned obligations, leaves a great deal of un-certainty as regards whether this is a requirement or not and, in essence, the statement seems to give precious little guidance in this respect.

The Data Inspection Board also mentions that there may be exemptions from the re-quirement to have a data processor agreement, where such an agreement would not add any value to the protection of the integrity, e.g. where the data stored is identical with data legally published on the Internet. However, to ascertain beforehand when such an exemption would apply could in other cases be more problematic and it would still seem prudent to implement a data processor agreement in case of any uncertainty.  

Control over personal data processors
The Data Controller has to be able to establish that all Data Processors take the appropri-ate security measures. The more sensitive the data being processed, the greater the re-quirement to examine the Data Processors will be. The Data inspection Board predicts that with regards to cloud services, this requirement may be difficult to uphold where sensitive data is concerned, as data may be transferred between subcontractors and coun-tries.

Third country issues
Finally, if the personal data will be processed by Data Processors in countries outside the EU/EEA, the Data Controller must ensure that one of the exceptions from the Act’s pro-hibition of transfer to third countries is applicable, e.g. consent, standard agreement terms or that the recipient is Safe Harbor certified.

It still remains to be seen whether all of the above requirements set out by the Swedish Data Inspection Board can realistically be achieved by service providers of cloud services aspiring to provide a standardised cloud service throughout the globe with as little tailor-ing for specific markets as possible.

For more information, please contact:
Jim Runsten
Bird & Bird
Tel:  +46 (0)8 506 320 00