Free Certified Information Privacy Professional/Europe (CIPP/E) Practice Questions

An entity’s website stores text files on EU users’ computer and mobile device browsers. Prior to doing so, the entity is required to provide users with notices containing information and consent under which of the following frameworks?

SCENARIO

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Zandelay Fashion (‘Zandelay’) is a successful international online clothing retailer that employs approximately 650 people at its headquarters based in Dublin, Ireland. Martin is their recently appointed data protection officer, who oversees the company’s compliance with the General Data Protection Regulation (GDPR) and other privacy legislation.

The company offers both male and female clothing lines across all age demographics, including children. In doing so, the company processes large amounts of information about such customers, including preferences and sensitive financial information such as credit card and bank account numbers.

In an aggressive bid to build revenue growth, Jerry, the CEO, tells Martin that the company is launching a new mobile app and loyalty scheme that puts significant emphasis on profiling the company’s customers by analyzing their purchases. Martin tells the CEO that: (a) the potential risks of such activities means that Zandelay needs to carry out a data protection impact assessment to assess this new venture and its privacy implications; and (b) where the results of this assessment indicate a high risk in the absence of appropriate protection measures, Zandelay may have to undertake a prior consultation with the Irish Data Protection Commissioner before implementing the app and loyalty scheme.

Jerry tells Martin that he is not happy about the prospect of having to directly engage with a supervisory authority and having to disclose details of Zandelay’s business plan and associated processing activities.

What would MOST effectively assist Zandelay in conducting their data protection impact assessment?

SCENARIO

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TripBliss Inc. is a travel service company which has lost substantial revenue over the last few years. Their new manager, Oliver, suspects that this is partly due to the company’s outdated website. After doing some research, he meets with a sales representative from the up-and-coming IT company Techiva, hoping that they can design a new, cutting-edge website for TripBliss Inc.’s foundering business.

During negotiations, a Techiva representative describes a plan for gathering more customer information through detailed Questionaires, which could be used to tailor their preferences to specific travel destinations. TripBliss Inc. can choose any number of data categories – age, income, ethnicity – that would help them best accomplish their goals. Oliver loves this idea, but would also like to have some way of gauging how successful this approach is, especially since the Questionaires will require customers to provide explicit consent to having their data collected. The Techiva representative suggests that they also run a program to analyze the new website’s traffic, in order to get a better understanding of how customers are using it. He explains his plan

to place a number of cookies on customer devices. The cookies will allow the company to collect IP addresses and other information, such as the sites from which the customers came, how much time they spend on the TripBliss Inc. website, and which pages on the site they visit. All of this information will be compiled in log files, which Techiva will analyze by means of a special program. TripBliss Inc. would receive aggregate statistics to help them evaluate the website’s effectiveness. Oliver enthusiastically engages Techiva for these services.

Techiva assigns the analytics portion of the project to longtime account manager Leon Santos. As is standard practice, Leon is given administrator rights to TripBliss Inc.’s website, and can authorize access to the log files gathered from it. Unfortunately for TripBliss Inc., however, Leon is taking on this new project at a time when his dissatisfaction with Techiva is at a high point. In order to take revenge for what he feels has been unfair treatment at the hands of the company, Leon asks his friend Fred, a hobby hacker, for help. Together they come up with the following plan: Fred will hack into Techiva’s system and copy their log files onto a USB stick. Despite his initial intention to send the USB to the press and to the data protection authority in order to denounce Techiva, Leon experiences a crisis of conscience and ends up reconsidering his plan. He decides instead to securely wipe all the data from the USB stick and inform his manager that the company’s system of access control must be reconsidered.

With regard to TripBliss Inc.’s use of website cookies, which of the following statements is correct?

SCENARIO

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Liem, an online retailer known for its environmentally friendly shoes, has recently expanded its presence in Europe. Anxious to achieve market dominance, Liem teamed up with another eco friendly company, EcoMick, which sells accessories like belts and bags. Together the companies drew up a series of marketing campaigns designed to highlight the environmental and economic benefits of their products. After months of planning, Liem and EcoMick entered into a data sharing agreement to use the same marketing database, MarketIQ, to send the campaigns to their respective contacts.

Liem and EcoMick also entered into a data processing agreement with MarketIQ, the terms of which included processing personal data only upon Liem and EcoMick’s instructions, and making available to them all information necessary to demonstrate compliance with GDPR obligations.

Liem and EcoMick then procured the services of a company called JaphSoft, a marketing optimization firm that uses machine learning to help companies run successful campaigns. Clients provide JaphSoft with the personal data of individuals they would like to be targeted in each campaign. To ensure protection of its

clients’ data, JaphSoft implements the technical and organizational measures it deems appropriate. JaphSoft works to continually improve its machine learning models by analyzing the data it receives from its clients to determine the most successful components of a successful campaign. JaphSoft then uses such models in providing services to its client-base. Since the models improve only over a period of time as more information is collected, JaphSoft does not have a deletion process for the data it receives from clients. However, to ensure compliance with data privacy rules, JaphSoft pseudonymizes the personal data by removing identifying

information from the contact information. JaphSoft’s engineers, however, maintain all contact information in the same database as the identifying information.

Under its agreement with Liem and EcoMick, JaphSoft received access to MarketIQ, which included contact information as well as prior purchase history for such contacts, to create campaigns that would result in the most views of the two companies’ websites. A prior Liem customer, Ms. Iman, received a marketing campaign from JaphSoft regarding Liem’s as well as EcoMick’s latest products. While Ms. Iman recalls checking a box to receive information in the future regarding Liem’s products, she has never shopped EcoMick, nor provided her personal data to that company.

Under the GDPR, Liem and EcoMick’s contract with MarketIQ must include all of the following provisions EXCEPT?

Read the following steps:

Discover which employees are accessing cloud services and from which devices and apps Lock down the data in those apps and devices

Monitor and analyze the apps and devices for compliance

Manage application life cycles

Monitor data sharing

An organization should perform these steps to do which of the following?

SCENARIO

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Financially, it has been a very good year at ARRA Hotels: Their 21 hotels, located in

Greece (5), Italy (15) and Spain (1), have registered their most profitable results

ever. To celebrate this achievement, ARRA Hotels' Human Resources office, based

in ARRA's main Italian establishment, has organized a team event for its 420

employees and their families at its hotel in Spain.

Upon arrival at the hotel, each employee and family member is given an electronic

wristband at the reception desk. The wristband serves a number of functions:

. Allows access to the "party zone" of the hotel, and emits a buzz if the user

approaches any unauthorized areas

. Allows up to three free drinks for each person of legal age, and emits a

buzz once this limit has been reached

. Grants a unique ID number for participating in the games and contests that

have been planned.

Along with the wristband, each guest receives a QR code that leads to the online

privacy notice describing the use of the wristband. The page also contains an

unchecked consent checkbox. In the case of employee family members under the

age of 16, consent must be given by a parent.

Among the various activities planned for the event, ARRA Hotels' HR office has

autonomously set up a photocall area, separate from the main event venue, where

employees can come and have their pictures taken in traditional carnival costume.

The photos will be posted on ARRA Hotels' main website for general marketing

purposes.

On the night of the event, an employee from one of ARRA's Greek hotels is

displeased with the results of the photos in which he appears. He intends to file a

complaint with the relevant supervisory authority in regard to the following:

. The lack of any privacy notice in the separate photocall area

The unlawful cross-border processing of his personal data

. The unacceptable aesthetic outcome of his photos

Why would consent NOT be considered an adequate legal basis for accessing the

party zone?

A U.S.-based online shop uses sophisticated software to track the browsing behavior of its European customers and predict future purchases. It also shares this information with third parties. Under the GDPR, what is the online shop’s PRIMARY obligation while engaging in this kind of profiling?

Start-up company MagicAl is developing an AI system that will be part of a medical device that detects skin cancer. To take measures against potential bias in its AI system, the IT team decides to collect data about users’ ethnic origin, nationality, and gender.

Which would be the most appropriate legal basis for this processing under GDPR, Article 9 (Processing of special categories of personal data)?

SCENARIO

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Gentle Hedgehog Inc. is a privately owned website design agency incorporated in

Italy. The company has numerous remote workers in different EU countries. Recently,

the management of Gentle Hedgehog noticed a decrease in productivity of their sales

team, especially among remote workers. As a result, the company plans to implement

a robust but privacy-friendly remote surveillance system to prevent absenteeism,

reward top performers, and ensure the best quality of customer service when sales

people are interacting with customers.

Gentle Hedgehog eventually hires Sauron Eye Inc., a Chinese vendor of employee

surveillance software whose European headquarters is in Germany. Sauron Eye's

software provides powerful remote-monitoring capabilities, including 24/7 access to

computer cameras and microphones, screen captures, emails, website history, and

keystrokes. Any device can be remotely monitored from a central server that is

securely installed at Gentle Hedgehog headquarters. The monitoring is invisible by

default; however, a so-called Transparent Mode, which regularly and conspicuously

notifies all users about the monitoring and its precise scope, also exists. Additionally,

the monitored employees are required to use a built-in verification technology

involving facial recognition each time they log in.

All monitoring data, including the facial recognition data, is securely stored in Microsoft Azure cloud servers operated by Sauron Eye, which are physically located in France.

What monitoring may be lawfully performed within the scope of Gentle Hedgehog's

business?

SCENARIO

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Brady is a computer programmer based in New Zealand who has been running his own business for two years. Brady’s business provides a low-cost suite of services to customers throughout the European Economic Area (EEA). The services are targeted towards new and aspiring small business owners. Brady’s company, called Brady Box, provides web page design services, a Social Networking Service (SNS) and consulting services that help people manage their own online stores.

Unfortunately, Brady has been receiving some complaints. A customer named Anna recently uploaded her plans for a new product onto Brady Box’s chat area, which is open to public viewing. Although she realized her mistake two weeks later and removed the document, Anna is holding Brady Box responsible for not noticing the error through regular monitoring of the website. Brady believes he should not be held liable.

Another customer, Felipe, was alarmed to discover that his personal information was transferred to a third- party contractor called Hermes Designs and worries that sensitive information regarding his business plans may be misused. Brady does not believe he violated European privacy rules. He provides a privacy notice to all of his customers explicitly stating that personal data may be transferred to specific third parties in fulfillment of a requested service. Felipe says he read the privacy notice but that it was long and complicated

Brady continues to insist that Felipe has no need to be concerned, as he can personally vouch for the integrity of Hermes Designs. In fact, Hermes Designs has taken the initiative to create sample customized banner advertisements for customers like Felipe. Brady is happy to provide a link to the example banner ads, now posted on the Hermes Designs webpage. Hermes Designs plans on following up with direct marketing to these customers.

Brady was surprised when another customer, Serge, expressed his dismay that a quotation by him is being used within a graphic collage on Brady Box’s home webpage. The quotation is attributed to Serge by first and last name. Brady, however, was not worried about any sort of litigation. He wrote back to Serge to let him know that he found the quotation within Brady Box’s Social Networking Service (SNS), as Serge himself had posted the quotation. In his response, Brady did offer to remove the quotation as a courtesy.

Despite some customer complaints, Brady’s business is flourishing. He even supplements his income through online behavioral advertising (OBA) via a third-party ad network with whom he has set clearly defined roles. Brady is pleased that, although some customers are not explicitly aware of the OBA, the advertisements contain useful products and services.

Based on the scenario, what is the main reason that Brady should be concerned with Hermes Designs’ handling of customer personal data?