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Smart Contracts and Smart Disclosure: Coding a GDPR Compliance Framework

Part of the Perspectives in Law, Business and Innovation book series (PLBI)

Abstract

This chapter analyses some of the main legal requirements laid down in the new European General Data Protection Regulation (GDPR) with regard to hybrid Cloud Computing transformations. The GDPR imposes several restrictions on the storing, accessing, processing and transferring of personal data. This has generated some concerns with regard to its practicability and flexibility given the dynamic nature of the Internet. The current architecture and technical features of the Cloud do not allow adequate control for end-users. Therefore, in order for the Cloud adopters to be legally compliant, the design of Cloud Computing architectures should include additional automated capabilities and certain nudging techniques to promote better choices. This chapter explains how to fine tune and effectively embed these legal requirements at the earlier stages of the architectural design of the computer code. This automated process focuses on Smart Contracts and Service Level Agreements (SLAs) frameworks, which include selection tools that take an information schema and a pseudo-code that follows a programming logic to process information based on that schema. The pseudo-code is essentially the easiest way to write and design computer code, which can check automatically the legal compliance of the contractual framework. It contains a set of legal questions that have been specifically designed to urge Cloud providers to disclose relevant information and comply with the legal requirements established by the GDPR.

Keywords

  • Smart contracts
  • European general data protection regulation (GDPR)
  • Smart disclosures
  • Nudges
  • Service level agreements (SLAs)
  • Unified modeling language (UML)
  • Pseudo-code

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Notes

  1. 1.

    Carnevale (2017), pp. 64–65; Wattenhofer (2016), p. 88.

  2. 2.

    Kost de Sevres (2016); Wattenhofer (2016), p. 88.

  3. 3.

    Wattenhofer (2016), p. 88; Swan (2015), p. 16.

  4. 4.

    See, e.g., generally, Morabito (2017); Swan (2015).

  5. 5.

    Varshney (2017).

  6. 6.

    Kost de Sevres (2016).

  7. 7.

    Mougayar (2015).

  8. 8.

    Lessig (2006), p. 1.

  9. 9.

    Post (2009), p. 129.

  10. 10.

    Lessig (2001), p. 283.

  11. 11.

    Asharaf and Adarsh (2017), p. 50.

  12. 12.

    Hogan (2017).

  13. 13.

    Myler (1998), p. 37.

  14. 14.

    Kamthane and Kamal (2012), pp. 79–80.

  15. 15.

    Ford (2015), p. 163; ISRD Group (2007), p. 192; ITL Education Solutions (2006), p. 222.

  16. 16.

    Brooks (1997), p. 27.

  17. 17.

    Agarwal et al. (2010), p. 130.

  18. 18.

    Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation). While the Regulation entered into force on 24 May 2016, it shall apply to all EU Member States from 25 May 2018. See European Commission, Reform of EU Data Protection Rules. http://ec.europa.eu/justice/data-protection/reform/index_en.htm. Accessed 10 October 2016.

  19. 19.

    Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data.

  20. 20.

    See, e.g., Mc Nealy and Flowers (2015), p. 199; Gjermundrød et al. (2016), p. 4.

  21. 21.

    Article 46 GDPR; Voigt and von dem Bussche (2017), p. 120.

  22. 22.

    See Article 4 (1) (c) of the GDPR; Svantesson (2013), p. 89; Hijmans (2016), p. 497.

  23. 23.

    See Recital 43, Article 7 (4) of the GDPR; Wisman (2017), p. 357.

  24. 24.

    See Article 33 of the GDPR; Müthlein (2017), p. 78.

  25. 25.

    See Articles. 12–14 of the GDPR; Quelle (2016), p. 143.

  26. 26.

    See Article 17 of the GDPR; Sobkow (2016), p. 36.

  27. 27.

    See Article 20 of the GDPR; see also Article 29 Data Protection Working Party, Guidelines on the right to data portability. Adopted on 13 December 2016. As last revised and adopted on 5 April 2017; see also Fosch Villaronga (2018), p. 232.

  28. 28.

    Cavoukian (2015), pp. 293 et seq.; see also Information and Privacy Commissioner of Ontario, https://www.ipc.on.ca/. Accessed 10 October 2017.

  29. 29.

    See Article 5 (1) (c) of the GDPR; Lynskey (2015), p. 206; Thouvenin (2017), p. 218.

  30. 30.

    See Article 25 (1) of the GDPR; see also D’Acquisto et al. (2015); Voigt and von dem Bussche (2017), p. 62.

  31. 31.

    Horrigan (2008).

  32. 32.

    Millham (2012), p. 2.

  33. 33.

    Balasubramanyam (2013), p. 102.

  34. 34.

    See, e.g., IBM Cloud Computing, Cisco Cloud Computing, Microsoft Azure, Rackspace and Amazon Web Services (AWS).

  35. 35.

    Naughton and Dredge (2011).

  36. 36.

    Moskowitz (2017), p. 59.

  37. 37.

    Hossain (2013), p. 14.

  38. 38.

    See, e.g., King and Squillante (2005), pp. 195 et seq.

  39. 39.

    See, e.g., generally, Kimball (2010).

  40. 40.

    Bragg (2006), p. 49; Svirkas (2004), pp. 96 et seq.

  41. 41.

    Carstensen et al. (2012), p. 244.

  42. 42.

    Griggs (2013).

  43. 43.

    Anderson (2015), p. 159.

  44. 44.

    Anderson (2015), p. 159.

  45. 45.

    Anderson (2015), p. 159; see also, letter from the Article 29 Data Protection Working Party to Google on Google Privacy Policy (Appendix: List of Possible Compliance Measures. Ref. Ares (2014) 3113072).

  46. 46.

    Anderson (2015), p. 159; see also Van Alsenoy et al. (2015).

  47. 47.

    See, e.g., Olislaegers (2012), p. 80.

  48. 48.

    See, e.g., Olislaegers (2012), p. 80.

  49. 49.

    See, e.g., generally, Jolls (2010); Diamond and Vartiainen (2007) (eds).

  50. 50.

    See, e.g., generally, Zamir and Teichman (2014) (eds).

  51. 51.

    Sunstein (2000) (ed); Sunstein (2014b).

  52. 52.

    See Thaler and Sunstein (2009).

  53. 53.

    Corrales and Jurčys (2016), p. 533.

  54. 54.

    Briggs et al. (2016), p. 117.

  55. 55.

    Willis (2015).

  56. 56.

    Bernheim et al. (2015), p. 35.

  57. 57.

    Whyte et al. (2015), p. 171.

  58. 58.

    Cwalina et al. (2015), p. 78.

  59. 59.

    Schweizer (2016), p. 111.

  60. 60.

    Corrales and Jurčys (2016), p. 533.

  61. 61.

    Ben-Porath (2010), p. 11.

  62. 62.

    Heshmat (2015), p. 243; Detels and Gulliford (2015), p. 782.

  63. 63.

    Detels and Gulliford (2015), p. 782.

  64. 64.

    Detels and Gulliford (2015), pp. 23 and 108; see also John (2013), p. 104; Quigley and Stokes (2015), p. 64; Thaler (2009); Hamilton and Zufiaurre (2014), p. 18.

  65. 65.

    European Commission (2014), Journalist Workshop on Organ Donation and Transplantation: Recent Facts and Figures. Available at: http://ec.europa.eu/health/sites/health/files/blood_tissues_organs/docs/ev_20141126_factsfigures_en.pdf. Accessed 13 April 2017.

  66. 66.

    Leitzel (2015), p. 137.

  67. 67.

    Cahn (2013), p. 148.

  68. 68.

    Corrales and Jurčys (2016), p. 533.

  69. 69.

    Sunstein (2015), p. 26.

  70. 70.

    Lindahl and Stikvoort (2015), p. 45.

  71. 71.

    Lindahl and Stikvoort (2015), pp. 28–30.

  72. 72.

    Lindahl and Stikvoort (2015), pp. 28–30.

  73. 73.

    Lindahl and Stikvoort (2015), pp. 28–30.

  74. 74.

    Tereszkiewicz (2016), p. 177; Bar-Gill (2012), p. 41.

  75. 75.

    Sunstein (2014a), p. 98.

  76. 76.

    Marc et al. (2015), p. 529.

  77. 77.

    Lindahl and Stikvoort (2015), pp. 28–30.

  78. 78.

    See, e.g., generally, Ho (2012), pp. 574–688.

  79. 79.

    Howard (2012).

  80. 80.

    Howard (2012).

  81. 81.

    Howard (2012).

  82. 82.

    Howard (2012); see, e.g., http://www.hellowallet.com.

  83. 83.

    Howard (2012); see, e.g., http://www.greenbuttondata.org.

  84. 84.

    Ho (2012), pp. 574–575.

  85. 85.

    Ho (2012), pp. 574–575.

  86. 86.

    For more details on “behavioral market failures” and default rules as nudging strategies see, e.g., Sunstein (2015), pp. 206 and 218.

  87. 87.

    Busch (2016), p. 231. According to Daniel Ho, however, this grading system contains serious flaws and does not guarantee 100% cleanliness down the road. See Ho (2012), pp. 574–688.

  88. 88.

    Ho (2012), pp. 574–575.

  89. 89.

    Grynbaum and Taylor (2012).

  90. 90.

    Fung et al. (2007), pp. 44, 50–51, 59–62, 68, 82–83, 120, 179.

  91. 91.

    Overgaard (1999), p. 99.

  92. 92.

    Debbabi et al. (2010), p. 37.

  93. 93.

    Debbabi et al. (2010), p. 37.

  94. 94.

    Patel (2005), p. 206.

  95. 95.

    Galis (2000), p. 87.

  96. 96.

    Muresan (2009), p. 233.

  97. 97.

    See, e.g., generally, Hennicher and Koch (2001), pp. 158–172.

  98. 98.

    Advanced Software-based Service Provisioning and Migration of Legacy Software (ARTIST). This project was partially funded by the European Commission under the Seventh (FP7—2007–2013) Framework Program for Research and Technological Development. For more details about the ARTIST project, see: http://www.artist-project.eu/content/r12-certification-model#sthash.zpJSBZ9t.dpuf. Accessed 18 May 2016.

  99. 99.

    ARTIST R12 Certification Model. Available at: http://www.artist-project.eu/content/r12-certification-model. Accessed 10 December 2016.

  100. 100.

    ARTIST R12 Certification Model. Available at: http://www.artist-project.eu/content/r12-certification-model. Accessed 10 December 2016.

  101. 101.

    Ford (2015), p. 163; ISRD Group (2007), p. 192; ITL Education Solutions (2006), p. 222.

  102. 102.

    Brooks (1997), p. 27.

  103. 103.

    Agarwal et al. (2010), p. 130.

  104. 104.

    Myler (1998), p. 37.

  105. 105.

    Agarwal et al. (2010), p. 130.

  106. 106.

    Agarwal et al. (2010), p. 130.

  107. 107.

    Gries and Gries (2005), pp. 84–86; Barlow and Barnett (1998), p. 99.

  108. 108.

    Myler (1998), p. 37.

  109. 109.

    Chulani et al. (2012).

  110. 110.

    Weale (2001), p. 6.

  111. 111.

    Blanc and Vento (2007), p. 192.

  112. 112.

    See, e.g., Barnitzke et al. (2011), pp. 51–55.

  113. 113.

    For further details with regard to encryption in the scope of the GDPR, see, e.g., Spindler and Schmechel (2016), pp. 163–177.

  114. 114.

    See Article 32 (1) (a) of the GDPR; regarding these protective measures see also Recitals 74, 75, 76, 77 and 83 of the GDPR.

  115. 115.

    Kousiouris et al. (2013), pp. 61–72.

  116. 116.

    Caelli et al. (1989), p. 144.

  117. 117.

    Williams (2007), p. 12.

  118. 118.

    Hustinx (2010), pp. 253–255; Chulani et al. (2012), pp. 7–10.

  119. 119.

    Kousiouris et al. (2013), pp. 61–72.

  120. 120.

    Forgó et al. (2013), p. 20.

  121. 121.

    See, e.g., Pearson and Charlesworth (2009), p. 137.

  122. 122.

    House of Commons, Great Britain Parliament, 2014, Responsible Use of data, p. 21, House of Commons, Science and Technology Committee, Fourth Report of Session 2014–15.

  123. 123.

    The contract read: “By placing an order via this Web site on the first day of the fourth month of the year 2010 Anno Domini, you agree to grant Us a non transferable option to claim, for now and for ever more, your immortal soul. Should we wish to exercise this option, you agree to surrender your immortal soul, and any claim you may have on it, within 5 (five) working days of receiving written notification from gamesation.co.uk or one of its duly authorized minions.” See: Fox News Tech, 7,500 Online Shoppers Unknowingly Sold Their Souls. Available at: http://www.foxnews.com/tech/2010/04/15/online-shoppers-unknowingly-sold-souls.html. Accessed 10 December 2016.

  124. 124.

    Lori (2012), p. 175.

  125. 125.

    Lindstrom (2011), p. 225.

  126. 126.

    Molinaro (2016), p. 35; Goodman (2015), p. 90.

  127. 127.

    Luzak (2010); Rosenthal (2012).

  128. 128.

    See, e.g., generally, Zanfir (2012), pp. 149–162.

  129. 129.

    See, e.g., Carpenter (2010), pp. 1–14.

  130. 130.

    See also Google Spain SL, Google Inc. v Agencia Española de Protección de Datos (es), Mario Costeja González, number C-131/12.

  131. 131.

    Lindsay (2014), p. 311.

  132. 132.

    See Article 17 of the GDPR; see also Lindsay (2014), p. 311.

  133. 133.

    La Fors-Owezynik (2017), p. 129.

  134. 134.

    See Article 17 (1) (2) (3) of the GDPR.

  135. 135.

    Reform of EU Data Protection Rules. EU Commission. Available at: http://ec.europa.eu/justice/data-protection/reform/index_en.htm. Accessed 3 July 2014.

  136. 136.

    Kousiouris et al. (2013), p. 63.

  137. 137.

    See also Articles 33, 34, 83 and Recitals 85, 87 and 88 of the GDPR; Article 29 Working Party, Guidelines on Personal data breach notification under Regulation 2016/679 adopted on 3 October 2017; Müthlein (2017), p. 78.

  138. 138.

    See, e.g., generally, ENISA Report on “Data breach notifications in the EU.” Available at: https://www.enisa.europa.eu/topics/data-protection/personal-data-breaches/personal-data-breach-notification-tool. Accessed 30 October 2017.

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Acknowledgements

This work has been partially supported by the EU within the 7th Framework Program under contract ICT-257115—OPTIMIS (Optimized Infrastructure Services) project. The authors would also like to thank all the researchers involved in the certification model of the ARTIST (Advanced Software-based Service Provisioning and Migration of Legacy Software) project. Without their technical explanations and support, this chapter would not contain a practical contribution to the state of the art.

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Corrales, M., Jurčys, P., Kousiouris, G. (2019). Smart Contracts and Smart Disclosure: Coding a GDPR Compliance Framework. In: Corrales, M., Fenwick, M., Haapio, H. (eds) Legal Tech, Smart Contracts and Blockchain. Perspectives in Law, Business and Innovation. Springer, Singapore. https://doi.org/10.1007/978-981-13-6086-2_8

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