‘Careless’ data sharing costs Bounty (UK) Ltd £400,000

Bounty (UK) Limited (“Bounty”), a pregnancy and parenting support club, has been subject to a £400,000 fine by the Information Commissioner’s Office (the “ICO”) for the unlawful sharing of personal data of more than 14 million people. The ICO has considered the volume of personal data and number of individuals affected by Bounty’s actions as “unprecedented in the history of the ICO’s investigations into the data broking industry”.

Bounty’s primary services are providing ‘Bounty Packs’ (sample packs of goods for the various stages of pregnancy) to new and expectant mothers and providing a mobile app allowing expectant mothers to track their pregnancies.

Bounty collected personal data from its members in a number of ways: its website, mobile app, ‘Mother-to-be pack’ hard copy cards and in person directly from new mothers in hospitals.

‘Careless’ data sharing

Unknown to its members, Bounty sold its members personal data to third party organisations in the data brokerage industry. The ICO’s investigation highlighted that Bounty shared the personal data records of 14.3 million new and expectant mothers and their newborn children. This personal data could then be subsequently shared up to 17 times in a year which resulted in the disclosure of an “extraordinarily high” 34 million personal data records. Bounty shared individuals’ personal data with 39 companies.

The ICO’s concluded that the data sharing was unlawful under the Data Protection 1998 (“DPA”) (pre-GDPR data protection regime) due to the following factors:

• Undisclosed third party recipients – Bounty’s website privacy policy stated that personal data may be shared with “selected third parties” but none of the third-party recipients were specifically named.
• Exceeding reasonable expectations – Bounty shared individuals’ personal data with credit reference, marketing and profiling agencies including large corporations such as Indicia, Axciom, Equifax and Sky which would be beyond members’ expectations about what was being done with their data.
• Invalid consent – Bounty relied on consent from its members for the collection and use of personal data, however the ‘consent’ provided by individuals was not specific or informed as individuals were not told that their contact details would be shared to the types of organisations mentioned above for marketing purposes. Due to the nature of the data sharing, the ICO also considered that Bounty could not rely on the ground of legitimate interests as the interests of its members, in this case, outweighed Bounty’s commercial interests.

The ICO concluded that, given this, Bounty was responsible for a serious breach of the fairness and lawfulness principle under the DPA.

The ICO’s reasoning

Under section 55A of the DPA, the ICO has the power to issue a monetary penalty notice if there has been a serious breach of the DPA and the breach has the potential to cause substantial damage or distress.

When assessing the seriousness of the breach, the ICO considered the following aggravating factors in respect of Bounty:

• Number of affected individuals – at least 34 million personal data records of over 14 million individuals were shared;
• Excessive processing – personal data records could be shared up to 17 times in a year which the ICO considered was “arguably disproportionate”;
• Duration of breach – the unlawful data sharing continued for seven months for online member registrations;
• Vulnerable data subjects – the individuals affected were new and expectant mothers and very young children;
• Breach of privacy policy – the disclosure of personal data to credit referencing, marketing and profile agencies was not mentioned in the information provided to its members (including Bounty’s privacy policy) and it could not be reasonably expected by the affected individuals as a result;
• Sensitive nature of personal data – the ICO considered that the particular sensitive nature of the information shared had the potential to cause significant distress to new or expectant mothers. The types of personal data disclosed were the number, age and gender of children and mothers’ pregnancy status;
• Individual loss of control over personal data – personal data was shared with large marketing agencies without individuals’ knowledge or consent.

The ICO considered the following mitigating factors when considered the level of fine to impose:

• Cessation of data sharing – Bounty voluntarily stopped sharing personal data with third party organisations in April 2018 (prior to the ICO’s initial investigation); and
• GDPR compliance – Bounty has improved its data protection compliance to meet the enhanced requirements under the General Data Protection Regulation and the Privacy and Electronic Communications Regulations.

Notwithstanding Bounty’s cessation of data sharing in April 2018 and  improved data protection compliance since the implementation of the GDPR, the ICO considered the breach as serious enough to justify a significant fine nearly reaching the upper limit of £500,000 (by comparison, the ICO recently fined Facebook £500,000 for serious breaches of data protection law). This fine highlights the ICO’s stance on the nature and extent of the unlawful data sharing.

Key takeaways – what can we learn from this decision?

“Invisible data processing” on individuals in the UK is becoming the subject of increased regulatory scrutiny, with the ICO taking tougher action against non-compliant organisations in the data broking industry. The decision against Bounty is a useful reminder for all organisations to (a) be clear with individuals about what they are doing with their personal data – ideally by naming the third-party recipients of personal data in privacy policies (in particular when relying on consent), (b) ensuring there is a valid lawful basis for sharing the personal data and (c) obtaining valid opt-in consent (and satisfying the higher threshold for consent under the GDPR) from individuals for direct marketing purposes.

The fine issued against Bounty was under the DPA where the ICO was limited to issuing a fine up to a maximum amount of £500,000. Now under the GDPR regime, the ICO has the power to issue much more substantial fines (up to 4% of an organisation’s annual global turnover) and it is likely that, had this enforcement occurred under the GDPR, the fine would have been much higher.

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