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26 July 2023

Data Compliance Obligations in Tech Industry

In today’s digital age, data is the lifeblood of the tech industry. However, as data becomes more valuable, protecting individuals’ privacy and ensuring data security have become paramount concerns. In South Africa, the tech industry operates in a landscape governed by robust data compliance obligations. In this blog we will broadly discuss the data compliance obligations that tech companies operating in South Africa must adhere to, to ensure they do not fall foul of the law. 

The Protection of Personal Information Act (“POPIA”)

The foundation of data compliance in South Africa is POPIA, which came into effect on 1 July 2020. POPIA aims to regulate how businesses collect, store, process, and share personal information within South Africa and abroad. It gives individuals, known as data subjects, greater control over their personal data and requires companies to implement adequate security measures to protect personal information from unauthorized access or data breaches. An interesting aspect to POPIA is that it not only protects the personal information of individuals but that of juristic persons as well. 

Tech companies in South Africa must comply with POPIA by undertaking the following:

Obtaining Consent: Before processing personal information, businesses must obtain explicit consent from data subjects and inform them of the purpose for which their data will be used. This is normally done through a privacy policy and by acceptance thereof before beginning to process data. 

Data Security: Companies must implement “appropriate, reasonable technical and organisational” security measures to protect personal information and prevent data breaches.

Data Subject Rights: POPIA grants data subjects certain rights, including the right to access, correct, and delete their data upon request. Companies have a responsibility to ensure data subjects are able to easily action any of their rights under POPIA. 

Data Transfer: When transferring data internationally, businesses must ensure that the receiving country offers an adequate level of data protection, or they must obtain explicit consent from data subjects for such transfers. Data transfers can be regulated within service level agreements or in distinct data processing agreements between the parties. 

Information Officer: Companies must appoint an information officer who will be responsible for the data compliance obligations of the company. Information officers are registered with the Information Regulator using its online portal accessible on its website. 

Furthermore, an important tenant of POPIA is the implementation of cybersecurity measures. These measures include: 

Regular Risk Assessments: Conducting comprehensive risk and privacy impact assessments to identify vulnerabilities and potential threats to data security of the company.

Staff Training: Training staff members to recognize and respond to cybersecurity threats effectively and ensure the company responds to all data subject requests lawfully.

Data Encryption: Implementing encryption protocols to protect personal data both in transit and at rest.

Incident Response Plan: Establishing a well-defined incident response plan to handle and record data breaches promptly and effectively to ensure compliance with POPIA and to mitigate any potential harm and loss. 

The Promotion of Access to Information Act (“PAIA”) 

Under PAIA, South African companies are obligated to provide access to information that is not only readily available but also actively inform individuals about their rights to access specific records held by the company. This act empowers citizens to request and receive information held by companies where they need this information to give effect to one of their human rights, subject to certain exemptions. 

To be compliant, companies must publish what is known as a PAIA Manual detailing the types of records they hold and the procedures for accessing them and their information they process under POPIA (POPIA and PAIA are related legislation). PAIA manuals must be published both on the company’s website and made available in their office. Companies must appoint an information officer (the same person appointed under POPIA) to handle PAIA requests. 

EU General Data Protection Regulation (“GDPR”) 

While South Africa has its own data protection regulations through POPIA, tech companies that offer services to EU citizens may also need to comply with the GDPR. The GDPR applies to the processing of all personal information of EU citizens and sets stringent data protection standards and imposes severe penalties for non-compliance.

If a South African tech company processes the personal data of EU citizens, they should:

Appoint a Data Protection Officer (DPO): Designate a DPO responsible for overseeing data protection practices. In most instances this will be the same person appointed as Information Officer. 

Cross-Border Data Transfers: Adhere to GDPR requirements for transferring personal data outside the EU. This will include signing what is known as the Standard Contractual Clauses (“SCC”). SCC’s were drafted by the European Commission to uniformly regulate the sharing of EU citizen personal data outside of the European Economic Area. 

GDPR Principles: Ensure compliance with GDPR’s principles, including data minimization, purpose limitation, and data accuracy.

In the dynamic landscape of the tech industry in South Africa, data compliance is not just a legal requirement but also an ethical imperative. Companies that prioritize data protection and comply with the relevant data privacy laws, such as POPIA, demonstrate their commitment to maintaining customer trust and upholding their social responsibility.

By obtaining explicit consent, implementing robust data security measures, and being proactive in responding to data breaches, tech companies can navigate the complex landscape of data compliance obligations and foster a culture of privacy and trust. Embracing data compliance not only protects businesses from legal liabilities but also strengthens their reputation as responsible custodians of personal information.

– Written by Lauren van der Byl