Court Upholds a Fine by the Data Protection Authority

On October 15, 2020, Federal Contentious-Administrative Court No. 8 confirmed a sanction imposed on Open Discovery SA., which consisted of AR$ 50,001 and the closure of the databases used to prepare its “Globinfo” credit reports.

The Data Protection Authority’s criterion was that the “Globinfo” credit report issued by Open Discovery SA violated the principle of data quality provided for in section 4 of Law No. 25,326 on Personal Data Protection (“Personal Data Protection Law”). According to the Authority, the report included the data of “possible relatives” and “possible neighbors” which was neither adequate nor relevant for assessing the data subject’s credit status; and was excessive considering the scope and purpose for which the data had been collected in the first place. Furthermore, the Data Protection Authority concluded that the collection of that personal data was unlawful because it was not related to the business or credit activities of the assignees under the terms of section 26, paragraph 5, of the aforementioned law.

Due to the violation of sections 4, paragraphs 1 and 3, and 26 of the Personal Data Protection Law, the Data Protection Authority understood that Open Discovery SA had committed a very serious breach and that the above sanctions applied.

Following a complaint filed by Open Discovery SA, seeking to annul the Data Protection Authority’s administrative decision, the trial judge (known locally as a “first instance” judge), after presenting the arguments of the parties and the regulatory framework relevant to the case, held that the administrative decision under consideration was valid because it met the requirements stipulated in section 7 of Law No. 19,549 on Administrative Procedure. In that vein, the judge held that: “[T]he fine imposed on Open Discovery SA is adequately justified by duly verified factual and legal grounds, and it is not evident that [the Data Protection Authority’s] decision is not reasoned or can be deemed unfounded, arbitrary, unlawful, or unreasonable.

As a result, the court rejected the claim and upheld the sanction against Open Discovery SA. Open Discovery SA filed an appeal, and the case is now pending a decision before the Court of Appeals.

This decision is relevant because it is the first of its kind where the courts upheld an administrative decision by the Data Protection Authority.