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In brief

Under the current Taiwan Personal Data Protection Act (PDPA), there is no independent data protection authority. The enforcement of the PDPA has been conducted by the central government authority in charge of the industry concerned or the local government concerned (collectively “Competent Authority“).

Due to an increase in cases of personal data breaches in recent years with incidents affecting large numbers of data subjects, critics have raised concerns about the existing penalties being too lenient to halt the frequent data breaches. In a high-profile case involving the secondary use of national health insurance data, the Taiwan Constitutional Court ruled in August 2022 that the lack of independent data protection authority is against the Constitution and requested the establishment of the relevant legal system within three years. In response, the Taiwan Legislative Yuan passed the Amendment to the Personal Data Protection Act (“Amendment“) on 16 May 2023, to address these concerns.


In depth

Under Article 27 of the PDPA, a non-government agency in possession of personal data files should implement proper security measures to prevent the personal data from being stolen, altered, damaged, destroyed or disclosed. The central government authorities in charge of the industries concerned may designate and order certain non-government agencies to establish a security and maintenance plan for the protection of personal data files and a guideline on disposing personal data following a business termination. If a non-government agency violates Article 27, the Competent Authority may order the non-government agency to rectify the violation within a specified period. If the non-government agency fails to rectify the violation in time, a fine between NTD 20,000 (approximately USD 666) and NTD 200,000 (approximately USD 6,666) will be imposed for each occurrence of the violation.

Increased fines for data breaches

The Amendment increases fines for violation of Article 27 of the PDPA to a range of NTD 20,000 (approximately USD 666) to NTD 2 million (approximately USD 66,666), which can now be imposed at the same time as the order to rectify the violation within a specified period. Failure to rectify within the specified period will be subject to cumulative fines in the range of NTD 150,000 (approximately USD 5,000) to NTD 15 million (approximately USD 500,000). For severe violations, fines can be increased to the range of NTD 150,000 (approximately USD 5,000) to NTD 15 million (approximately USD 500,000) in the first place.

This part of the Amendment will become effective after being published by the President.

Establishment of the Personal Data Protection Commission

The Amendment also designates the new Personal Data Protection Commission (PDPC) as the exclusive Competent Authority for personal data protection.

The preparatory office for the PDPC is expected to be established as early as August 2023. The next phase of preparation will be drafting the organizational law for the PDPC, with the goal of submitting the draft to the Taiwan Legislative Yuan for review in 2024. The initial staffing for the preparatory office is expected to consist of 40 to 50 officials responsible for handling personal data protection matters.

Impact

The Amendment reflects the Taiwan government’s response to concerns regarding the current light touch enforcement of the PDPA. The increased fines for data breaches demonstrate the government’s commitment to holding personal data collectors accountable for violations of their data protection obligations. With the establishment of a specialized and independent data protection authority, PDPC, it is expected that the enforcement of the PDPA would become much stronger.

Considering the impact of the Amendment, companies are suggested to review and strengthen data protection practices, including a thorough review of the data flows, external and internal privacy policies, procedures, and security measures to identify any gaps or weaknesses in the current data protection management and to ensure compliance with the PDPA.

Author

Grace Shao practices in the areas of intellectual property, technology licensing and dispute resolution. She has advised and made presentations on various intellectual property issues for several organizations — including Judicial Yuan, Intellectual Property Office, ECCT IPL Committee, the American Institute in Taiwan and Technology Law Symposium. Ms. Shao also authored IP-related articles for Economic Daily News.

Author

Sean is experienced in advising clients on matters related to intellectual property, data privacy, technology transactions, digital commerce advertising and marketing, consumer protection, anti-competition and dispute resolution. He is a Certified Information Privacy Professional/Europe (CIPP/E) and a Member of Chartered Institute of Arbitrators (MCIArb). He is also an arbitrator of the Chinese Arbitration Association. He worked in Baker McKenzie Chicago office from 2019 to 2020.

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