Discover the key privacy risks under GDPR when implementing employee surveillance software, based on a case study of Gentle Hedgehog Inc. and their monitoring system from Sauron Eye Inc.
Table of Contents
Question
Gentle Hedgehog Inc. is a privately owned website design agency incorporated in Italy. The company has numerous remote workers in different EU countries. Recently, the management of Gentle Hedgehog noticed a decrease in productivity of their sales team, especially among remote workers. As a result, the company plans to implement a robust but privacy-friendly remote surveillance system to prevent absenteeism, reward top performers, and ensure the best quality of customer service when sales people are interacting with customers.
Gentle Hedgehog eventually hires Sauron Eye Inc., a Chinese vendor of employee surveillance software whose European headquarters is in Germany. Sauron Eye s software provides powerful remote-monitoring capabilities, including 24/7 access to computer cameras and microphones, screen captures, emails, website history, and keystrokes. Any device can be remotely monitored from a central server that is securely installed at Gentle Hedgehog headquarters. The monitoring is invisible by default; however, a so-called Transparent Mode, which regularly and conspicuously notifies all users about the monitoring and its precise scope, also exists. Additionally, the monitored employees are required to use a built-in verification technology involving facial recognition each time they log in.
All monitoring data, including the facial recognition data, is securely stored in Microsoft Azure cloud servers operated by Sauron Eye, which are physically located in France.
Based on the scenario, what are the primary privacy risks of the planned surveillance system?
A. A Chinese vendor and the monitoring of EU-based employees.
B. Facial recognition data stored in the cloud and lack of encryption.
C. Excessive scope of monitoring and lack of legitimate purpose for data collection.
D. Missing E2EE encryption in the monitoring system and unclear data storage duration.
Answer
The primary privacy risks of the planned employee surveillance system by Gentle Hedgehog are:
C. Excessive scope of monitoring and lack of legitimate purpose for data collection.
Explanation
Under the GDPR, any processing of personal data must adhere to the principles of data minimization (collecting only what is necessary), purpose limitation (only using data for specified, explicit and legitimate purposes), and proportionality (processing must be necessary and proportionate to the intended purpose).
In this case, the scope of monitoring appears excessive and disproportionate to the stated goals of preventing absenteeism, rewarding top performers, and ensuring quality customer service. Features like 24/7 access to cameras, microphones, screen captures, emails, web history and keystrokes go far beyond what is necessary and proportionate for performance monitoring and quality assurance. This extensive surveillance is unlikely to be considered a legitimate business purpose that overrides employees’ privacy rights.
Additionally, the invisible monitoring by default likely violates the GDPR’s transparency obligations. While a “Transparent Mode” exists, employees should be clearly informed from the outset about the existence of monitoring, its scope and purposes. Specific, freely given consent from employees would likely be required for such invasive surveillance.
The location of the vendor and servers (China, Germany, France) is less relevant from a GDPR perspective, as long as appropriate safeguards and contracts are in place. Facial recognition and lack of end-to-end encryption also carry risks, but the core issue is the excessive, disproportionate monitoring without a legitimate purpose that respects data minimization. Gentle Hedgehog would need to substantially scale back this surveillance system to comply with GDPR principles.
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