On March 7, 2024, the Court of Justice of the European Union (the “CJEU”) handed down its judgment in the IAB Europe case, answering a request for a preliminary ruling under Article 267 TFEU from the Brussels Market Court.[1]  The case revolves around IAB Europe’s Transparency and Consent Framework (“TCF”) and has been closely monitored by the AdTech industry ever since the Belgian DPA investigated and subsequently imposed a 250,000 euro fine on IAB Europe for alleged breaches of GDPR and e-Privacy rules back in 2022.[2]

Factual Background

IAB Europe is a European-level standard setting association for the digital marketing and advertising ecosystem.  Back in 2018, when GDPR entered into force, it designed the TCF as a set of rules and guidelines that addresses challenges posed by GDPR and e-Privacy rules in the context of online advertising auctions (such as real-time bidding).  The goal was to help AdTech companies that do not have any direct interaction with the website user (i.e., any company in the AdTech ecosystem that is not the website publisher, such as ad-networks, ad-exchanges, demand-side platforms) to ensure that the consent that the website publisher obtained (through cookies or similar technologies) is valid under the GDPR (i.e., freely given, specific, informed and unambiguous) and that, therefore, those AdTech companies can rely on that consent to serve ads to those users in compliance with GDPR and e-Privacy rules.

On a technical level, overly simplified, the TCF is used to record consent (or lack thereof) or objections to the reliance on legitimate interests under GDPR among IAB’s members by storing the information on consents and objections in a Transparency and Consent String (the “TC String”).  The TC String is a coded representation (a string of letters and numbers) of a user’s preferences, which is shared with data brokers and advertising platforms participating in the TCF auction protocol who would not otherwise have a way to know whether users have consented or objected to the processing of their personal data.[3]

First Question: Does the TC String constitute Personal Data?

The CJEU now ruled, echoing its earlier decision in Breyer,[4] that the TC String may constitute personal data under the GDPR to the extent those data may, by “reasonable means”, be associated with an identifier such as an IP address, allowing the data subject to be (re-)identified.  The fact that IAB Europe can neither access the data that are processed by its members under its membership rules without an external contribution, nor combine the TC String with other factors itself, did not preclude the TC String from potentially being considered personal data according to the CJEU.[5] 

Second Question: Does IAB Europe act as Data Controller?

Secondly, the Court decided that IAB Europe, as a sectoral organization proposing a framework of rules regarding consent to personal data processing, which contains not only binding technical rules but also rules setting out in detail the arrangements for storing and disseminating personal data, should be deemed a joint controller together with its members if and to the extent it exerts influence over the processing “for its own purposes” and, together with its members, determines the means behind such operations (e.g., through technical standards).  In the IAB Europe case, this concerns in particular the facilitation by IAB of the sale and purchase of advertising space among its members and its enforcement of rules on TC String content and handling.  It also seemed particularly relevant to the Court that IAB Europe could suspend membership in case of breach of the TC String rules and technical requirements by one of its members, which may result in the exclusion of that member from the TCF.

Further, in keeping with earlier CJEU case-law[6], the Court found it irrelevant that IAB Europe does not itself have direct access to the personal data processed by its members.  This does not in and of itself preclude IAB Europe from holding the status of joint controller under GDPR.

However, the Court also reiterated that joint controllership doesn’t automatically extend to subsequent processing by third parties, such as – in this case – website or application providers further processing the TC String following its initial creation, unless the joint controller continues to (jointly) determine the purpose and means of that subsequent processing.  This is in line with the Court’s 2019 Fashion ID judgment.[7]  In addition, the Court opined that the existence of joint controllership “does not necessarily imply equal responsibility” of the various operators engaged in the processing of personal data. The level of responsibility of each individual operator must be assessed in the light of all the relevant circumstances of a particular case, including the extent to which the different operators are involved at different stages of the data processing or to different degrees.  So not all joint controllers are created equal.

Key Takeaways

In our view, the first finding is not groundbreaking.  It largely confirms the Court’s previous case-law establishing that “personal data” must be interpreted broadly under GDPR, meaning the standard for truly “anonymized data” continues to be very high.  It will now be for the Brussels Market Court to determine whether, based on the specific facts of the IAB Europe case, the TC String indeed constitutes personal data.

The second finding may have caught more people off guard.  While it will again be up to the Brussels Market Court to determine whether IAB Europe is actually a joint controller in respect of the personal data alleged to be included in the TC String, the Court’s expansive interpretation of the concept of joint controllership (i.e., where “two or more controllers jointly determine the purposes and means of processing” (Article 26 GDPR)) could have broader ramifications beyond the AdTech industry. 

Organizations who until now have consistently taken the position that they do not qualify as a data controller in respect of data processing activities of their members, users or customers, may need to re-assess that position and, based on the specific factual circumstances relevant to them, consider whether they might in fact be subject to GDPR’s onerous obligations imposed on data controllers.  This may be particularly relevant for standard-setting bodies and industry associations active or established in Europe, potentially hampering their ability to continue developing relevant standards and rules.  Arguably, this could even capture certain providers or deployers of software and other computer systems, including those developing or deploying AI models and systems, in case they would be found to issue “binding technical rules” and “rules setting out in detail the arrangements for storing and disseminating personal data”, and they would actually enforce those rules against third parties using their models and systems to process personal data. 

Even if some solace can be found from a liability perspective in the confirmation by the Court that joint controllership relating to the initial collection of personal data does not automatically extend to the subsequent processing activities carried out by third-parties, and that not all joint controllers are created equal, the compliance burden on “newfound joint controllers” may nevertheless be burdensome because key obligations on lawfulness, transparency, data security and accountability are triggered irrespective of the “degree” of controllership in question.

In our view that would take the concept of “joint controllership” too far beyond its literal meaning and originally intended purpose, but it remains to be seen which other enforcement actions will be taken and which other cases raising similar questions may find their way through the European courts in the coming months and years.

[1]           CJEU, judgment of March 7, 2024, IAB Europe, C-604/22, ECLI:EU:C:2024:214 (https://curia.europa.eu/juris/document/document.jsf?text=&docid=283529&pageIndex=0&doclang=FR&mode=req&dir=&occ=first&part=1&cid=167405).

[2]           For more information on the original case in front of the Belgian DPA, see the DPA’s dedicated landing page: https://www.dataprotectionauthority.be/iab-europe-held-responsible-for-a-mechanism-that-infringes-the-gdpr.

[3]           For more information, see the IAB Europe website: https://iabeurope.eu/.

[4]           CJEU, judgment of 19 October 2016, Breyer, C‑582/14, EU:C:2016:779, paragraphs 41-49 (https://curia.europa.eu/juris/document/document.jsf?text=&docid=184668&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=1303370).

[5]           Recital 26 of GDPR further clarifies that, “to ascertain whether means are reasonably likely to be used to identify the natural person, account should be taken of all objective factors, such as the costs of and the amount of time required for identification, taking into consideration the available technology at the time of the processing and technological developments.”  This will always require a fact-intensive, case-by-case inquiry, but it is now even more clear that “it is not required that all the information enabling the identification of the data subject must be in the hands of one person” (CJEU, IAB Europe judgment, §40).

[6]           CJEU, judgment of July 10, 2018, Jehovan todistajat, C‑25/17, EU:C:2018:551, paragraph 69 (https://curia.europa.eu/juris/document/document.jsf?text=&docid=203822&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=1305431), and CJEU; judgment of June 5, 2018, Wirtschaftsakademie Schleswig-Holstein, C‑210/16, EU:C:2018:388, paragraph 38 (https://curia.europa.eu/juris/document/document.jsf?text=&docid=202543&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=1305548).

[7]           CJEU, judgment of July 29, 2019, Fashion ID, C‑40/17, EU:C:2019:629, paragraph 74 (https://curia.europa.eu/juris/document/document.jsf?text=&docid=216555&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=1305826), as commented on in our earlier blog post here: https://www.clearycyberwatch.com/2019/08/cjeu-judgment-in-the-fashion-id-case-the-role-as-controller-under-eu-data-protection-law-of-the-website-operator-that-features-a-facebook-like-button/; See also the EDPB Guidelines 07/2020 on the concepts of controller and processor in the GDPR (version 2.1, adopted on July 7, 2021), in relation to the concept of “converging decisions”, at paragraphs 54-58 (https://www.edpb.europa.eu/system/files/2023-10/EDPB_guidelines_202007_controllerprocessor_final_en.pdf).