The fine proceedings against the real estate company Deutsche Wohnen were discontinued this week due to a “procedural impediment”. The company thus initially escapes a 14.5 million fine for violations of the GDPR.
Berlin criminal court: serious deficiencies
In a decision dated February 18 of this year, the 26th Grand Criminal Chamber of the Berlin Regional Court discontinued the fine proceedings against Deutsche Wohnen. The reason given in the decision was “serious deficiencies” which constitute an obstacle to proceedings. The fine notice against Deutsche Wohnen was issued by Berlin’s data protection commissioner Maja Smoltczyk in November 2019. The Berlin supervisory authority’s accusation concerned the company’s archiving system for tenant data, saying it did not comply with data protection regulations. In total, Deutscher Wohnen has around 165,700 residential units in its portfolio, making it one of the largest landlords in Berlin. In the archive file in question, the company stored personal data such as tax, health insurance and social security data, pay slips, bank statements and self-disclosure forms without a thorough review. For the storage of such data, which already belongs to special personal data, a justification basis is always needed and the principles of data minimization must be observed. According to the supervisory authorities, it was precisely these points that were lacking.
Objection is successful before the regional court
After the fine notice of 14.5 million euros was issued, Deutsche Wohnen lodged an appeal. This appeal has now been successful. The decision of the Criminal Division was based on the fact that a legal entity cannot be a party to fine proceedings. This view is contrary to that of the supervisory authorities. According to the Berlin court, only natural persons are capable of committing administrative offenses. The supervisory authority had accused the violation of the GDPR directly to the company and not assigned one of the employees or the management. Deutscher Wohnen is a stock corporation and thus a legal entity under private law; unlike a natural person, a legal entity itself is not capable of acting. Thus, a legal person can never be imputed to act, but only a representative or a member of a corporate body of the company. Since the notice does not contain any information on the specific acts of an organ of the company, the notice is invalid.
Contradictory decision
An appeal against the decision of the Berlin Regional Court can now be lodged within one week. The right to do so lies with the Berlin public prosecutor’s office. To make use of this option, the Berlin data protection commissioner will send a request to the public prosecutor’s office. Since the court’s decision is based on the assumption that a fine can only be imposed on companies if management personnel are at fault. This means that the decision of the Berlin Regional Court is at odds with the Bonn Regional Court and the supervisory authorities, which “interpret the rules of the German Administrative Offenses Act in conformity with European law.” The best example is the fine against 1 & 1, the fine was reduced by the Bonn Regional Court here after the appeal of the company, but not completely canceled. The reduction was due to the disproportionality of the fine imposed. In the end, no longer 9.55 million euros, but 900,000 euros by 1 & 1 to pay. The ruling issued was accepted as such by both sides. The highest fine imposed to date was levied against H&M. H&M is to pay 35.5 million euros, which the company also accepted. However, the decision has not yet been made public.
How things will proceed with Deutsche Wohnen after a possible appeal remains to be seen due to the contradictory nature of the decision.
