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Happy Data Privacy Day!


10 min read

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Happy Data Privacy Day!

Happy Data Privacy Day 2022! Of course, every day is privacy day at Cloudflare, but today gives us a great excuse to talk about one of our favorite topics.

In honor of Privacy Day, we’re highlighting some key topics in data privacy and data protection that helped shape the landscape in 2021, as well as the issues we’ll be thinking about in 2022. The first category that gets our attention is the intersection of data security and data privacy. At Cloudflare, we’ve invested in privacy-focused technologies and security measures that enhance data privacy to help build the third phase of the Internet, the Privacy phase, and we expect to double down on these developments in 2022.

The second category is data localization. While we don’t think you need localization to achieve privacy, the two are inextricably linked in the EU regulatory landscape and elsewhere.

Third, recent regulatory enforcement actions in the EU against websites’ use of cookies have us thinking about how we can help websites run third-party tools, such as analytics, in a faster, more secure, and more privacy-protective way.

Lastly, we’ll continue to focus on the introduction of new or updated data protection regulations around the world, as well as regulation governing digital services, which will inevitably have implications for how personal and non-personal data is used and transferred globally.

Security to ensure Privacy

Cloudflare’s founding mission to help build a better Internet has always included focusing on privacy-first products and services. We’ve written before about how we think a key way to improve privacy is to reduce the amount of personal data flowing across the Internet. This has led to the development and deployment of technologies to help personal data stay private and keep data secure from would-be attackers. Examples of prominent technologies include Cloudflare’s public DNS resolver — the Internet's fastest, privacy-first public DNS resolver that does not retain any personal data about requests made — and Oblivious DNS over HTTPs (ODoH) — a proposed DNS standard co-authored by engineers from Cloudflare, Apple, and Fastly that separates IP addresses from queries, so that no single entity can see both at the same time.

We’re looking forward to continued work on privacy enhancing technologies in 2022, including efforts to generalize ODoH technology to any application HTTP traffic through Oblivious HTTP (OHTTP). Cloudflare is proud to be an active contributor to the Internet Engineering Task Force’s OHAI (Oblivious HTTP Application Intermediation) working group where Oblivious HTTP will be developed. Similar to ODoH, OHTTP allows a client to make multiple requests of a server without the server being able to link those requests to the client or to identify the requests as having come from the same client.

But there are times when retaining identity is important, such as when you are trying to access your employer’s network while working from home — something many of us have become all too familiar with over the past two years. However, organizations shouldn’t have to choose between protecting privacy and implementing Zero Trust solutions to guard their networks from common remote work pitfalls: employees working from home who fail to access their work networks through secure methods or fall victim to phishing and malware attacks.

So not only have we developed Cloudflare’s Zero Trust Services to help organizations secure their networks, we also went beyond mere security to create privacy-enhancing Zero Trust products. In 2021, the Cloudflare Zero Trust team took a big privacy step forward by building and launching Selective Logging into Cloudflare Gateway. Cloudflare Gateway is one component of our suite of services that helps enterprises secure their networks. Other components include Zero Trust access for an enterprise’s applications that allows for the authentication of users on our global network and a fast and reliable solution for remote browsing that allows enterprises to execute all browser code in the cloud.

With Selective Logging, Gateway Admins can now tailor their logs or disable all Gateway logging to fit an enterprise’s privacy posture. Admins can “Enable Logging of only Block Actions,” “Disable Gateway Logging for Personal Information,” or simply “Disable All Gateway Logging.” This allows an enterprise to decide not to collect any personal data for users who are accessing their internal organizational networks. The less personal data collected, the less chance any personal data can be stolen, leaked, or misused. Meanwhile, Gateway still protects enterprises by blocking malware or command & control sites, phishing sites, and other URLs that are disallowed by their enterprise’s security policy.

As many employers have moved to permanent remote work, at least part-time, Zero Trust solutions will continue to be important in 2022. We are excited to give those employers tools that help them secure their networks in ways that allow them to simultaneously protect employee privacy.

Of course, we can’t talk about pro-privacy security issues without mentioning the Log4j vulnerability exposed last month. That vulnerability highlighted just how critically important security is to protecting the privacy of personal data. We explained in depth how this vulnerability works, but in summary, the vulnerability allowed an attacker to execute code on a remote server. This can allow for the exploitation of Java-based Internet facing software that uses Log4j, but what makes Log4j even more insidious is that non-Internet facing software can also be exploitable as data gets passed from system to system. For example, a User-Agent string containing the exploit could be passed to a backend system written in Java that does indexing or data science and the exploit could get logged. Even if the Internet-facing software is not written in Java it is possible that strings get passed to other systems that are in Java allowing the exploit to happen.

This means that unless the vulnerability is remediated, an attacker could execute code that not only exfiltrates data from a web server but also steal personal data from non-Internet facing backend databases, such as billing systems. And because Java and Log4j are so widely used, thousands of servers and systems were impacted, which meant millions of users’ personal data was at risk.

We’re proud that, within hours of learning of the Log4j vulnerability, we rolled out new WAF rules written to protect all our customers’ sites (and our own) against this vulnerability. In addition, we and our customers were able to use our Zero Trust product, Cloudflare Access, to protect access to internal systems. Once we or a customer enabled Cloudflare Access on the identified attack surface, any exploit attempts to Cloudflare’s systems or the systems of customers would have required the attacker to authenticate. The ability to analyze server, network or traffic data generated by Cloudflare in the course of providing our service to the huge number of Internet applications that use us helped us better protect all of Cloudflare's customers. Not only were we able to update WAF rules to mitigate the vulnerability, Cloudflare could use data to identify WAF evasion patterns and exfiltration attempts. This information enabled our customers to rapidly identify attack vectors on their own networks and mitigate the risk of harm.

As we discuss more below, we expect data localization debates to continue in 2022. At the same time, it’s important to realize that, if companies are forced to segment data by jurisdiction or to prevent access to data across jurisdictional borders, it would have been harder to mount the kind of response we were able to quickly provide to help our customers protect their own sites and networks against Log4j. We believe in ensuring both the privacy and security of data no matter what jurisdiction that data is stored in or flows through. And we believe those who would insist on data localization as a proxy for data protection above all else do a disservice to the security measures that are as important as regulations, if not more so, to protecting the privacy of personal data.

Data Localization

Data localization was a major focus in 2021 and that shows no sign of slowing in 2022. In fact, in the EU, the Austrian data protection authority (the Datenschutzbehörde) set quite the tone for this year. It published a decision January 13 stating that a European company could not use Google Analytics because it meant EU personal data was being transferred to the United States in what the regulator viewed as a violation of the EU General Data Protection Regulation (GDPR) as interpreted by the Court of Justice of the European Union’s 2020 decision in the “Schrems II” case.

We continue to disagree with the premise that the Schrems II decision means that EU personal data must not be transferred to the United States. Instead, we believe that there are safeguards that can be put in place to allow for such transfers pursuant to the EU Standard Contractual Clauses (SCCs) (contractual clauses approved by the EU Commission to enable EU personal data to be transferred outside the EU) in a manner consistent with the Schrems II decision. Cloudflare has had data protection safeguards in place since well before the Schrems II case, in fact, such as our industry-leading commitments on government data requests. We have updated our Data Processing Addendum (DPA) to incorporate the SCCs that the EU Commission approved in 2021. We also added additional safeguards as outlined in the EDPB’s June 2021 Recommendations on Supplementary Measures. Finally, Cloudflare’s services are certified under the ISO 27701 standard, which maps to the GDPR’s requirements.

In light of these measures, our EU customers can use Cloudflare’s services in a manner consistent with GDPR and the Schrems II decision. Still, we recognize that many of our customers want their EU personal data to stay in the EU. For example, some of our customers in industries like healthcare, law, and finance may have additional requirements. For these reasons, we developed our Data Localization Suite, which gives customers control over where their data is inspected and stored.

Cloudflare’s Data Localization Suite provides a viable solution for our customers who want to avoid transferring EU personal data outside the EU at a time when European regulators are growing increasingly critical of data transfers to the United States. We are particularly excited about the Customer Metadata Boundary component of the Data Localization Suite, because we have found a way to keep customer-identifiable end user log data in the EU for those EU customers who want that option, without sacrificing our ability to provide the security services our customers rely on us to provide.

In 2022, we will continue to fine tune our data localization offerings and expand to serve other regions where customers are finding a need to localize their data. 2021 saw China’s Personal Information Protection Law come into force with its data localization and cross-border data transfer requirements, and we are likely to see other jurisdictions, or perhaps specific industry guidelines, follow suit in 2022 in some form.

Pro-Privacy Analytics

We expect trackers (cookies, web beacons, etc.) to continue to be an area of focus in 2022 as well, and we are excited to play a role in ushering in a new era to help websites run third-party tools, such as analytics, in a faster, more secure, and more privacy-protective way. We were already thinking about privacy-first analytics in 2020 when we launched Web Analytics — a product that allowed websites to gather analytics information about their site users without using any client-side code.

Nevertheless, cookies, web beacons, and similar client-side trackers remain ubiquitous across the web. Each time a website operator uses these trackers, they open their site to potential security vulnerabilities, and they risk eroding the trust of their users who have grown weary of “cookie consent” banners and worry their personal data is being collected and tracked across the Internet. There has to be a better way, right? Turns out, there is.

As explained in greater detail in this blog post, Cloudflare’s Zaraz product not only allows a website to load faster and be more interactive, but it also reduces the amount of third-party code needed to run on a website, which makes it more secure. And this solution is also pro-privacy: it allows the website operator to have control over the data sent to third parties. Moving the execution of the third-party tools our network means website operators will be able to identify if tools are trying to collect personal data, and, if so, they can modify the data before it goes to the analytics providers (for example, strip URL queries, remove IP addresses of end users). As we’ve said so often, if we can reduce the amount of personal data that is sent across the Internet, that’s a win for privacy.

Changing Privacy Landscape

As the old saying goes, the only constant is change. And as in 2021, 2022 will undoubtedly be a year of continued regulatory changes as we see new laws enacted, amended, or coming into effect that directly or indirectly regulate the collection, use, and transborder flow of personal data.

In the United States for example, 2022 will require companies to prepare for the California Privacy Rights Act (CPRA), which goes into effect January 1, 2023. Importantly, CPRA will have “retrospective requirements”, meaning companies will need to look back and apply rules to personal data collected as of January 1, 2022. Likewise, Virginia’s and Colorado’s privacy laws are coming into force in 2023. And a number of other States, including but not limited to Florida, Washington, Indiana, and the District of Columbia, have proposed their own privacy laws. For the most part, these bills are aimed at giving consumers greater control over their personal data — such as establishing consumers’ rights to access and delete their data — and placing obligations on companies to ensure those rights are protected and respected.

Meanwhile, elsewhere in the world, we are seeing a shift in data privacy legislation. No longer are data protection laws focusing only on personal data; they are expanding to regulate the flow of all types of data. The clearest example of this is in India, where a parliamentary committee in December 2021 included recommendations that the “Personal Data Protection Bill'' be renamed the “Data Protection Bill'' and that its scope be expanded to include non-personal data. The bill would place obligations on organizations to extend to non-personal data the same protections that existing data protection laws extend to personal data. The implications of the proposed updates to India’s Data Protection Bill are significant. They could dramatically impact the way in which organizations use non-personal data for analytics and operational improvements.

India is not the only country to propose expanding the scope of data regulation to include non-personal data. The European Union’s Data Strategy aims to provide a secure framework enhancing data sharing with the stated goal that such sharing will drive innovation and expedite the digitalization of the European economy.

Other data privacy legislation to keep an eye on in 2022 will be Japan’s amendment to its Act on Protection of Personal Information (APPI) and Thailand’s Personal Data Protection Act (PDPA), which will come into force in 2022. Proposed amendments to Japan’s APPI include requirements to be met in order to transfer Japanese personal data outside of Japan and the introduction of data breach notification requirements. Meanwhile, like the GDPR, Thailand’s PDPA aims to protect individuals’ personal data by imposing obligations on organizations that collect, process, and transfer such personal data.

With all these privacy enhancing technologies and regulatory changes on the horizon, we expect 2022 to be another exciting year in the world of data protection and data privacy. Happy Data Privacy Day!

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