Pseudonymisation

Pseudonymization is a data management and de-identification procedure by which personally identifiable information fields within a data record are replaced by one or more artificial identifiers, or pseudonyms. A single pseudonym for each replaced field or collection of replaced fields makes the data record less identifiable while remaining suitable for data analysis and data processing. Pseudonymization (or pseudonymisation, the spelling under European guidelines) is one way to comply with the European Union's new General Data Protection Regulation (GDPR) demands for secure data storage of personal information. Pseudonymized data can be restored to its original state with the addition of information which allows individuals to be re-identified. In contrast, anonymization is intended to prevent re-identification of individuals within the dataset. The European Data Protection Supervisor (EDPS) on 9 December 2021 highlighted pseudonymization as the top technical supplementary measure for Schrems II compliance. Less than two weeks later, the EU Commission highlighted pseudonymization as an essential element of the equivalency decision for South Korea, which is the status that was lost by the United States under the Schrems II ruling by the Court of Justice of the European Union (CJEU). The importance of GDPR-compliant pseudonymization increased dramatically in June 2021 when the European Data Protection Board (EDPB) and the European Commission highlighted GDPR-compliant Pseudonymisation as the state-of-the-art technical supplementary measure for the ongoing lawful use of EU personal data when using third country (i.e., non-EU) cloud processors or remote service providers under the "Schrems II" ruling by the CJEU. Under the GDPR and final EDPB Schrems II Guidance, the term pseudonymization requires a new protected “state” of data, producing a protected outcome that: (1) Protects direct, indirect, and quasi-identifiers, together with characteristics and behaviors; (2) Protects at the record and data set level versus only the field level so that the protection travels wherever the data goes, including when it is in use; and (3) Protects against unauthorized re-identification via the Mosaic Effect by generating high entropy (uncertainty) levels by dynamically assigning different tokens at different times for various purposes.