Housing cooperatives that breach GDPR face no leniency over fines

Polish housing cooperatives cannot expect special treatment when they breach data-protection rules. A precedent-setting ruling by the Supreme Administrative Court says they should be treated as businesses, not public administration, when regulators calculate GDPR penalties.

That distinction carries a major financial difference. The president of Poland’s Personal Data Protection Office can impose a maximum fine of 100,000 zlotys on a public administration body. For a business, the ceiling under EU rules rises to €20 million or 4% of annual worldwide turnover.

The case concerned a housing cooperative in Olsztyn. In August 2021, the data-protection authority received information that a document had been provided to an unauthorized person. The document contained the name, surname, national identification number and home address of a cooperative member. The recipient said he had received it improperly because he worked professionally in news media.

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In EU law, the concept of an enterprise is functional: what matters is carrying out economic activity, not the legal form, method of financing or declared lack of a profit motive.

The authority asked the cooperative to explain whether it had assessed the incident for risks to individuals’ rights and freedoms. Such an assessment determines whether the authority and the affected people must be notified. The cooperative argued that a resident unhappy with the level of operating fees had launched a negative campaign against it in local media and online, thereby making his own personal data public. It also said it had reported the resident to prosecutors and later held a press conference for journalists to present what it called the true facts.

Piotr Pałka, a law professor and legal adviser, said EU law defines an enterprise by its economic activity, not its legal form, funding model or stated lack of profit motive. Housing cooperatives may pursue statutory housing goals while also building, managing, renting or selling properties, he said. Their social or membership-based character therefore does not remove them from the EU concept of an enterprise.

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A housing cooperative pursues statutory housing goals, but it may also conduct activities including construction, property management, renting or selling units, as well as other economic activity connected with those goals.