What is Pseudonymization?

Pseudonymization is a data management procedure. It is promoted in the General Data Protection Regulation (GDPR) of the European Union. The GDPR comes with a number of new regulations. When data is pseudonymized, the personal information of an individual will be replaced with identifiers or pseudonyms. The fictional data that is replaced:

  • Is not able to be attributed to a specific person without further data. The GDPR states the additional information will be stored separately and subject to the organization and technical measures;
  • Must maintain statistical accuracy and referential integrity to enable business processes, testing, training, and analysis to operate properly.

Why is Pseudonymization Needed?

Pseudonymization is used when realistic information is necessary for the development and application of testing data warehousing, training programs, testing environments, analytical data scores, and other business methods.

The GDPR encourages pseudonymization for a number of reasons. According to Article 6(4) of the new regulation, processing personal information for a purpose that was different than originally intended is permitted under certain circumstances. This article also states that other functions may include profiling, outsourcing, data processing, and business analysis.

Article 11(2) states that the data controller is exempt from complying with a person's rights to access, rectification, data portability, and erasure of the individual's personal data.

In Article 25 of the regulation, pseudonymization is a key factor for the requirement of data protection by default and design. In addition, Article 34 requires that the data controller notify any individuals who were impacted by a security breach. Because pseudonymization information is not linked to an identified person, data controllers are not required to notify an individual unless he or she is identifiable because:

  • The person can be identified by linking pseudonymized and non-pseudonymized information;
  • The pseudonymized encryption was disclosed during the security breach.

Article 40(2) of the regulation promotes the use of Codes of Conduct, which include pseudonymization. Article 78 of the regulation states that pseudonymization of personal information should be carried out as soon as possible, which helps demonstrate GDPR compliance. Furthermore, Article 89 allows processing personal information for historical, statistical, and scientific purposes.

Pseudonymization Methods

There are a number of methods and techniques that are used to pseudonymize data. The method that is used primarily depends on the privacy impact assessment.

  • Scrambling - Scrambling methods require mixing of letters. There are times when this method of pseudonymization is reversible.
  • Encryption - Encryption renders original data unintelligible. This process isn't able to be reversed without access to the right decryption key. According to the GDPR, additional information, which includes decryption keys, are to be kept in a separate area from data that has been pseudonymized.
  • Data Masking - Data masking is a technique that enables important data to be hidden among other data or random characters. One benefit of masking is being able to recognize data without manipulating individuals actual identities.
  • Data Blurring - Data blurring uses estimated data values to make their meaning obsolete, which makes it impossible to identify individuals.
  • Tokenization - This technique uses a non-mathematical approach to protect personal data. By using this method, any sensitive data will be replaced with non-sensitive information, which is known as tokens. This method doesn't change the type or length of data. Instead, it processes data by legacy systems, which include databases that could be sensitive to data type and length. Tokenization can keep specific information fully or partially visible for analytics and processing, but all personal information is kept hidden.

Pseudonymization is recommended by the GDPR because it reduces the risk of identification and possible concerns about the data processing operation. It also protects the data subject. However, it is important to keep in mind that pseudonymization is a method that should not be used to separate identifiers to circumvent other responsibilities. Data that is pseudonymized falls under the scope of the GDPR. The practice is meant to reduce risk to data subjects without bypassing other regulations. The technique should be considered while keeping in mind how the sensitivity of the data is processed with regard to its impact on data subjects during information processing.

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