Collections of personal information are assets that can be used to generate economic benefit. However, if not used in accordance with applicable privacy laws, these assets can become liabilities. Businesses operating in Israel that use third party personal information as an asset, or that collect or process third party personal information in the course of business, should note recent amendments to Israel's privacy laws and ensure that their policies and business activities comply with applicable privacy legislation.

The Knesset – Israel's Parliament – recently enacted Amendment Number 9 to Israel's Protection of Privacy Law 1981 (the Privacy Law), introducing the following significant changes:

1. Statutory damages for privacy violations. The Privacy Law creates a private right of action for privacy violations. Historically, litigants were required to demonstrate damage in order to receive financial compensation for most privacy violations, a requirement that frustrated many claims. The amendment to the Privacy Law eases the burden on potential litigants by authorizing the adjudicating court to impose up to NIS50,000 ($12,500) in statutory damages for privacy violations without proof of injury. Where the violation is wilful, the compensation awarded may be double this amount. By easing litigants' procedural and evidentiary burdens, the amendment is likely to lead to an increase in private privacy actions.
2. The need for "informed consent". Under certain circumstances, the consent of data subjects is required for disclosure, use or transfer of personal information. Prior to the amendment, the Privacy Law stipulated that this consent may be express or implied. The amendment imposes the more stringent requirement that consent, whether express or implied, be "informed consent". While Israeli courts have not yet defined what constitutes informed consent for purposes of the Privacy Law, in other contexts courts have interpreted "informed consent" as consent granted after provision to the individual of information, understandable to a reasonable person, that is reasonably necessary for the purposes of providing consent. Companies doing business in Israel should ensure that their standard employment and customer agreements and other relevant policies comply with the new consent requirement.
3. Actions for unauthorized use of e-mail content. The Privacy Law stipulates that unauthorized disclosure or use of the content of letters or other writings not intended for publication constitutes an actionable privacy violation. The amendment expressly extends this protection to the content of "electronic messages" as defined in the Digital Signatures Law 2001. This would include certain internet communications as well as cellular communications such as text messages.

Entities doing business in Israel are advised to ensure that their standard agreements and policies comply with current privacy laws, particularly in light of the recent amendments.

Yoheved Novogroder 

Yigal Arnon & Co
22 Rivlin Street
Jerusalem 91000
Israel
Tel: +972 2 623 9200
Fax: +972 2 623 9236
barry@arnon.co.il
www.arnon.co.il