[Q86-Q105] Updated Jan-2026 Exam Engine or PDF for the IAPP CIPP-E test to help you quickly prepare for the IAPP exam!

QUESTION 86
Which of the following entities would most likely be exempt from complying with the GDPR?

QUESTION 87
SCENARIO
Please use the following to answer the next question:
Jane Stan’s her new role as a Data Protection Officer (DPO) at a Malta-based company that allows anyone to buy and sell cryptocurrencies via its online platform. The company stores and processes the personal data of its customers in a dedicated data center located m Malta |EU).
People wishing to trade cryptocurrencies are required to open an online account on the platform. They then must successfully pass a KYC due diligence procedure aimed at preventing money laundering and ensuring compliance with applicable financial regulations.
The non-European customers are also required to waive all their GDPR rights by reading a disclaimer written in bold and belong a checkbox on a separate page in order to get their account approved on the platform.
The customers must likewise accept the terms of service of the platform. The terms of service also include a privacy policy section, saying, among other things, that if a What is potentially wrong with the backup system operated in the AWS cloud?

QUESTION 88
SCENARIO
Please use the following to answer the next question:
Gentle Hedgehog Inc. is a privately owned website design agency incorporated in Italy. The company has numerous remote workers in different EU countries. Recently, the management of Gentle Hedgehog noticed a decrease in productivity of their sales team, especially among remote workers. As a result, the company plans to implement a robust but privacy-friendly remote surveillance system to prevent absenteeism, reward top performers, and ensure the best quality of customer service when sales people are interacting with customers.
Gentle Hedgehog eventually hires Sauron Eye Inc., a Chinese vendor of employee surveillance software whose European headquarters is in Germany. Sauron Eye’s software provides powerful remote-monitoring capabilities, including 24/7 access to computer cameras and microphones, screen captures, emails, website history, and keystrokes. Any device can be remotely monitored from a central server that is securely installed at Gentle Hedgehog headquarters. The monitoring is invisible by default; however, a so-called Transparent Mode, which regularly and conspicuously notifies all users about the monitoring and its precise scope, also exists. Additionally, the monitored employees are required to use a built-in verification technology involving facial recognition each time they log in.
All monitoring data, including the facial recognition data, is securely stored in Microsoft Azure cloud servers operated by Sauron Eye, which are physically located in France.
Under what condition could the surveillance system be used on the personal devices of employees?

QUESTION 89
Which area of privacy is a lead supervisory authority’s (LSA) MAIN concern?

QUESTION 90
According to the E-Commerce Directive 2000/31/EC, where is the place of “establishment” for a company providing services via an Internet website confirmed by the GDPR?

QUESTION 91
SCENARIO
Please use the following to answer the next question:
Joe started the Gummy Bear Company in 2000 from his home in Vermont, USA. Today, it is a multi-billion-dollar candy company operating in every continent. All of the company’s IT servers are located in Vermont. This year Joe hires his son Ben to join the company and head up Project Big, which is a major marketing strategy to triple gross revenue in just 5 years. Ben graduated with a PhD in computer software from a top university. Ben decided to join his father’s company, but is also secretly working on launching a new global online dating website company called Ben Knows Best.
Ben is aware that the Gummy Bear Company has millions of customers and believes that many of them might also be interested in finding their perfect match. For Project Big, Ben redesigns the company’s online web portal and requires customers in the European Union and elsewhere to provide additional personal information in order to remain a customer. Project Ben begins collecting data about customers’ philosophical beliefs, political opinions and marital status.
If a customer identifies as single, Ben then copies all of that customer’s personal data onto a separate database for Ben Knows Best. Ben believes that he is not doing anything wrong, because he explicitly asks each customer to give their consent by requiring them to check a box before accepting their information. As Project Big is an important project, the company also hires a first year college student named Sam, who is studying computer science to help Ben out.
Ben calls out and Sam comes across the Ben Knows Best database. Sam is planning on going to Ireland over Spring Beak with 10 of his friends, so he copies all of the customer information of people that reside in Ireland so that he and his friends can contact people when they are in Ireland.
Joe also hires his best friend’s daughter, Alice, who just graduated from law school in the U.S., to be the company’s new General Counsel. Alice has heard about the GDPR, so she does some research on it. Alice approaches Joe and informs him that she has drafted up Binding Corporate Rules for everyone in the company to follow, as it is important for the company to have in place a legal mechanism to transfer data internally from the company’s operations in the European Union to the U.S.
Joe believes that Alice is doing a great job, and informs her that she will also be in-charge of handling a major lawsuit that has been brought against the company in federal court in the U.S. To prepare for the lawsuit, Alice instructs the company’s IT department to make copies of the computer hard drives from the entire global sales team, including the European Union, and send everything to her so that she can review everyone’s information. Alice believes that Joe will be happy that she did the first level review, as it will save the company a lot of money that would otherwise be paid to its outside law firm.
Ben’s collection of additional data from customers created several potential issues for the company, which would most likely require what?

QUESTION 92
SCENARIO
Please use the following to answer the next question:
Due to rapidly expanding workforce, Company A has decided to outsource its payroll function to Company B. Company B is an established payroll service provider with a sizable client base and a solid reputation in the industry.
Company B’s payroll solution for Company A relies on the collection of time and attendance data obtained via a biometric entry system installed in each of Company A’s factories. Company B won’t hold any biometric data itself, but the related data will be uploaded to Company B’s UK servers and used to provide the payroll service. Company B’s live systems will contain the following information for each of Company A’s employees:
Name
Address
Date of Birth
Payroll number
National Insurance number
Sick pay entitlement
Maternity/paternity pay entitlement
Holiday entitlement
Pension and benefits contributions
Trade union contributions
Jenny is the compliance officer at Company A.
She first considers whether Company A needs to carry out a data protection impact assessment in relation to the new time and attendance system, but isn’t sure whether or not this is required.
Jenny does know, however, that under the GDPR there must be a formal written agreement requiring Company B to use the time and attendance data only for the purpose of providing the payroll service, and to apply appropriate technical and organizational security measures for safeguarding the data. Jenny suggests that Company B obtain advice from its data protection officer. The company doesn’t have a DPO but agrees, in the interest of finalizing the contract, to sign up for the provisions in full. Company A enters into the contract.
Weeks later, while still under contract with Company A, Company B embarks upon a separate project meant to enhance the functionality of its payroll service, and engages Company C to help. Company C agrees to extract all personal data from Company B’s live systems in order to create a new database for Company B.
This database will be stored in a test environment hosted on Company C’s U.S. server. The two companies agree not to include any data processing provisions in their services agreement, as data is only being used for IT testing purposes.
Unfortunately, Company C’s U.S. server is only protected by an outdated IT security system, and suffers a cyber security incident soon after Company C begins work on the project. As a result, data relating to Company A’s employees is visible to anyone visiting Company C’s website. Company A is unaware of this until Jenny receives a letter from the supervisory authority in connection with the investigation that ensues. As soon as Jenny is made aware of the breach, she notifies all affected employees.
The GDPR requires sufficient guarantees of a company’s ability to implement adequate technical and organizational measures. What would be the most realistic way that Company B could have fulfilled this requirement?

QUESTION 93
SCENARIO
Please use the following to answer the next question:
Zandelay Fashion (‘Zandelay’) is a successful international online clothing retailer that employs approximately 650 people at its headquarters based in Dublin, Ireland. Martin is their recently appointed data protection officer, who oversees the company’s compliance with the General Data Protection Regulation (GDPR) and other privacy legislation.
The company offers both male and female clothing lines across all age demographics, including children. In doing so, the company processes large amounts of information about such customers, including preferences and sensitive financial information such as credit card and bank account numbers.
In an aggressive bid to build revenue growth, Jerry, the CEO, tells Martin that the company is launching a new mobile app and loyalty scheme that puts significant emphasis on profiling the company’s customers by analyzing their purchases. Martin tells the CEO that: (a) the potential risks of such activities means that Zandelay needs to carry out a data protection impact assessment to assess this new venture and its privacy implications; and (b) where the results of this assessment indicate a high risk in the absence of appropriate protection measures. Zandelay may have to undertake a prior consultation with the Irish Data Protection Commissioner before implementing the app and loyalty scheme.
Jerry tells Martin that he is not happy about the prospect of having to directly engage with a supervisory authority and having to disclose details of Zandelay’s business plan and associated processing activities.
What must Zandelay provide to the supervisory authority during the prior consultation?

QUESTION 94
SCENARIO
Please use the following to answer the next question:
Sandy recently joined Market4U, an advertising technology company founded in 2016, as their VP of Privacy and Data Governance. Through her first initiative in conducting a data inventory, Sandy learned that Market4U maintains a list of 19 million global contacts that were collected throughout the course of Market4U’s existence. Knowing the risk of having such a large amount of data, Sandy wanted to purge all contacts that were entered into Market4U’s systems prior to May 2018, unless such contacts had a more recent interaction with Market4U content. However, Dan, the VP of Sales, informed Sandy that all of the contacts provide useful information regarding successful marketing campaigns and trends in industry verticals for Market4U’s clients.
Dan also informed Sandy that he had wanted to focus on gaining more customers within the sports and entertainment industry. To assist with this behavior, Market4U’s marketing team decided to add several new fields to Market4U’s website forms, including forms for downloading white papers, creating accounts to participate in Market4U’s forum, and attending events. Such fields include birth date and salary.
What is the best way that Sandy can gain the insights that Dan seeks while still minimizing risks for Market4U?

QUESTION 95
What must be included in a written agreement between the controller and processor in relation to processing conducted on the controller’s behalf?

QUESTION 96
How is the retention of communications traffic data for law enforcement purposes addressed by European data protection law?

QUESTION 97
The GDPR’s list of processor obligations regarding cloud computing includes all of the following EXCEPT?

QUESTION 98
SCENARIO
Please use the following to answer the next question:
T-Craze, a German-headquartered specialty t-shirt company, was successfully selling to large German metropolitan cities. However, after a recent merger with another German-based company that was selling to a broader European market, T-Craze revamped its marketing efforts to sell to a wider audience. These efforts included a complete redesign of its logo to reflect the recent merger, and improvements to its website meant to capture more information about visitors through the use of cookies.
T-Craze also opened various office locations throughout Europe to help expand its business. While Germany continued to host T-Craze’s headquarters and main product-design office, its French affiliate became responsible for all marketing and sales activities. The French affiliate recently procured the services of Right Target, a renowned marketing firm based in the Philippines, to run its latest marketing campaign. After thorough research, Right Target determined that T-Craze is most successful with customers between the ages of 18 and 22. Thus, its first campaign targeted university students in several European capitals, which yielded nearly 40% new customers for T-Craze in one quarter. Right Target also ran subsequent campaigns for T- Craze, though with much less success.
The last two campaigns included a wider demographic group and resulted in countless unsubscribe requests, including a large number in Spain. In fact, the Spanish data protection authority received a complaint from Sofia, a mid-career investment banker. Sofia was upset after receiving a marketing communication even after unsubscribing from such communications from the Right Target on behalf of T-Craze.
Why does the Spanish supervisory authority notify the French supervisory authority when it opens an investigation into T-Craze based on Sofia’s complaint?

QUESTION 99
What term BEST describes the European model for data protection?

QUESTION 100
SCENARIO
Please use the following to answer the next question:
TripBliss Inc. is a travel service company which has lost substantial revenue over the last few years. Their new manager, Oliver, suspects that this is partly due to the company’s outdated website. After doing some research, he meets with a sales representative from the up-and-coming IT company Techiva, hoping that they can design a new, cutting-edge website for TripBliss Inc.’s foundering business.
During negotiations, a Techiva representative describes a plan for gathering more customer information through detailed Questionaires, which could be used to tailor their preferences to specific travel destinations. TripBliss Inc. can choose any number of data categories – age, income, ethnicity – that would help them best accomplish their goals. Oliver loves this idea, but would also like to have some way of gauging how successful this approach is, especially since the Questionaires will require customers to provide explicit consent to having their data collected. The Techiva representative suggests that they also run a program to analyze the new website’s traffic, in order to get a better understanding of how customers are using it. He explains his plan to place a number of cookies on customer devices. The cookies will allow the company to collect IP addresses and other information, such as the sites from which the customers came, how much time they spend on the TripBliss Inc. website, and which pages on the site they visit. All of this information will be compiled in log files, which Techiva will analyze by means of a special program. TripBliss Inc. would receive aggregate statistics to help them evaluate the website’s effectiveness. Oliver enthusiastically engages Techiva for these services.
Techiva assigns the analytics portion of the project to longtime account manager Leon Santos. As is standard practice, Leon is given administrator rights to TripBliss Inc.’s website, and can authorize access to the log files gathered from it. Unfortunately for TripBliss Inc., however, Leon is taking on this new project at a time when his dissatisfaction with Techiva is at a high point. In order to take revenge for what he feels has been unfair treatment at the hands of the company, Leon asks his friend Fred, a hobby hacker, for help. Together they come up with the following plan: Fred will hack into Techiva’s system and copy their log files onto a USB stick. Despite his initial intention to send the USB to the press and to the data protection authority in order to denounce Techiva, Leon experiences a crisis of conscience and ends up reconsidering his plan. He decides instead to securely wipe all the data from the USB stick and inform his manager that the company’s system of access control must be reconsidered.
With regard to TripBliss Inc.’s use of website cookies, which of the following statements is correct?

QUESTION 101
SCENARIO
Please use the following to answer the next question:
TripBliss Inc. is a travel service company which has lost substantial revenue over the last few years. Their new manager, Oliver, suspects that this is partly due to the company’s outdated website. After doing some research, he meets with a sales representative from the up-and-coming IT company Techiva, hoping that they can design a new, cutting-edge website for TripBliss Inc.’s foundering business.
During negotiations, a Techiva representative describes a plan for gathering more customer information through detailed Questionaires, which could be used to tailor their preferences to specific travel destinations. TripBliss Inc. can choose any number of data categories – age, income, ethnicity – that would help them best accomplish their goals. Oliver loves this idea, but would also like to have some way of gauging how successful this approach is, especially since the Questionaires will require customers to provide explicit consent to having their data collected. The Techiva representative suggests that they also run a program to analyze the new website’s traffic, in order to get a better understanding of how customers are using it. He explains his plan to place a number of cookies on customer devices. The cookies will allow the company to collect IP addresses and other information, such as the sites from which the customers came, how much time they spend on the TripBliss Inc. website, and which pages on the site they visit. All of this information will be compiled in log files, which Techiva will analyze by means of a special program. TripBliss Inc. would receive aggregate statistics to help them evaluate the website’s effectiveness. Oliver enthusiastically engages Techiva for these services.
Techiva assigns the analytics portion of the project to longtime account manager Leon Santos. As is standard practice, Leon is given administrator rights to TripBliss Inc.’s website, and can authorize access to the log files gathered from it. Unfortunately for TripBliss Inc., however, Leon is taking on this new project at a time when his dissatisfaction with Techiva is at a high point. In order to take revenge for what he feels has been unfair treatment at the hands of the company, Leon asks his friend Fred, a hobby hacker, for help. Together they come up with the following plan: Fred will hack into Techiva’s system and copy their log files onto a USB stick. Despite his initial intention to send the USB to the press and to the data protection authority in order to denounce Techiva, Leon experiences a crisis of conscience and ends up reconsidering his plan. He decides instead to securely wipe all the data from the USB stick and inform his manager that the company’s system of access control must be reconsidered.
If TripBliss Inc. decides not to report the incident to the supervisory authority, what would be their BEST defense?

QUESTION 102
Pursuant to Article 17 and EDPB Guidelines S’2019 on RTBF criteria in search engines cases, all of the following would be valid grounds for data subject delisting requests EXCEPT?

QUESTION 103
The transparency principle is most directly related to which of the following rights?

QUESTION 104
Which GDPR principle would a Spanish employer most likely depend upon to annually send the personal data of its employees to the national tax authority?

QUESTION 105
Which institution has the power to adopt findings that confirm the adequacy of the data protection level in a non-EU country?