The European Union’s General Data Protection Regulation (GDPR) is the most significant data privacy legislation to be passed in more than 20 years. It was adopted on 27 April 2016 and becomes enforceable from the 25 May 2018, after a two-year transition period.
The GDPR replaces the Data Protection Directive of 1995 and for the first time provides a consistent data privacy regulatory framework across the European Union (EU).
The legislation aims to substantially improve data privacy protection and control for individuals by regulating the processing of personal data relating to individuals residing in the EU.
According to the EU’s GDPR information portal (EUGDPR.org), “Personal data is any information relating to an identified or identifiable natural person”. Personal data can include names, identification numbers, postal addresses, email addresses, locations, social media posts, medical information, IP addresses, etc.
All organisations, including those outside of the EU that hold data on EU citizens, need to comply with the GDPR. Organisations that fail to comply can incur substantial penalties. “Organisations in breach of GDPR can be fined up to 4% of annual global turnover of the preceding financial year or €20 Million (whichever is greater).”
Key Legislation Changes
Although a number of the key principles from the Data Protection Directive remain relevant, the GDPR extends key elements to ensure its relevance in today’s digital economy (source: EUGDPR.org).
- Increased Territorial Scope (extra-territorial applicability) – Extended jurisdiction of the GDPR, as it applies to all companies processing personal data of data subjects residing in the EU, regardless of the company’s location.
- Penalties – Under GDPR organisations in breach can be fined up to 4% of annual global turnover or €20 Million (whichever is greater). This is the maximum fine that can be imposed for the most serious infringements, e.g. not having sufficient customer consent to process data or violating the core of Privacy by Design concepts.
- Consent – The conditions for consent have been strengthened. Companies will no longer be able to use long illegible terms and conditions full of legalese, as the request for consent must be given in an intelligible and easily accessible form, with the purpose for data processing attached to that consent.
- Breach Notification – Breach notification will become mandatory where a data breach is likely to “result in a risk for the rights and freedoms of individuals”. This must be done within 72 hours of first having become aware of the breach.
- Right to Access – Right for data subjects to obtain from the data controller (organisation that collects the data) confirmation as to whether or not personal data concerning them is being processed, where and for what purpose. Further, the controller shall provide a copy of the personal data, free of charge, in an electronic format.
- Right to be Forgotten – Entitles the data subject to have the data controller erase his/her personal data, cease further dissemination of the data, and potentially have third parties halt processing of the data (also known as Data Erasure).
- Data Portability – Right for a data subject to receive the personal data concerning them, which they have previously provided in a ‘commonly used and machine readable format’ and have the right to transmit that data to another controller.
- Privacy by Design – Inclusion of data protection from the onset of the designing of systems, rather than an addition. Controllers to hold and process only the data absolutely necessary for the completion of its duties (data minimisation). Also limit access to personal data to those needing to act out the processing.
- Data Protection Officers (DPO) – Mandatory DPO appointment and specific internal record keeping requirements for those data controllers and processors whose core activities consist of processing operations which require regular and systematic monitoring of data subjects on a large scale or of special categories of data or data relating to criminal convictions and offences.
The countdown for the GDPR coming into effect has begun. Gartner is, however, predicting that by the end of 2018, more than 50 percent of companies affected will still not be fully compliant.
For those organisations that are still looking to confirm if they are covered by the GDPR and need to comply, the following sites provide useful overview information:
- EU GDPR Information Portal, GDPR.org
- UK Information Commissioner’s Office, Guide to the GDPR
- European Comission, 2018 reform of EU Data Protect Rules
The new legislation is being implemented against a backdrop of renewed scrutiny and focus on data privacy issues as evidenced by the recent high profile Facebook Cambridge Analytica data scandal. It’s also likely that data privacy will continue to be a key theme through 2018 and beyond as governments seek to protect the digital rights of citizens and individuals become more aware of both the use and value of their personal information.
The current landscape points to an opportunity to embrace the GDPR not as a discrete, compliance driven event but rather as an important component of a larger strategy to innovate, evolve business models and capabilities to demonstrate trust, transparency and accountability. Customers are increasing valuing these traits, so businesses that embrace them should be looking to build real competitive advantage in the digital economy.