Why is GDPR Important?
The issue of data privacy both offline and on the internet has been becoming more and more acute over the years. Cybercriminals have been on the hunt for private data to steal identities, initiate cyberattacks, ask for ransom, and much more. Even credible companies that use private data strictly for targeted marketing become victims of data breaches and unwittingly hand this type of information to threat actors.
That’s why it was important to regulate data privacy at the highest levels. While data protection laws have existed for over 20 years, many of them were no longer applicable to the fast-growing technological environment. That’s why, in 2016, the European Union issued a major data protection directive called the General Data Protection Regulation or GDPR.
This 160-page long document contains a set of laws and regulations applicable to managing private data. If any of your clients are citizens of the European Union, your business must comply with GDPR. Otherwise, it can face significant fines.
Let’s take a closer look at General Data Protection Regulation and its importance for your business.
What is GDPR?
GDPR is a set of laws that regulate the use of personal data online and offline. If your business works with the personal data of European Union residents, it must comply with all the provisions listed in this data protection directive. These regulations apply to businesses of all types and sizes as well as governments. Non-compliance with GDPR clauses could lead to significant fines. Depending on the severity of the violation, the case could end up in court and cause serious damage to the company’s reputation.
Companies, governments, individuals, and anyone else who handles personal data can be working from outside the EU. However, as long as at least one of your clients is a citizen of the European Union, the relevant data protection law applies.
GDPR is a long and complex document that requires careful studying. A minor mistake could cost a company thousands of dollars in fines.
GDPR revolves around the concept of personal data. The European Commission defines personal data as information related to identified or identifiable persons. If a piece of data can play a role in identifying a certain individual, it’s personal data.
Examples of sensitive personal data include:
- Name and last name
- Home address
- Email address with name and last name in it (e.g. email@example.com)
- IP address
- Location data
- Patient data
Businesses have to be especially careful when collecting information on their websites. Cookie IDs are also considered personal data.
The entire set of data protection regulations focuses on the rights of people who share their personal data. These rights include:
The Right to Be Informed
When a consumer is sharing personal data, they have a right to know exactly what the company is planning to do with it. For example, if you are collecting personal information, such as name, last name, and email address, you have to explain to the user what you are going to use it for.
For a business, it means that when the user signs up for a newsletter or shares information to get a discount, you have to explain how you intend to use this information. You also need to make sure that the information about the intended use is readily available and visible. If you hide it somewhere that users don’t ever visit, you could face a fine.
The Right to Be Forgotten
The right to erasure is clearly stated in the GDPR. It allows the user to ask you to erase their data in certain situations. For example, if the data is no longer relevant to the goals it was initially collected for. When a user requests erasure, the business must comply and erase all related personal data within one month of receiving the request.
This doesn’t just require you to pay close attention to the users’ data-related requests. You need to make sure that you know exactly where their data is located. When you receive the erasure request, it shouldn’t take you long to locate all the data and get rid of it.
Key Principles of GDPR
Knowing the main principles of GDPR can help you build your data protection and security strategy. They include:
- Transparency – when you request and process user data, you need to have a reason for doing this. You shouldn’t withhold information about your plans for the data so the user can decide whether they want to share it. Meanwhile, you have to make it easy to understand why you are collecting data, and what a user can do to erase it when necessary.
- Purpose – the GDPR limits the use of personal data for specific purposes. You need to establish the purpose of collecting and processing data and be straightforward about it. The privacy notice should communicate this purpose and make it clear to the user that they can refuse to share the data. If the purpose changes at any time, you need to obtain consent again.
- Minimal use – when collecting personal data, you need to collect a minimal amount for the stated purpose. GDPR stresses data minimization to ensure privacy and compliance. For example, if you are gathering data to send out a discount, you can’t use this data to email newsletters unless you tell about this separately.
- Accuracy– when you collect data, you need to ensure its accuracy before storage. It’s up to you to check the data quality and erase incomplete data. You also need to run regular audits to make sure that data stays accurate. For example, you may want to use an email verification tool to make sure that email addresses are still valid.
- Limited storage time – when you store private data, GDPR regulates the length of time you can store it for. You need to provide justification for storing this data for a certain period of time. You may want to establish a policy that controls how long you keep the data and provides guidelines for erasing it on time.
- Security and confidentiality – GDPR requires you to implement data security measures that keep the personal data of your users safe. You must protect this data diligently and make sure it doesn’t fall into the wrong hands. You are responsible for anything that happens with the data you collect and store.
- Accountability – to prove your compliance to the GDPR regulations, you need to implement policies, principles, and methods related to data processing, storage, and safety. All businesses must have relevant documentation that proves their responsibility.
In short, if you want to collect personal data, you need to make sure that users know about your plans for this information, stick to this plan closely, and design measures to keep the data safe.
Importance of GDPR
GDPR is an important set of rules that regulates the use of personal data. While it may seem that studying these regulations and ensuring GDPR compliance is time-consuming and complicated, it comes with many benefits for businesses all over the world.
The key benefits you can enjoy when ensuring GDPR compliance include:
Better Security Measures
The number of cybercrimes is growing exponentially. By 2025, the cost of cybercrime will reach $10.5 trillion dollars. Threat actors are targeting businesses of all sizes. Small companies feel the impact the most. Some of them never recover from a cyberattack that steals the personal data of their clients.
GDPR compliance makes it easier for companies to establish high-quality cybersecurity measures. Rules make it clear how to go about data safety, security audits, and other elements of your information security plan,
By using GDPR as your data security north star, you can make sure that customer, user, and internal data is safe. This, in turn, improves your chances of staying ahead of the competition and improving the company’s bottom line.
Companies that are serious about data security protect their reputation. When you start warning your users about data collection and explaining how you are planning to use their information, customers, clients, and users feel protected. The transparency encouraged by GDPR makes it easier to gain trust.
Clients who get an opportunity to opt out of data processing and collection are less likely to feel unsatisfied with the way you use their data. The more clarity you add to the data gathering and implementation process, the happier your customers are likely to be. This can improve your reputation, streamline retention, and encourage word-of-mouth marketing.
Enhanced Data Management
GDPR compliance doesn’t just help your company improve data security, it contributes to better data management efforts. Since you need to conduct regular internal data audits, you can discover unused data or find new opportunities for data storage optimization.
When you get a better understanding of your data, you can design an effective data management system. This, in turn, can streamline your sales and marketing processes.
Many businesses choose to delegate data security and optimization to a data protection officer. This employee focuses on identifying, mapping, and tracking data flow throughout the company.
If you ignore GDPR compliance, you can face significant fines. Companies that ignore the rules and don’t follow the main principles of data protection and management may need to pay significant amounts or even face legal action.
GDPR fines can be as high as 20 million or 4% of your company’s annual revenue from the previous financial year, whichever amount is higher. For many businesses, such fines could easily lead to bankruptcy.
Before issuing a fine, authorities will consider a wide variety of factors, including the gravity of the infringement, your intention to violate the rules, measures you took to stay in compliance with GDPR, history of violations, and other aggravating or mitigating factors.
Staying Compliant with GDPR
Ensuring General Data Protection Regulation Compliance is essential to running a business. If your clients are citizens of the European Union, you need to pay close attention to this important set of data security rules. By staying compliant, you don’t just avoid significant fines. You improve data security, enhance your reputation, take advantage of new data management tactics, and much more.
The earlier you study GDPR requirements, the more protected your customers, clients, and users will be. Keep in mind that GDPR works only for the EU. Data protection rules and legislation vary from country to country.