GDPR is a European Union (EU) and European Economic Area (EEA) data privacy regulation that came into effect on May 25, 2018. It was drafted as a result of the Digital Age and its consequences. GDPR requires all companies that handle people’s personal data in the European Union to have a robust, written data policy compliant with it. In addition, compliance with GDPR is mandatory for any company outside the EU that takes an interest in the personal data of EU residents and “processes and analyses” their data (this includes anything like “selling” or “storing”).
How is GDPR Relevant to US Companies?
GDPR has numerous consequences for companies across the world, including US businesses that do business with EEA residents or who process the personal data of EU citizens.
According to Article 3(2) of the general provisions, the regulation “applies to the processing of personal data of data subjects who are in the Union by a controller or processor not established in the Union, where the processing activities are related to: (a) the offering of goods or services, irrespective of whether a payment of the data subject is required, to such data subjects in the Union; or (b) the monitoring of their behavior as far as their behavior takes place within the Union.“
Failure to comply with data protection rules may result in enormous fines of up to £18 million or 4% of a firm’s annual sales. The GDPR Enforcement Tracker, which displays EU firms fined due to GDPR noncompliance, provides an idea of the strictness of GDPR. Under the GDPR, users have eight fundamental rights. Organizations must incorporate these rights into their data management strategies:
- The right of access: This allows the data subject to receive a copy of their personal data, including how it is processed.
- The right of rectification: This allows the data subject to request that incorrect or incomplete personal data be updated and corrected.
- The right to erasure: This is also known as the “right to be forgotten.” It allows a subject to request that their personal data be deleted.
- The right to restrict processing: This is invoked when the subject contests the accuracy of the data.
- The right to data portability: This allows the subject to access and reuse their personal data for their purposes across different services.
- The right to object: This allows the subject to object to their personal data being processed if there are grounds relating to their particular situation.
- The right to be informed: This requires that data subjects be informed of their personal data processing.
- The right to be notified: Data breaches must be communicated to the concerned data subjects.
Seven Tenets of GDPR Compliance
Privacy policies are the cornerstone of an organization’s privacy management to ensure that it can explain what it does with personal data. GDPR compliance requires a robust policy, complete with details about how the data subject is protected.
Minimization of Personal Data Processing
Compliance requires limiting personal data processing to only what is necessary for completing tasks assigned. The data minimization principle states that organizations should only handle the data they need for a specific purpose. This requirement helps you manage your data effectively and protects you from cybercriminals obtaining confidential information in the case of a malicious attack.
Automated Database Encryption
Companies processing personal data are required to encrypt all systems containing user data. Compliance involves the development of encryption policies and continuous monitoring for access attempts, brute force attacks, and any other suspicious activity aimed at gaining access to your encrypted databases.
Consent Management Procedures
GDPR regulates how companies manage the consent that their customers give them for using their data. Therefore, it’s essential that you deploy processes that allow users to easily withdraw consent and require them to provide affirmative consent for data processing before any information is collected or stored on your servers.
Online users must be asked for and give consent before your website may collect their information. Consumers must be informed of the data collection when they visit your site, and consent is required under GDPR. This concept gives users a choice to accept or refuse trackers (cookies). Consent tracking allows a firm to cease monitoring users if they haven’t agreed to cookies in advance.
Regular Data Protection Impact Assessments (DPIAs)
User data collection must become an integral part of DPIAs to properly assess the impact of new products and services from a privacy perspective. Compliance requires the organization to identify and assess privacy risks, document them, and offer mitigation plans. This process helps companies improve their security procedures before a data breach occurs.
A DPIA involves:
- Risk assessment of individuals and their data
- Evaluate compliance measures in place
- Identify and implement corrective actions to mitigate the risks
The UK’s independent authority for information rights, the ICO, has developed a DPIA assessment checklist for businesses to use in their platforms to identify data management gaps and set security measures.
Data Processing Record Keeping
Organizations must keep comprehensive records of their processing activities to document and provide a legal basis for any personal data they acquire and manage under the GDPR. These records should show:
- A detailed description of the different types of personal data.
- Your reason for collecting personal information.
- With whom data is shared.
- A description of the individuals who are the subject of the data.
- Delete time limits for each category of data gathered.
- The data controller’s name and contact information, as well as the data protection officer/office’s name and contact information
Mapping personal data enables you to categorize it and map how each piece of information flows through your company and is captured, who has access to the data, where it’s stored, and when it leaves your database. Such a detailed map makes dealing with large data categories easier, especially when regulators ask to see the records.
GDPR Best Practices
When it comes to GDPR, many international companies have set up their businesses in the UK and Europe to comply with GDPR. Compliance is essential when handling data from EU/EEA residents because if you don’t follow GDPR compliance, you can face expensive fines. This has been a great opportunity for European firms to expand into the US market, as they are already compliant with data protection regulations.
Also read: Are Companies Protecting Employee Data?
GDPR Best Practices for American Companies
The global reach of this law means that all American firms must take steps to ensure that they remain fully compliant with GDPR standards. The following are some best practices to help you stay on the right side of the law:
- Compliance means that every business should design and implement comprehensive security strategies and policies to protect user information and company data effectively. Compliance with GDPR should be considered early on in the planning stage since this will help avoid costly mistakes down the line.
- For any business, compliance with GDPR mandates that your firm have a designated Data Protection Officer (DPO). The DPO works closely with other executives to provide data protection measures and keep company personnel informed of relevant requirements under GDPR. All personnel who handle personal data must be aware of their responsibilities, and managers must meet these obligations. Compliance involves creating an environment where personal data is dealt with responsibly, so it’s critical for businesses to understand their obligations under this law today.
- Companies must take responsibility for protecting user information but acquiring consent from users isn’t always enough. Firms are required to implement technical security measures that protect all personal information against cyberattacks. Compliance requires close adherence to the GDPR Compliance by Design doctrine, which means that data protection should be designed into your firm’s IT systems, policies, and practices.
- Compliance requires maintaining comprehensive records of all processing activities which specify what types of personal information are collected and how it is used; this will make it easier for you to demonstrate compliance with GDPR mandates.
- Compliance entails implementing technical safeguards, data governance policies, and regular audits of your company’s personal data processing activities.
The Key Compliance Takeaway
Compliance with GDPR requirements will provide a competitive advantage and improve business processes overall. In addition, compliance with GDPR is not an arduous task and can be easily implemented by any company without facing major disruptions to their workflow. All you need to do is follow these seven tenets to create robust processes for GDPR compliance.