The General Data Protection Regulation (GDPR) is a European Union privacy law which will establish a global standard for both the collection and use of data online. It will ensure that all personal data has to be managed in a safe and secure way, has to be gathered lawfully, is only used for the purposes for which it was collected, and must be accurate and up to date. When the law comes into force in May this year, companies doing business in the 28-member states will have to accommodate rigorous opt-in, privacy and data transparency policies or face fines of up to 4% of their total revenues.
The problem for business with any regulation coming from Europe has always been a compliance burden which many smaller companies struggle to achieve. In a climate of increasing information risk; an area in which I specialise, businesses know that they have a better than 60% chance of a data breach, as high as 80% in some geographies, given the sophistication of the powerful criminal hacking tools now freely available as a service to anyone wishing to buy them.
Two recent examples may immediately spring to mind, TalkTalk which I wrote about in The Guardian and of course Equifax. Both were catastrophic data breaches in different technical circumstances, but under the new GDPR, the former’s £400,000 penalty from the Information Commissioner (ICO) might have been as high as £59m. A YouGov survey last year revealed that 71% of UK businesses are unaware of fines under the GDPR and a number fear they would go out of business if forced to pay the maximum fines.
As things stand, The Register online publication reports, the Information Commissioner can presently apply fines of up to £500,000 for contraventions of the Data Protection Act 1998. Once GDPR comes into force on 25 May, this year, there will be a two-tiered sanction regime – with lesser incidents subject to a maximum fine of either €10 million (£7.9 million) or 2 per cent of an organisation’s global turnover (whichever is greater). The most serious violations could result in fines of up to €20 million or 4 per cent of turnover (whichever is greater).
Most organisations will have to fundamentally change the way they organise, manage and protect data. And to help prepare online marketers for a brave, new, more private world, a group of security and risk analysts at Forrester issued a list of issues companies must consider to be compliant by May and I’ve broken these down a little further for salient points.
- First and foremost, do a privacy assessment. Benchmark your current strategy against existing laws and best practices, build a business case for future investments, and present your new privacy initiative to your company’s board of directors.
- Hire a data protection officer; that’s if you can find one who isn’t already spoken for. If one of your core activities is the systematic collection of personal data on a large scale, this is a must. Your DPO should partner with privacy peers to align controls and policies with an eye toward establishing privacy as a competitive differentiator. The GDPR’s definition of personal data makes it clear that even online identifiers, for example an IP address, can be personal data and the new definitions provide for a wide range of personal identifiers to constitute personal data, reflecting changes in both technology and the way organisations collect information about people.
- Establish a crisis, breach notification plan. The new law allows companies only 72 hours to issue notice of a significant data breach. If it’s t’s tough enough to give proper and timely notification to regulators, it’s even tougher to communicate it in a sensitive fashion to customers. Plan for failure and be ready to leverage corporate communications and your marketing staff—as well as third parties—to get the work done.
- Reassess your outside data and analytics, partners and providers. Under GDPR, they too can be held liable for privacy violations. (a cause of real worry if not panic among some companies) This changes the arrangement in two ways: They may charge more to allow for costs of compliance and they may need more visibility into your data, thereby exacerbating the risk of data leakage.
- Know where all the data is. The GDPR’s “right to be forgotten” clause gives users full access to and control of the data you keep on them. As a result, you have to know where personal data is at all times and be ready to delete it. Third-party contracts must also allow for immediate data deletion.
- Do you hold any data on children or juveniles; if so pour yourself a strong drink now. GDPR sets the age of digital consent at 16, though member states can decide to lower it to 13. There is nothing however, that will stop a determined 13-year-old from setting up online accounts when visiting countries where they’re digitally legal? Don’t count on box-ticking mechanisms to cover your liability here. Instead, institute you may need one day to demonstrate you have pursued real initiatives to educate children about privacy and security risks online.
- What is an ‘opt in’. No, really, what do you think it is and what does GDPR says it is? A great many companies have complied with opt-in rules set in the EU, but regulators continue to catch those not following the letter of the law. A fundamental issue to watch out for: failing to get a user’s consent to share his or her data with third parties.
- International data transfers remain an open-ended question. GDPR doesn’t set new rules for international transfer of business data.
- Company procedures for disclosing data to law enforcement. GDPR has a rule stating that data controllers cannot disclose data in its entirety and must notify the relevant data protection authority when a request is made. Concerned companies can use encryption and data masking to make data unusable, but it’s essential that they manage their encryption keys accurately.
So, nothing there to feel cheerful about; I’m sorry and BREXIT will make no difference whatsoever as enshrining this in UK law appears inescapable as the ICO pointed-out at a presentation I attended. If we are going to continue doing business and share data with Europe, then GDPR is a fact of life.
If you can point to at least five of those ten points and remain confident, then you are well on your way towards the required level of regulatory compliance. Congratulations. Computer Weekly suggests that some 40% of companies have done very little prepare for a substantive change in the regulatory environment surrounding personal data. For much larger businesses and for some of the more recent small events I’ve spoken at, I’ve noticed that information risk and compliance are attracting Senior Counsel to a discussion that was once unique to the IT team. This illustrates how seriously the matter is being viewed by those who might have most to lose from a ‘Significant data breach.’
And finally, Good luck.
Article written by Simon Moores, a Technology Futurist and information risk consultant. A former ‘Technology Ambassador’ for the British Government, he is a Vice President of the Conservative Science and Technology Forum, specialising in information security risk, the evolving nature of artificial intelligence and the ethical challenges of the new attention economy.
A Guardian newspaper contributor, Simon advises organisations and governments on the converging and accelerating technology trends now shaping the future of business and society.