What is the General Data Protection Regulation (GDPR)?

The General Data Protection Regulation (GDPR) is a legal framework that sets guidelines for collecting and processing individuals’ data within the European Union (EU). The GDPR sets out the principles for data management and the rights of the individual while also imposing fines that can be revenue-based.

The General Data Protection Regulation covers all companies that handle EU citizens’ data, making it critical for corporate compliance officers at banks, insurers, and other financial companies.

Origins of the GDPR

GDPR took effect on 25 May 2018, replacing the 1995 EU Data Protection Directive. As an EU Regulation, it applies to all EU Member States without national legislation. It has a broad scope and applies to any organization, whether profit-seeking or not—regardless of size. 

The regulation applies if the data controller (i.e., an organization that collects data from EU residents), processor (i.e., an organization that processes data on behalf of a data controller, like cloud service providers), or data subject (i.e., a person) is based in the EU.

What are the 7 Key Principles of the GDPR?

The GDPR is based on 7 fundamental principles, which lie at its heart. These principles are not rules as such. Instead, they provide the context in which data protection should operate. As such, they should guide your approach to processing personal data.

1. Lawfulness, Fairness, and Transparency

This principle underscores the necessity of lawful processing of personal data, ensuring it’s done transparently and fairly to the data subject. Clarity, openness, and honesty about data use reinforce trust and compliance.

It mandates obtaining consent or having a legitimate reason for processing personal data, ranging from contractual obligations to vital interests of the data subject or for the public good. 

2. Purpose Limitation

Personal data must be collected for specified, explicit, and legitimate purposes and not further processed in a manner incompatible with those purposes. This principle ensures that data use aligns with the reasons for its collection, safeguarding users against unexpected or unauthorized use.

3. Data Minimisation

Data collected should be limited to what is necessary for the purposes for which it is processed. This principle aims to prevent excessive data collection and ensure that only pertinent data is held and processed.

4. Accuracy

Maintained data must be accurate and, where necessary, updated. Inaccurate data should be corrected or deleted promptly, emphasizing the importance of reliability and trust in organizations’ information.

5. Storage Limitation

Personal data should be kept in a form that permits identification of data subjects for no longer than is necessary for the purposes for which the personal data are processed. This principle minimizes the risk of data breaches and respects privacy by limiting data lifespan.

6. Integrity and Confidentiality

Personal data must be processed securely, protecting against unauthorized or unlawful processing, accidental loss, destruction, or damage. It highlights the importance of implementing appropriate technical and organizational measures to ensure data security.

7. Accountability

The data controller is responsible for and must be able to demonstrate compliance with the other GDPR principles. This includes implementing effective policies and measures that meet the principles of data protection by design and data protection by default.

What are the Individual Rights Provided by the GDPR?

The GDPR provides the following rights for individuals, designed to give them control over their data and how it is used. These rights include:

  • The Right to be Informed: Individuals have the right to clear information about how their data is used. Transparency is vital to building trust and ensuring users can make informed decisions about their data.
  • The Right of Access: This allows individuals to obtain a copy of their data and understand how and why it is processed, ensuring transparency and accountability.
  • The Right to Rectification: If personal data is inaccurate or incomplete, individuals can have it corrected, ensuring data accuracy and integrity.
  • The Right to Erasure: Also known as ‘the right to be forgotten,’ this right allows individuals to have their data deleted under certain circumstances, enhancing their control over personal information.
  • The Right to Restrict Processing: Individuals can request the restriction of their data processing in specific scenarios, giving them more control over their data.
  • The Right to Data Portability enables individuals to receive their data in a structured, commonly used format and transfer it to another data controller, facilitating ease and flexibility in data management.
  • The Right to Object: Individuals can object to processing their data in certain circumstances, including for direct marketing purposes.
  • Rights Concerning Automated Decision-Making and Profiling: Individuals are protected against potentially harmful decisions made without human intervention, ensuring fairness and transparency in automated decision-making processes.

What is GDPR Compliance?

The GDPR requires organizations to protect personal data in all forms by providing EU citizens’ the fundamental right to privacy. This is why compliance with the GDPR must be a top priority for companies of all sizes. They must ensure the company is postured to respond to all GDPR requirements and obligations. 

  • Conducting a Data Audit

A data audit is vital for GDPR compliance, mapping out data flows to understand what data is held, its source, who it’s shared with, and its usage. Identifying these aspects helps organizations align with GDPR requirements.

  • Appointing a Data Protection Officer (DPO)

Public authorities, those engaged in large-scale systematic monitoring, and those extensively processing sensitive data are among the organizations required to appoint a DPO. As outlined in GDPR Article 39, the DPO’s role includes advising on compliance, monitoring GDPR adherence, training staff, and serving as a contact point for data subjects and supervisory authorities.

  • Providing Detailed Reports

GDPR mandates the ability to furnish detailed reports on personal data handling, ensuring organizations can account for data processing activities. This includes demonstrating what data is processed, its purpose, and how it is protected, thereby enhancing transparency and accountability.

  • Implementing Measures to Protect Data

Protecting personal data under GDPR involves implementing technical and organizational measures to secure data against unauthorized access, loss, or damage. This includes adopting privacy by design, ensuring data encryption, and conducting regular security assessments to mitigate risks effectively.

What are the Penalties for GDPR Non-Compliance?

Non-compliance with the GDPR can result in severe financial and reputational damage. The regulation enforces a strict penalty regime to ensure organizations prioritize data protection.

  • Steep Fines: Organizations can face fines up to €20 million or 4% of annual global turnover, whichever is greater, for severe infringements such as not obtaining proper consent for data processing.
  • Tiered Penalties: Lesser violations, like record-keeping failures, can attract fines of 2% of annual turnover, emphasizing the need for comprehensive data management practices.
  • Liability of Controllers and Processors: Both data controllers and processors bear equal responsibility under GDPR, extending compliance requirements across the data management chain.
  • Mandatory Breach Notification: Failure to report a data breach within 72 hours can result in fines, highlighting the importance of swift action in data security incidents.
  • Corrective Powers of DPAs: Data Protection Authorities (DPAs) can impose various sanctions, including data processing bans and orders to rectify or delete data, ensuring compliance with GDPR standards.

The Future of Privacy

The General Data Protection Regulation (GDPR) is a comprehensive data protection law that provides a single set of rules for protecting the privacy of individuals in the European Union. It gives individuals greater control over their data and places new obligations on organizations that process personal data.

Compliance with the GDPR is not just a legal obligation but also a way to build trust with customers and users, demonstrate accountability, and enhance your organization’s reputation.

To comply with GDPR and protect the personal data of customers and users, organizations need to adopt a robust data protection strategy covering the principles and rights outlined in the regulation.

Free Webinar | This webinar will take place on June 27th, 4:00 pm GMT

Register Now