The EU General Data Protection Regulation (GDPR)
In the European Union (EU), privacy and data protection are fundamental human rights enforced through law. The GDPR supersedes existing national data protection laws across the EU, bringing uniformity by introducing just one main data protection law for organizations to comply with.
Significant and wide-reaching in scope, the Regulation brings a 21st-century approach to data protection. It expands the rights of EU residents to have more control over how their personal data is collected and processed, and places a range of new obligations and responsibilities on organizations to be more accountable for data privacy and protection.
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The GDPR – what it means for Canadian and US organizations
The GDPR applies to any organization processing and storing EU residents’ personal data, irrespective of the organization’s location or where the data is processed. Canadian and US organizations with any connection to the EU – whether through subsidiaries, customers, or suppliers – stand to be affected. Organizations should therefore take steps to determine whether the GDPR is applicable, and consider revising their information handling processes to ensure compliance.
GDPR compliance is not just a matter of ticking a few boxes; the Regulation demands that you are able to demonstrate compliance with its six data processing principles. This involves taking a risk-based approach to data protection, ensuring appropriate policies and procedures are in place to deal with the transparency, accountability, and individuals’ rights provisions, and building a workplace culture of data privacy and security.
In some cases, the GDPR compliance steps will supplement existing measures that many North American organizations adopt as a matter of good practice or to comply with sector or state privacy laws, e.g. the Health Insurance Portability and Accountability Act (HIPAA).
With an appropriate privacy compliance framework in place, not only will you be able to avoid significant fines and potentially heavy reputational damage but you will also be able to show customers that you can be trusted with their data, and ultimately derive added value from the data you hold.
The business benefits of the GDPR
- Build customer trust
- Improve brand image and reputation
- Improve data governance
- Improve information security
- Gain competitive advantages
Learn more about the steps you need to take to prepare for the GDPR and demonstrate compliance. See checklist >>
The key elements of the GDPR
Personal data, in the context of the GDPR, covers a much wider range of information than ‘personally identifiable information’ (PII) in North America. It includes any information that can directly or indirectly identify a natural, living person, and can be in any format. This can include social media posts, photographs, lifestyle preferences, transaction histories, and even IP addresses.
The Regulation is much stricter about the processing of special categories of personal data (‘sensitive data’), including some types of data not covered by older data protection laws such as genetic and biometric data. Such data may now not be processed at all, except in very specific circumstances.
Examples of personal data: name, address, email address, photo, IP address, location data.
Examples of special category data: race, religion, political opinion, sexual orientation, health information.
The GDPR does not merely apply to organizations located in the EU. Those based in Canada or the US must also comply if
- Process personal data through a business establishment in the EU
- Offer goods or services to EU residents. The organization’s website simply being accessible from the EU will not be sufficient to trigger the application of the GDPR. For the Regulation to apply, the organization must clearly intend to offer services to individuals living in the EU.
- Monitor the behavior of EU residents. This includes tracking Internet users, e.g. through advertising technology platforms, to profile and analyze their preferences and behavior.
In some circumstances, North American organizations that are not established in the EU but meet one of the above qualifying factors must appoint an EU-based representative as the contact person for all questions on data protection from consumers and relevant supervisory authorities. Appointing such a representative is not required where processing is only occasional or does not include large-scale processing of special categories of data.
organization (the data controller) also fall within scope of the GDPR and have specific compliance obligations. Examples include an organization that processes payroll or a Cloud provider that offers data storage, even if its server sits outside the EU.
Data protection principles
Personal data must be processed according to the six data processing principles. It must:
- Be processed lawfully, fairly, and transparently (‘lawfulness, fairness and transparency’)
- Be collected only for specific, legitimate purposes (‘purpose limitation’)
- Be adequate, relevant, and limited to what is necessary (‘data minimisation’)
- Be accurate and kept up to date (‘accuracy’)
- Be stored only as long as is necessary for the purposes specified (‘storage limitation’)
- Processed in a secure manner “using appropriate technical and organisational measures” (‘integrity and confidentiality’)
Accountability and governance
You must be able to demonstrate compliance with the GDPR by:
- Establishing a governance structure with roles and responsibilities
- Keeping a detailed record of all data processing operations
- Documenting data protection policies and procedures
- Conducting data protection impact assessments (DPIAs) for high-risk processing operations
- Implementing appropriate measures to secure personal data.
- Offering staff training and awareness programs
- Where necessary, appointing a data protection officer
Data protection by design and by default
There is a requirement to build effective data protection practices and safeguards from the very beginning of all processing:
- Data protection must be considered at the design stage of any new process, system, or technology
- DPIAs are an integral part of privacy by design
- The default collection mode must be to gather only the personal data that is necessary for a specific purpose
Lawful basis for processing
You must identify and document the lawful basis for each processing activity of personal data that takes place. The lawful bases are:
- Explicit consent from the individual
- The necessity to perform a contractual obligation
- Protecting the vital interests of the individual
- The organization’s legal obligation
- Necessity for the public interest
- The legitimate interests of the organization
The GDPR is stricter about how to obtain explicit consent:
- Consent must be freely given, specific, informed, and unambiguous
- A request for consent must be intelligible and in clear, plain language
- Silence, pre-ticked boxes, and inactivity will no longer suffice as consent
- Consent can be withdrawn at any time
- Consent for online services from a child under 16 is only valid with parental authorization
- Organizations must be able to evidence consent
Privacy rights of individuals
Individuals’ rights are enhanced and extended in a number of important areas:
- The right of access to personal data through subject access requests (SARs)
- The right to correct inaccurate personal data
- The right in certain cases to have personal data erased (the ‘right to be forgotten’)
- The right to object
- The right to move personal data from one service provider to another
Transparency and privacy notices
Organizations must be clear and transparent about how personal data is going to be processed, by whom and why. Such information should be given in a privacy notice, which must be provided in a concise, transparent, and easily accessible form, using clear and plain language
Data transfers outside the EU
The transfer of personal data outside the EU is only allowed:
Read more about data transfers
- Where the EU has designated a country as providing an adequate level of data protection
- Through model contracts or binding corporate rules
- By complying with an approved certification mechanism, e.g. the EU-US Privacy Shield
Data security and breach reporting
Personal data needs to be protected against unauthorized or unlawful processing and against accidental loss, destruction, or damage using “appropriate technical and organisational measures”.
If a data breach does occur, it has to be reported to the relevant supervisory authority within 72 hours of the organization becoming aware. Any individuals impacted should also be informed, if there is a risk to their rights and freedoms, such as identity theft or personal safety.
Data protection officer (DPO)
The appointment of a DPO is mandatory for:
- Public authorities
- Organizations involved in high-risk processing
- Organizations processing special categories of personal data
A DPO is responsible for:
- Informing and advising the organization of its obligations
- Monitoring compliance, including raising awareness, staff training, and audits
- Cooperating with the relevant authorities and acting as a contact point
GDPR enforcement and penalties
The GDPR has attracted media and business interest because of the administrative fines for non-compliance.
There are two tiers of administrative fines that can be levied:
- Up to €10 million (about $12 million), or 2% of the organization’s global annual turnover – whichever is higher
- Up to €20 million (about $24 million), or 4% of the organization’s global annual turnover – whichever is higher
The fines are based on the specific articles of the Regulation that the organization has breached. Infringement of the organization’s obligations, including data security breaches, will be subject to the lower level of fines, whereas infringements of an individual’s privacy rights will be subject to the higher level of fines.
Liability for damages
The GDPR also gives individuals the right to compensation of any material and/or non-material damages resulting from an infringement of the Regulation. In certain cases, not-for-profit bodies can bring representative action on behalf of individuals. This opens the door for mass claims in the case of large-scale infringements.
For some practical guidelines on how to become compliant, take a look at our key steps to GDPR compliance. See checklist >>
How IT Governance can help your organization become GDPR-compliant
IT Governance, a leading global provider of IT governance, risk management, and compliance solutions, is at the forefront of helping organizations across the global address the challenges of achieving and maintaining GDPR compliance.
We offer comprehensive solutions, services, and expertise to help you meet your GDPR compliance objectives.
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