In 2016, the European Union adopted the General Data Protection Regulation (GDPR), which lays down rules relating to the protection of natural persons with regard to the processing of personal data and sets a high standard for data protection and privacy in the European Union. By establishing clear guidelines, GDPR aims to give individuals greater control over their personal information, thus promoting transparency and accountability among businesses.
GDPR applies to any data processing within the activities of a controller or processor based in the EU, regardless of the location of the processing. It also covers data processing by non-EU entities if related to offering goods or services to individuals in the EU or monitoring their behavior within the Union. Additionally, GDPR applies to controllers outside the EU when their activities are subject to Member State law. This includes businesses in various sectors, such as technology, healthcare, and finance.
United States has also implemented several comprehensive privacy bills on state level. As of 2024, the following states have adopted their own privacy laws: California, Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Kentucky, Maryland, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, Oregon, Rhode Island, Tennessee, Texas, Utah and Virginia.
In addition to the GDPR, several other legal acts may impact your business operations within the EU:
- the ePrivacy Directive governs the use of cookies and tracking technologies, requiring user consent for data collection;
- Directive 2019/770 provides for a high level of consumer protection, by laying down common rules on certain requirements concerning contracts between traders and consumers for the supply of digital content or digital services;
- the EU Digital Services Act (DSA) aims to create a safer online environment by enhancing platform accountability and user rights. Complementarily, the DSA promotes fair competition among digital platforms, preventing monopolistic practices;
- the NIS Directive focuses on improving cybersecurity for essential services and digital providers, mandating robust security measures;
- other regulations.
The GDPR imposes a range of obligations on organizations that handle personal data. Key obligations include:
- Lawful basis for processing: organizations must establish a lawful basis for processing personal data, which can include consent, contractual necessity, legal obligations, vital interests, public tasks, or legitimate interests;
- Consent: when relying on consent, it must be freely given, specific, informed, and unambiguous. Organizations must provide clear information about data usage and allow individuals to withdraw consent easily;
- Accountability and documentation: organizations must demonstrate compliance by maintaining records of processing activities, conducting Data Protection Impact Assessments (DPIAs) when necessary, and implementing data protection policies and training for staff;
- Regular audits and reviews: organizations should conduct regular audits of their data processing activities and review their compliance measures to adapt to any changes in data protection laws or business practices.
This overview highlights only a part of the extensive obligations organizations must fulfill under the GDPR. Compliance is an ongoing process that requires continuous monitoring, adaptation and education.
The General Data Protection Regulation imposes significant penalties for non-compliance to ensure that organizations prioritize the protection of personal data. Understanding these penalties is crucial for organizations handling personal data. Regulation outlines a two-tiered system for fines based on the severity of the violation:
- up to €10 million or 2% of global annual turnover (whichever is higher) for less severe infringements, such as failing to maintain records of processing activities or not appointing a Data Protection Officer (DPO) when required;
- up to €20 million or 4% of global annual turnover for more serious violations, such as breaches of data subject rights or failing to implement adequate security measures.
To reduce the financial risks associated with non-compliance with data protection legislation in the EU, we recommend taking the following preventive measures:
- implement appropriate data management mechanisms: develop policies and procedures for the processing, storage and transfer of personal data in order to ensure compliance with GDPR requirements;
- invest in data security: apply technical and organizational measures to protect personal data from hacking and unauthorized access;
· conduct regular data protection training: train employees on data protection best practices to reduce the risk of errors and ensure compliance;· conduct a data protection impact assessment (DPIA): identify and eliminate potential risks (conduct a Gap assessment) for data privacy through a comprehensive assessment of the company's activities;· appoint a data protection officer (DPO): appoint a qualified person or company to oversee data protection compliance and ensure compliance with data protection rules within the company.
- Legal obligations: compliance with GDPR and related regulations is not optional. Businesses must adhere to these laws to avoid legal repercussions, including significant fines and penalties;
- Building trust: demonstrating compliance fosters trust with customers and stakeholders. By prioritizing data protection, businesses can enhance their reputation and build stronger relationships;
- Mitigating risks: non-compliance can lead to data breaches, which not only harm individuals but can also result in costly legal actions, loss of business, and damage to brand reputation. A proactive compliance strategy helps mitigate these risks;
- Competitive advantage: businesses that prioritize compliance may gain a competitive edge. Consumers increasingly prefer companies that demonstrate a commitment to data privacy and security;
- Adaptation to changing regulations: The landscape of data protection laws is evolving. Staying compliant ensures that businesses are prepared for new regulations and can adapt swiftly to changes in legal requirements;
- Operational efficiency: Implementing robust compliance frameworks can streamline processes and improve data management practices, leading to increased operational efficiency.
Privacy Legal Solutions for your business
At PLS we understand the critical importance of privacy compliance for your business. Organizations today are mandated to protect personal data, ensuring transparency, consent, and accountability. We are ready to guide you through these obligations, helping you implement robust data protection strategies that not only mitigate risks but also enhance your reputation. Stay compliant and elevate your business with our tailored legal solutions (see our List of services).