Understanding General Data Protection Regulation Compliance
In April of 2016, the European Union Parliament and Council voted to replace Data Protection Directive 95/46/ec and enact an overreaching data security regulation named the General Data Protection Regulation (GDPR). The law will go into effect in the May 25, 2018 and be the primary law regulating how businesses protect EU citizens’ personal data. Companies that need to meet the old security directive will need to be in compliance of the new law on that date or face stiff fines and other penalties
The GDPR was created in response to the myriad of data security issues many businesses have had in the EU economic sector over the past several years. By making all of the EU member nations adhere to the same data protection standard, the hope is that this new mandate will be a baseline standard for companies who handle EU citizens’ data.
Some of the key provisions of the law include requirements to:
- Consent subjects for data processing.
- Provide fast data breach notifications if a breach has occured.
- Anonymize collected data to protect consumer privacy.
- Appoint a “data protection officer” for certain companies.
- Safely handle the transfer of data across borders.
What Businesses Need to Be Compliant?
This is where the law gets a little tricky. Every business that markets or sells goods and services within the confines of the European Union member states has to meet the GDPR regulation. As a result, the global implications of this law are substantial. For businesses that will need to be in compliance to continue doing business with EU citizens, the GDPR will likely have a significant impact on the way that your business uses its core information systems.
The GDPR will be enforced by what are called “Supervising Authorities” (SAs). SAs will interpret “substantially affects” on a per-case basis since the context of data processing, the type of data, the purpose of processing and whether the processed data causes damage, loss, or distress to individuals; has an effect of limiting rights of certain groups or individuals; affects individual’s economic status or circumstances around their economic health; inflicts potential reputational damage; and many more qualifications.
To ensure these qualifications are met, SAs will be looking for organizations to do many of the following:
- Encrypt personal data
- Prevent unauthorized access to personal data (or equipment used in the processing of this data).
- Prevent unauthorized access to the use of personal data (or the equipment used in the processing of this data).
- Take part in independent assessment of equipment to evaluate the nature and potential severity of privacy risks.
- Have the ability to recall and report personal data in a timely manner in the event of an incident.
- Ensure continuous confidentiality and integrity of all equipment used in the processing of personal data.
- Perform regular tests to assess the effectiveness of measures to ensure data security.
The GDPR is filled to the brim with language referencing security of computing infrastructure as a precursor to the actual security of the data held within these constructs. Before you can build a GDPR-compliant infrastructure, you must understand how your IT needs to be altered to do so.
What Are the Consequences if You Fail to Comply?
Since the law that the GDPR is replacing is over twenty years old, the vast changes in computing, marketing, and sales coupled with the prevalence of threats to data security has produced some stark changes in the way the GDPR punishes companies that are found to be in violation of this mandate. SAs have far more authority under the GDPR than under the old directive. They hold investigative and corrective authority, and will have a system to issue organizations warnings for non-compliance. They will also perform audits, dictate changes, impose deadlines for those corrections, order data to be forfeited or erased, and even be given the power to block companies from transferring data to any other jurisdictions until all compliance mandates are met.
The biggest role SAs will have is assessing fines for noncompliance; and, the fines are substantially larger than under the previous law. Fines will be determined based on the circumstances of each case, and if substantial evidence is there to find that an organization’s breach wasn’t of their own negligence, the SA may not impose a fine at all. The fines that are imposed may be up to two-to-four percent of total global turnover or up to 20 million euros, whichever is greater.