You may have heard of GDPR in the context of data security and privacy, but do you fully understand what it means for your organization? Although it may seem complex, it’s crucial to grasp the implications of GDPR for your business.
Non-compliance with GDPR can have severe consequences, including fines and reputational damage. Thus, it’s vital to take responsibility for understanding and adhering to data protection regulations, as this can significantly impact your organization’s success and survival in the market.
What is GDPR?
GDPR is the European regulation that came into force on May 25, 2018, aimed at enhancing and unifying personal data protection across Europe. It grants individuals greater control over their personal data, while holding organizations accountable for how they handle and protect this data—regardless of whether the organization is located within the EU or not.
This regulation imposes significant obligations on organizations. It's not enough to simply develop a data protection strategy; organizations must also demonstrate compliance with GDPR. This includes documenting adherence to internal procedures and policies. If an organization cannot provide evidence of its GDPR efforts, it essentially doesn’t exist in the eyes of EU authorities, which can lead to severe consequences.
Who does GDPR apply to?
In short, GDPR applies to everyone. Almost every organization processes personal data in some form, so all must consider how to comply with European legal requirements as long as they operate within the EU or handle data about EU citizens.
Whether you’re selling homemade hats or working in a large corporation, GDPR affects you. However, the extent of its impact varies depending on the organization’s size, services, and the amount of sensitive personal data it handles.
Why is GDPR important?
GDPR is a critical regulation in today’s society, providing individuals with robust protection for their personal data and privacy.
In the digital age, where personal information is often dispersed across various platforms and services, having a regulation like GDPR that guarantees security and confidentiality is essential. It also ensures that organizations take responsibility for processing personally identifiable information and implement necessary measures to protect it.
Compliance with GDPR is also vital for businesses, as non-compliance can lead to severe consequences, including hefty fines and reputational damage, which can negatively impact profits and growth potential. By ensuring GDPR compliance, organizations can also boost their business value by increasing trust and differentiating themselves from competitors who don’t prioritize data protection.
Data Controller vs. Data Processor
The GDPR distinguishes between two roles that organizations may assume when processing data. It’s crucial for your organization to understand which role it plays, as the requirements for data controllers and data processors differ.
Data Controller:
The data controller is the person or organization responsible for collecting personal data and ensuring it is handled in compliance with GDPR. The data controller determines:
- The purpose of data processing.
- How personal data is processed.
- Who is allowed to process the data.
If an individual wishes to exercise their rights under GDPR, they must contact the data controller.
Data Processor:
A data processor is the person or organization that stores or processes personal data on behalf of a data controller. Unlike the data controller, the data processor does not decide the purpose of data processing.
When a data processor handles personal data on behalf of a data controller, certain obligations must be met. For example, there must be a formal, written contract—known as a data processing agreement—outlining the scope of data processing. The data processor must adhere to this agreement, but it is ultimately the data controller’s responsibility to ensure compliance with GDPR.
Different types of personally identifiable information
The GDPR categorizes personal data into two types: general and sensitive. It does not differentiate between a data subject’s private or professional role. Therefore, even in B2B situations, organizations must protect the personal data of the individuals they interact with.
General Personal Data:
General personal data (simply referred to as personal data in the legislation) includes any data that is not classified as sensitive. This can include identification information such as names, addresses, and emails, as well as financial, family, work, or home details.
Because personal data comes in many forms, it’s important for organizations to track all types of data they handle. Organizations should review all work processes through a GDPR lens to identify data flows. For example, a portrait photo of an employee on a website is considered personal data. Tacit consent to display the image is insufficient under GDPR requirements.
Sensitive personal data:
Sensitive personal data is explicitly defined in GDPR and requires explicit consent and specific authorizations for processing.
Sensitive personal data includes:
- Race or ethnic origin
- Political opinions
- Trade union membership
- Religious or philosophical beliefs
- Genetic data
- Biometric data for unique identification
- Information about a person’s sex life or sexual orientation
Processing sensitive personal data requires explicit authorization under GDPR, as there is no ambiguity in its definition.
What happens if your organization is not GDPR compliant?
Failure to comply with GDPR can result in severe consequences, including compensation claims and fines of up to 4% of your organization’s global turnover or 150 million DKK, whichever is higher.
Beyond financial penalties, non-compliance can damage your organization’s reputation and erode trust in its future data processing. This could lead to lost sales, customers, and suppliers, resulting in long-term consequences that may be difficult for an organization to recover from.
