GDPR is so complicated – why should I care?
It’s easy for small companies with a stack of to-dos to see the GDPR as a burden. But in reality, it’s something that can be used to your advantage, adding value to your business.
By proving to potential and existing customers that your organisation is compliant with new laws that protect the rights of citizens just like you (and your customers), you could bring in more business.
No one likes having their data lost, stolen, damaged, misused, or shared without proper consent, and doing everything you can to protect your customers and grow their trust could be a unique selling point.
So, from fines to compensation claims, there are certainly serious reasons to get GDPR-compliant. But on a real-world level, see it as being worth your while to get organised behind the scenes, earn your customers’ trust, and be the company that respects personal data, rather than letting it sit on a long-forgotten spreadsheet.
Does GDPR apply to my business?
It’s important to bear in mind that the GDPR applies to any business established in the EU and may apply to companies based outside of the EU that process the personal data of EU citizens in certain circumstances
So the first question you need to ask yourself is, how often does your business deal with personal data? This includes your customer data of course, but have you factored in supplier data? Past and present employees? And is there anything else you’ve collected, that doesn’t fall into any of these groups?
If you’re collecting any of this data routinely, you need to comply with the GDPR, whether the data is on a spreadsheet, on your computer network, your mobile phone, or in the cloud.
Another key question is whether your business currently falls under the DPA. If so, the ICO has confirmed that the GDPR applies to you, but remember, the GDPR is much stricter than the DPA.
I employ fewer than 250 people. What should I do?
Being a small business doesn’t mean you fall out of the GDPR scope. It’s recognised that small businesses have fewer resources and pose less of a risk to data protection, so there may be more leniency by the ICO in relation to any non-compliance.
However, you’ll still want to ensure you’re compliant with the principles of the GDPR. This is because your business must still comply if it’s involved in regular processing (which includes collecting, storing and using) of personal data. It’s easier to follow the GDPR and get compliant, than to spend time figuring out how you can avoid complying, especially if you’re working without legal guidance.
It’s also important to note that even if your company falls under one of the exemptions, if you’re contracting with a larger company that conducts large-scale processing you may also be subject to the harsher end of the GDPR’s regulation.
Aside from the law, responsible data handling is a basic principle of good business upkeep. If you’re a one-person band but aware that your records are a bit all over the place, have you thought about how you’d explain a breach to your trusted customers?
What data does the GDPR legislation apply to?
You’ll see a lot about ‘personal data’ when reading up on the GDPR. It’s now got a more detailed definition, and the regulation has clarified that things like an IP address (the unique string of numbers that identifies every Internet-communicating computer) count as personal data. There are lots of other things though that will fall into the personal data category, so make sure you’ve checked the GDPR itself (using the handy links at the end of this article).
Quick check: Focus on your lists. Does your business hold HR records, customer lists and contact detail records, for example? Most do.
This is confirmed by the ico.org.uk, who state; “You can assume that if you hold information that falls within the scope of the DPA, it will also fall within the scope of the GDPR”.
Manual vs. auto-filing
Whether it’s you keeping a spreadsheet of customer contact details, or an automated digital capture system, the GDPR will apply.
Is your data ‘sensitive’?
Article 9 in the GDPR defines ‘special categories of personal data’ and this includes personal data revealing racial or ethnic origin, political opinions, religious or philosophical beliefs, or trade union membership. They also cover genetic data, biometric data, data concerning health and data concerning a person’s sex life or sexual orientation. Generally, you’ll need explicit consent from individuals whose special category personal data you want to process, although Article 9 sets out a number of exceptions to this rule.
How is the GDPR law different from the DPA?
There are similarities between the GDPR and current Data Protection Act (DPA). However, crucial developments and rulings within the GDPR mean you’ll need to get clear on the new legislation, whether you’re up-to-date with the DPA or not.
The GDPR changes your accountability
One thing that really sets the GDPR apart is the changes made to the ‘accountability’ of data processors. This is a change from under the DPA, which placed more responsibility on the data controller (note, it’s still worth brushing up on your DPA compliance, as lots of its basic principles are pretty much repeated in the GDPR).
These are basic principles you’ll need to think about. Don’t get too hung up on whether you’re a controller or processor as both parties are required to make changes in order to comply with GDPR. At this stage, the key thing is to think about the personal data your small business collects, holds, uses, and shares, and how confident you are that the new principles hold true.
Am I a data controller or a data processor?
The GDPR applies to data ‘controllers’ and ‘processors’. In general, processing is defined as any operation performed on personal data, such as storing, collecting, recording, organising, sharing, erasure, consulting, etc. A controller is a data processor too, but they will also decide the purpose of the data processing activities.
For example, if you’re a small business offering a plumbing service and your customer details are managed using a contacts management app on your phone, hosted by a third party, this would generally make you the controller and the third party the processor. If on the other hand, you manage all of your data on a spreadsheet you’ve built yourself, you’re both controller and processor.
If you’re a data processor
For processors, the GDPR carries a specific set of legal obligations some of which require you to:
- keep up-to-date personal data records and details of your processing activities and categories, including details of your ‘data subject categories’ (customers, employees, suppliers, etc), the categories of processing carried out (transferring, hosting, altering, receiving, disclosing, etc)
- keep details of any transfers to countries outside the European Economic Area (EEA)
- implement appropriate security measures, which may include pseudonymisation and encryption, and prove you’re regularly testing these measures
- be ready with a general description of the technical and organisational security measures you keep in place
If responsible for a breach, you’ll definitely have more legal liability than under the DPA. If a data subject, maybe one of your customers, has suffered as a result of a data breach, they could make a claim against the data processor directly.
As a data processor, the severity of your penalty will reflect how serious the consequence of your failure to comply with your obligations placed on you by the GDPR or followed the instructions of your data controller. These obligations include ensuring sufficient security measures, and you’ll suffer further penalties (see ‘What are the GDPR penalties?’ further down) if you fail to report the breach within the given time frame (a maximum 72 hours).
As well as this, if you’re a data processor and have paid compensation that the controller is partly or fully responsible for, you may be entitled to claim back the relevant damages from the controller themselves if you have a contract in place that states this. This area of claims is where cyber or professional indemnity insurance can come in handy, although you’ll always need to match the policy to your activities.
If you’re a controller
All controllers are by nature also processors and therefore subject to the same basic requirements. As a controller, the GDPR places obligations on you and your business to ensure any contracts you have with processors are compliant. Take a look at the section for processors above – it may be worth checking that their security measures and processes are GDPR-compliant before signing or renewing any contract.
Are you inside the EU?
The GDPR applies to businesses established in the EU that process personal data of any EU citizens, so far regardless of developments with Brexit. It also applies to organisations outside the EU which offer goods or services inside the EU.
How can I check my suppliers are GDPR-compliant?
Working with GDPR-compliant suppliers and contractors will reduce the risk of being impacted by a data breach, and any consequent fines and claims.
You could ask suppliers and contractors to complete a form that confirms the security measures they have in place, or you could conduct an on-site visit. If their existing measures aren’t sufficient, you should review your relationship to ensure they are compliant with GDPR.
Where your suppliers (as processors) are processing personal data on your behalf (as a controller), you have an obligation to update your contracts with them to include a number of mandatory clauses that can be found in Article 28(3) of the GDPR. These ensure that processors are contractually obliged to provide GDPR-compliant data protection standards.
GDPR consent – how do I get consent from my customers to use their data?
It’s great that you’re thinking about this, as consent is a key concern tackled by the GDPR.
The ICO has a dedicated page on its website covering consent.
GDPR consent checklist and principles (at-a-glance):
- Check your consent practices and existing records. Refresh where necessary
- Offer individuals genuine choice and control
- Where using an opt-in, don’t rely on pre-ticked boxes or default options
- Explicit consent means a very clear, specific statement of consent
- Keep your consent requests separate from other terms and conditions
- Be specific, granular, clear and concise
- Name any third parties who will rely on the consent
- Make it easy for people to withdraw consent (and tell them how)
- Keep evidence of the consent (who, when, how and what you’ve told people)
- Avoid making consent a precondition of your business services
- Consent should put individuals in control, build trust and engagement and enhance your reputation
What are the GDPR penalties?
The GDPR toughens up penalties already existing under the DPA. These existing penalties include:
- Maximum fines of £500,000
- Prosecutions, including prison sentences for deliberate breaches
- Obligatory undertakings, where your company has to commit to specific action to improve compliance
With the introduction of GDPR, these penalties got heavier.
Businesses in breach are liable to a dramatic increase in fines, with penalties reaching an upper limit of €20 million or four per cent of annual global turnover, whichever is higher.
Insolvency will be a real risk for non-compliant businesses as a result of these fines. But bear in mind the possibility that individuals can also sue you if they suffer as a result of your data management. This could be for material damage or non-material suffering, such as distress.