Avoiding GDPR Penalties: What Businesses Need to Do to Stay Compliant

The General Data Protection Regulation (GDPR) imposed strict new data protection and privacy rules for businesses operating in the EU when it went into effect on May 25, 2018. Under GDPR, regulatory fines for severe noncompliance are substantial, with penalties reaching up to €20 million or 4% of global annual revenue, whichever is higher. For less severe infringements, smaller fines of up to €10 million or 2% of global revenue can be levied.

With such severe consequences, businesses need to make compliance with GDPR a top priority. Here are the key actions businesses should take to avoid costly penalties under the new regulation:

Conduct a Data Audit and Gap Analysis

The first step towards GDPR compliance is understanding what personal data your business collects, processes, stores and uses. Conduct a full audit to map out all data flows and third-party processors. Identify any gaps between current practices and GDPR requirements to address ahead of enforcement.

Adopting a comprehensive GDPR auditing framework provides businesses with a structured approach to identify compliance gaps. Mapping data flows, evaluating policies, assessing risks, and instituting controls through a GDPR audit methodology facilitates compliance and reduces the risk of penalties for non-conformity. A robust framework is key to GDPR readiness.

Review and Update Data Protection Policies

Businesses must have comprehensive data protection policies and procedures in place that align with GDPR’s expanded requirements around consent, data subjects’ rights, breach notification and more. Review existing policies and update or implement new ones as needed to ensure full compliance.

Obtain Informed Consent

GDPR raises standards for consent, requiring it to be unambiguous, specific, freely given and able to be withdrawn. Review consent mechanisms to obtain explicit, affirmative consent for data collection and processing. Consent requests must be clear, concise and separate from other terms and conditions.

Facilitate Data Subject Rights

GDPR grants expanded rights to individuals over their data, including rights of access, rectification, erasure, restriction, data portability and objection. Businesses must have procedures that allow data subjects to exercise these rights fully and easily. Build user-friendly mechanisms for requests.

Minimize and Protect Data

Businesses should implement the principles of data minimization and protection into operations. Only collect, process and store the minimum data needed for specific purposes and delete when no longer needed. Have safeguards like encryption to protect data from unauthorized access, disclosure or loss.

Report Breaches Quickly

GDPR requires data breaches to be reported to authorities within 72 hours of first awareness. Failure to notify on time can result in fines. Have robust breach detection, investigation and internal reporting procedures to ensure you meet the 72-hour window.

Assign a DPO If Required

Under GDPR, businesses whose core activities involve large-scale processing of sensitive data must appoint a data protection officer (DPO). Make sure to designate a DPO if required and provide adequate resources and authority.

By taking proactive steps to embed GDPR requirements into data policies, practices and systems, businesses can avoid penalties and ensure compliance with the far-reaching new EU data protection law. Leveraging guidance from legal counsel, technology solutions and training will help strengthen GDPR readiness.