On May 25, 2018, a major rules change that impacts millions of businesses took effect. The European Union’s General Data Protection Regulation (GDPR) is the most significant change to European data security standards in two decades.
While the regulation has a direct impact on enterprises located or doing business directly in EU countries, it can also apply to U.S.-based businesses. GDPR gives consumers more control over how companies use their personal data. In particular, European consumers now have the right to:
- Be informed about when companies are collecting their information.
- Access the information companies possess about them, via a “subject access request.” Companies must provide the requested information within one month and correct any inaccuracies.
- Have their information erased (this is known as “the right to be forgotten”).
- Ask for restrictions on the use of their data.
- Move or copy their data from one source to another (this is known as “data portability”).
- Object to how companies use their data, including for direct marketing and when companies make automated assumptions about what an individual might want to buy.
Companies outside the EU are subject to GDPR if they collect personal data or behavioral information on individuals located in an EU country, even if no financial transaction takes place. A simple survey can trigger compliance requirements. Any businesses with websites that target-market to international customers may also have to comply.
A business is bound by the requirements if it specifically targets consumers in an EU country. For example, if the web pages use the particular country’s language and refer to users and customers in that or other EU countries, the EU regulators would consider that target marketing. Target marketing does not include a web page written in English that makes no such references, but that a European consumer could possibly access.
Any company selling goods and services via the Internet, and that targets EU customers, may have to comply. If your company fits the bill, you should:
- Obtain clear and explicit customer consent for collection and use of their data for each type of processing done on the data. For example, one permission is required for sending e-mail marketing messages, another for sharing with third parties, and others for additional types of processing.
- Protect collected customer data. The protection requirements are similar to standards in place in the U.S.
- Notify the EU or other supervising authority within 72 hours of some data breaches. A breach must be reported if it involves “accidental or unlawful destruction, loss, alteration, unauthorized disclosure of, or access to, personal data transmitted, stored or otherwise processed” that can cause “risk to the rights and freedoms” of EU customers.
- Notify the individuals within the EU when a breach presents a “high risk” to basic property and privacy rights, such as when account passwords are compromised
The EU can fine a company 2% of its global revenue for failing to report a breach on time. Other penalties can be up to the larger of 4% of revenue or €20 million (about $24.4 million.)
Prioritize your compliance efforts
Experts advise companies that are just starting their compliance efforts to identify the most important thing they need to do, and tackle that first. Lesser priorities follow from that.
As Chris Combemale of the Direct Marketing Association said, compliance is an ongoing process: “GDPR is a way of thinking about your customer, a way of thinking about your business that is permanent and long term.”
Related Posts
Even Small, Mid-sized Firms Need a Crisis Management Plan
With risks to companies and employees growing, sometimes the unthinkable happens and a business has a real crisis on its hands. While large companies are usually well-prepared for a crisis should one occur, most small and mid-sized firms don’t have the resources or have not put much thought into how they would handle a crisis. […]Use Technology to Prevent Losses and Manage Your Risk
Businesses are discovering that smartphones and tablet computers, besides being distractions for their employees, can also help them better manage their risks. An increasing number of applications for these devices – matched with other technologies – can help businesses prevent losses, reduce the chances of workplace accidents and manage their risks. Mobile devices can now […]Conducting Legal Background Checks
With the number of harassment, discrimination and other employee lawsuits growing, besides examining their internal policies, employers need to be careful about who they hire. Apart from calling previous employers and schools and checking for any lawsuits with the courts, many businesses will also consider using a vendor to do a background check and to […]
Just the mention of a workers’ compensation audit can stir up the butterflies in your stomach and add a serious dose of stress to your existence. But, if you are scheduled for an audit, there is no need to dread it. A small amount of preparation and common sense can save you a lot of […]Do You Need Workers’ Comp Coverage for Family Members?
One question we get often from small business owners is whether they have to secure workers’ comp coverage for family members that work for them. The short answer is “yes,” in most cases. Under California law, every employer in the state that uses employee labor, including family members, must secure workers’ comp coverage, as per […]
Leave a Reply