Last reviewed 2 August 2017
The General Data Protection Regulation (GDPR) is due to be implemented in the EU in 2018. What is the new regulation, how will it be applied and what does it mean for UK businesses?
Martin Hodgson, a business writer on data management, explains.
What is the GDPR?
Approved by the European Parliament in April 2016, the GDPR has been designed to harmonise data privacy laws across Europe, to protect the data privacy of EU citizens, and to reshape the way organisations across the EU approach data privacy.
The GDPR replaces the Data Protection Directive 95/46/EC which was enacted in the UK through the Data Protection Act 1998, the DPA. It comes into force in all EU Member States on the 25 May 2018. After this date non-compliant organisations may face heavy fines.
Why was the GDPR developed?
The GDPR was developed to reflect the considerable changes in the way that organisations and individuals use data since the original 1995 directive. The world is now much more data-driven and protection for privacy has never been more important.
As with the DPA, the GDPR applies to “data controllers” and “data processors” — the former controlling how and why personal data is processed, and the later doing the processing.
While much of the GDPR is similar to the DPA, there are important changes.
Increased Territorial Scope
In a key change to existing rules, the new GDPR will apply to all companies and organisations processing the personal data of data subjects residing in the EU, regardless of the company’s location. Thus the regulations not only apply to organisations located within the EU but also to those located outside of the EU if they offer goods or services to, or monitor the behaviour of, EU data subjects.
Notification of Breaches
The GDPR requires local data protection authorities to be notified of a data breach within 72 hours of discovery. Data processors must also notify their controllers “without undue delay” after first becoming aware of a data breach.
Expanded Rights of Access
According to the GDPR people will have expanded rights to obtain from a data controller confirmation as to whether or not personal data concerning them is being processed, where and for what purpose. Data controllers must provide a copy of the personal data, free of charge, in an electronic format.
Personal Data Redefined
As with the DPA, any information related to a person, or data subject that can be used to directly or indirectly identify the person is regarded under the GDPR as personal data. However, the definition is broader than that in the DPA and can include names, photographs, email addresses, bank details, posts on social networking websites, medical information, or computer IP addresses. Even “pseudonymised” data may fall within the scope depending on how difficult it is to attribute to a particular individual.
The Information Commissioner’s Office (ICO), states that for most small businesses who keep staff records, customer lists, or contact details, etc, the wider definition should make little practical difference. They advise organisations to assume that if they hold information that falls within the scope of the current DPA, it will also fall within the scope of the GDPR.
The GDPR refers to sensitive personal data as “special categories of personal data” — this can include genetic and biometric data where it is processed to uniquely identify an individual.
Strengthened Consent Conditions
Under the GDPR any request for consent must be made in an easily accessible form, with the purpose for data processing attached. Consent must be clear and distinguishable from other matters, separate from other terms and conditions, and must use plain language. It must be as easy to withdraw consent as it is to give it.
It will be against the rules to use long illegible terms and conditions full of legal terms. Consent cannot be inferred from silence, pre-ticked boxes or inactivity.
For non-sensitive data, “unambiguous” consent as described above will suffice. However, for processing sensitive personal data explicit consent will be required which will usually involve an “opt-in” request.
Parental consent will be required to process the personal data of children under the age of 16 for online services. However, Member States may legislate for a lower age of consent if they wish.
New “Right to be Forgotten”
Article 17 involves the “right to be forgotten” — also known as Data Erasure. It entitles a data subject to request that a data controller should erase their personal data, cease further dissemination of the data, and potentially have third parties halt processing of the data.
Conditions for erasure include data subjects withdrawing consent or data no longer being relevant to the original purposes for processing.
Data controllers have a duty to compare the subjects right to be forgotten with “the public interest in the availability of the data” when considering such requests.
GDPR introduces data portability — the right for a data subject to receive the personal data concerning them, which they have previously provided to another controller.
Privacy by Design
Privacy by design is a key concept in the GDPR. It calls for data protection to be a core element in the design of new systems, applying right from the start rather than being a later addition. Controllers are required under GDPR to implement appropriate technical and organisational measures in an “effective way” and to have adequate systems, contractual provisions and training in place.
The concept of data minimisation in Article 23 calls for controllers to hold and process only the data absolutely necessary for the completion of their duties as well as limiting access to personal data to those needing to act out the processing.
Data Protection Agencies
Under current rules data controllers are required to notify their data processing activities with local Data Protection Agencies. However, under the GDPR it will not be necessary to submit notifications or registrations to each local DPA of data processing activities. Instead, there will be internal record keeping requirements.
The EU states that appointment of a Data Protection Officer under the GDPR will be mandatory only for those controllers and processors whose core activities consist of processing operations which require regular and systematic monitoring of data subjects on a large scale or of special categories of data.
A new tiered approach to fines will apply. Under the GDPR organisations can be fined a maximum of 4% of their annual global turnover or £20 million (whichever is greater) for serious breaches of the rules, such as not having customer consent to process data or violating the core privacy by design concept.
The rules apply to both controllers and processors of data which means that “cloud” service will not be exempt from GDPR enforcement.
The Government has confirmed that the UK’s decision to leave the EU will not affect the commencement of the GDPR.
No matter what happens in the Brexit negotiations, organisations that process data about individuals in the context of selling goods or services to citizens in other EU countries will need to comply with the GDPR. UK businesses that want to seek continued access to the EU digital market will need to take GDPR under consideration.
Where activities are limited to the UK only then the position is less clear. However, all countries are agreed about the need to strengthen privacy and data laws and the UK Government has indicated it will implement an equivalent legal mechanism on leaving the EU. Any such legislation is highly likely to follow the GDPR which has been supported in its development by the Government and by the ICO.
The ICO states that, with so many businesses and services operating across borders, international consistency around data protection laws and rights is crucial both to businesses and organisations, and to individuals.
Further guidance will follow before the May implementation date.
The ICO website is a good source of further information. The ICO has warned UK businesses to get prepared and has produced toolkit for small businesses and a 12 Steps to Take Now document to help them ensure they are ready.
Official documents and news can be found on the GDPR portal.