European Markets are renowned for the privacy protection law known as GDPR implemented to protect the personal information of their residents. General Data Protection Regulation (GDPR) is mandatory for businesses that wish to penetrate the European Markets.
Even though GDPR’s jurisdiction lies in the European countries, the effects are felt worldwide. All cloud-hosted companies must comply with GDPR, regardless of their geographical base, if they want to conduct business with European residents.
What is GDPR?
GDPR is a regulation to protect the personal data of all EU residents. It was passed by the European Parliament in April 2016 and came into effect on 25 May 2018. The GDPR is a replacement for Data Protection Directive 95/46/EC and was developed to protect and empower all EU residents’ data privacy, harmonize data privacy laws across Europe, and reshape the approach to data privacy across organizations.
Why should businesses comply with GDPR?
The regulation introduced significant changes for companies operating in Europe, no matter where they are based. These changes include stricter rules on consent, more stringent rules on handling personal and sensitive data, and tighter service levels for responding to cyber-incidents.
GDPR levies penalty in case of non-compliance by corporations or individuals. For GDPR compliance, there are two tiers. Lighter offenses may incur a fine of €10 million or 2% of your company’s annual revenue, whichever is higher. Severe infringements can attract a fine of €20 million or 4% of a company’s annual revenue from the preceding fiscal year, whatever is greater. GDPR compliance is targeted to improve data protection mechanisms at cloud-hosted companies conducting business in the EU or with EU residents. Hence, it offers better data protection and privacy for customers, employees, and third parties in the EU.
How to become GDPR compliant?
1. Start with the prep work
Start with preparing for the GDPR obligations. Involve appropriate and cross-functional stakeholders from across the company in the project. Conduct gap assessment to identify which areas need to be fixed before proceeding with the GDPR certification.
2. Prepare a data policy
Develop a clear and easy-to-understand data policy that describes legal reasons for data acquisition, processing, transfer, and retention processes across different data categories. Each data category will need to be addressed differently in each of these cases. The data subject must know why you want their data, how you will get it, what it will be used for, and how long will it be stored.
3. Appoint a DPO
As per GDPR, any company with more than ten employees which processes user data has to appoint a Data Protection Officer (DPO). Either the company names an internal employee as an internal Data Protection Officer or appoints an external Data Protection Officer.
If an internal DPO is appointed, the company needs to ensure that the internal DPO does not have a conflict of interest due to his/her work in IT, HR, or any senior management. Both internal and external DPO must provide expert professional guidance in IT security and data protection, the scope of which depends on the complexity of data processing and the size of the company.
This person will be working independently and responsible for ensuring the organization’s adherence to GDPR. DPO will ensure that every point on the GDPR checklist is met, which leads us to our next point.
4. Create a checklist
Create a comprehensive activity checklist to check any vulnerabilities you may have in the data acquisition, processing, sharing, and/or retention processes. You will need to also explain the legal basis for each of these processing activities. You must create a Data Flow Map to identify vulnerabilities and risks. A data flow map and gap analysis will allow you to comply with Article 30 of the GDPR by keeping a record of all the data processing activities.
5. Define the process to address data subject rights
You will need cookie consent from your users before you store or process it. The request should be presented to the users concisely and simply, seeking permission to store user data and providing information on how long you intend to hold the data.
Data subjects should also be able to withdraw their consent whenever possible. This should also be addressed to the data subjects in an easy-to-understand language without gibberish.
6. Data protection impact assessment
Before starting any new project which requires user data acquisition, retention, processing, and storage, a Data Protection Impact Assessment (DPIA) must be conducted by the DPO. Through DPIA, he/she will assess the company’s data processes and how they may impact user data privacy.
7. Secure data transfer with third-party entities
All third-party entities, partners, and vendors alike need to be GDPR compliant as well. A good way to enforce this and bring this into practice is to make this a part of vendor onboarding and contractual obligations.
Even if the data is being transferred out of the EU, it still needs to be done in a GDPR-compliant manner. Remember, GDPR applies to the data of EU data subjects and is not bound by the immediate location of the data.
8. Data breach contingencies
The GDPR requires that data breaches are reported to the local data protection authorities within 72 hours of discovery. So you should have processes for detecting and responding to any data breaches and notifying the relevant supervisory authority.
Fast and consistent GDPR compliance with Scrut
You may already be complying with some of the GDPR guidelines. But you will never know unless you take the initiative and conduct your GDPR readiness assessment and start ticking the checkboxes on the GDPR compliance checklist. GDPR is essential to building customer trust and engagement with your organization.
Scrut Automation is a smart and radically simple governance, risk, and compliance automation platform for growing startups and mid-market enterprises. With Scrut, compliance teams can reduce ~70% of their manual effort in continuously maintaining compliance towards SOC 2, ISO 27001, GDPR, PCI DSS, HIPAA, and CCPA. Schedule your demo today to see how it works.