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The General Data Protection Regulation (GDPR) (EU) 2016/679 is a regulation in EU law on data protection and privacy for all individuals within the European Union (EU) and the European Economic Area (EEA). It also addresses the export of personal data outside the EU and EEA. The GDPR aims primarily to give control to citizens and residents over their personal data and to simplify the regulatory environment for international business by unifying the regulation within the EU.
Superseding the Data Protection Directive 95/46/EC, the regulation contains provisions and requirements pertaining to the processing of personally identifiable information of individuals (formally called data subjects in the GDPR) inside the European Union, and applies to all enterprises, regardless of location, that are doing business with the European Economic Area. Business processes that handle personal data must be built with data protection by design and by default, meaning that personal data must be stored using pseudonymisation or full anonymisation, and use the highest-possible privacy settings by default, so that the data is not available publicly without explicit consent, and cannot be used to identify a subject without additional information stored separately. No personal data may be processed unless it is done under a lawful basis specified by the regulation, or if the data controller or processor has received explicit, opt-in consent from the data subject. The data subject has the right to revoke this permission at any time.
A processor of personal data must clearly disclose any data collection, declare the lawful basis and purpose for data processing, how long data is being retained, and if it is being shared with any third-parties or outside of the EU. Data subjects have the right to request a portable copy of the data collected by a processor in a common format, and the right to have their data erased under certain circumstances. Public authorities, and businesses whose core activities centre around regular or systematic processing of personal data, are required to employ a data protection officer (DPO), who is responsible for managing compliance with the GDPR. Businesses must report any data breaches within 72 hours if they have an adverse effect on user privacy.
It was adopted on 14 April 2016,and after a two-year transition period, became enforceable on 25 May 2018.Because the GDPR is a regulation, not a directive, it does not require national governments to pass any enabling legislation and is directly binding and applicable.With the United Kingdom scheduled to leave the European Union in 2019, the UK granted royal assent to the Data Protection Act 2018 on 23 May 2018, which contains equivalent regulations and protections.
The regulation applies if the data controller (an organisation that collects data from EU residents), or processor (an organisation that processes data on behalf of a data controller like cloud service providers), or the data subject (person) is based in the EU. Under certain circumstance the regulation also applies to organisations based outside the EU if they collect or process personal data of individuals located inside the EU. The regulation does not apply to the processing of data by a person for a "purely personal or household activity and thus with no connection to a professional or commercial activity." (Recital 18)
According to the European Commission, "personal data is any information relating to an individual, whether it relates to his or her private, professional or public life. It can be anything from a name, a home address, a photo, an email address, bank details, posts on social networking websites, medical information, or a computer's IP address."
The regulation does not purport to apply to the processing of personal data for national security activities or law enforcement of the EU; however, industry groups concerned about facing a potential conflict of laws have questioned whether Article 48 of the GDPR could be invoked to seek to prevent a data controller subject to a third country's laws from complying with a legal order from that country's law enforcement, judicial, or national security authorities to disclose to such authorities the personal data of an EU person, regardless of whether the data resides in or out of the EU. Article 48 states that any judgement of a court or tribunal and any decision of an administrative authority of a third country requiring a controller or processor to transfer or disclose personal data may not be recognised or enforceable in any manner unless based on an international agreement, like a mutual legal assistance treaty in force between the requesting third (non-EU) country and the EU or a member state. The data protection reform package also includes a separate Data Protection Directive for the police and criminal justice sector that provides rules on personal data exchanges at national, European, and international levels.
A single set of rules will apply to all EU member states. Each member state will establish an independent supervisory authority (SA) to hear and investigate complaints, sanction administrative offences, etc. SAs in each member state will co-operate with other SAs, providing mutual assistance and organising joint operations. If a business has multiple establishments in the EU, it will have a single SA as its "lead authority", based on the location of its "main establishment" where the main processing activities take place. The lead authority will act as a "one-stop shop" to supervise all the processing activities of that business throughout the EU (Articles 46–55 of the GDPR). A European Data Protection Board (EDPB) will co-ordinate the SAs. EDPB will replace the Article 29 Data Protection Working Party. There are exceptions for data processed in an employment context or in national security that still might be subject to individual country regulations (Articles 2(2)(a) and 88 of the GDPR).
Lawful basis for processing
Unless a data subject has provided explicit consent to data processing for one or more purposes, personal data may not be processed unless there is at least one legal basis to do so. They include:
- For the legitimate interests of a data controller or a third party, unless these interests are overridden by the Charter of Fundamental Rights (especially in the case of children).
- To perform a task in the public interest or in official authority.
- To comply with a data controller's legal obligations.
- To fulfill contractual obligations with a data subject.
- To perform tasks at the request of a data subject who is in the process of entering into a contract with a data controller.
- To protect the vital interests of a data subject or another person.
If consent is used as the lawful basis for processing, consent must have been explicit for data collected and each purpose data is used for (Article 7; defined in Article 4). Data controllers must be able to prove "consent" (opt-in) and consent may be withdrawn. Consent for children, defined in the regulation as being less than 16 years old (although with the option for member states to individually make it as low as 13 years old (Article 8(1))), must be given by the child's parent or custodian, and verifiable (Article 8).
Provision of a service to a data subject may not be contingent on consent to data processing that is not strictly necessary to use the service. (Article 7(4))
If consent was already provided under the Data Protection Directive for processing, a data controller does not have to obtain new/"refreshed" consent if the processing is documented and obtained in compliance with GDPR's requirements (Recital 171).
Responsibility and accountability
To be able to demonstrate compliance with the GDPR, the data controller must implement measures which meet the principles of data protection by design and by default. Data protection by design and by default (Article 25) require data protection measures to be designed into the development of business processes for products and services. Such measures include pseudonymising personal data, by the controller, as soon as possible (Recital 78). It is the responsibility and the liability of the data controller to implement effective measures and be able to demonstrate the compliance of processing activities even if the processing is carried out by a data processor on behalf of the controller (Recital 74).
When data is collected, data subjects must be clearly informed about the extent of data collection, the legal basis for processing of personal data, how long data is retained, if data is being transferred to a third-party and/or outside the EU, and disclosure of any automated decision-making that is made on a solely-algorithmic basis. Data subjects must be provided with contact details for the data controller and their designated Data Protection Officer, where applicable. Data subjects must also be informed of their privacy rights under GDPR, including their right to revoke consent to data processing at any time, their right to view their personal data and access an overview of how it is being processed, their right to obtain a portable copy of the stored data, the right to erasure of data under certain circumstances, the right to contest any automated decision-making that was made on a solely-algorithmic basis, and the right to file complaints with a Data Protection Authority
Data protection impact assessments (Article 35) have to be conducted when specific risks occur to the rights and freedoms of data subjects. Risk assessment and mitigation is required and prior approval of the data protection authorities is required for high risks.
Data protection by design and by default
Data protection by design and by default (Article 25) requires data protection to be designed into the development of business processes for products and services. Privacy settings must therefore be set at a high level by default, and technical and procedural measures should be taken by the controller to make sure that the processing, throughout the whole processing lifecycle, complies with the regulation. Controllers should also implement mechanisms to ensure that personal data is not processed unless necessary for each specific purpose.
A report by the European Union Agency for Network and Information Security elaborates on what needs to be done to achieve privacy and data protection by default. It specifies that encryption and decryption operations must be carried out locally, not by remote service, because both keys and data must remain in the power of the data owner if any privacy is to be achieved. The report specifies that outsourced data storage on remote clouds is practical and relatively safe if only the data owner, not the cloud service, holds the decryption keys.
The GDPR refers to pseudonymisation as a process that is required when data is stored (as an alternative to the other option of complete data anonymisation) to transform personal data in such a way that the resulting data cannot be attributed to a specific data subject without the use of additional information. An example is encryption, which renders the original data unintelligible and the process cannot be reversed without access to the correct decryption key. The GDPR requires for the additional information (such as the decryption key) to be kept separately from the pseudonymised data.
Another example of pseudonymisation is tokenisation, which is a non-mathematical approach to protecting data at rest that replaces sensitive data with non-sensitive substitutes, referred to as tokens. The tokens have no extrinsic or exploitable meaning or value. Tokenisation does not alter the type or length of data, which means it can be processed by legacy systems such as databases that may be sensitive to data length and type.
That requires much fewer computational resources to process and less storage space in databases than traditionally-encrypted data. That is achieved by keeping specific data fully or partially visible for processing and analytics while sensitive information is kept hidden.
Pseudonymisation is recommended to reduce the risks to the concerned data subjects and also to help controllers and processors to meet their data protection obligations (Recital 28).
Right of access
The right of access (Article 15) is a data subject right. It gives citizens the right to access their personal data and information about how this personal data is being processed. A data controller must provide, upon request, an overview of the categories of data that are being processed (Article 15(1)(b)) as well as a copy of the actual data (Article 15(3)). Furthermore, the data controller has to inform the data subject on details about the processing, such as the purposes of the processing (Article 15(1)(a)), with whom the data is shared (Article 15(1)(c)), and how it acquired the data (Article 15(1)(g)).
A data subject must be able to transfer personal data from one electronic processing system to and into another, without being prevented from doing so by the data controller. Data that has been sufficiently anonymised is excluded, but data that has been only de-identified but remains possible to link to the individual in question, such as by providing the relevant identifier, is not. Both data being 'provided' by the data subject and data being 'observed', such as about behaviour, are included. In addition, the data must be provided by the controller in a structured and commonly used standard electronic format. The right to data portability is provided by Article 20 of the GDPR. Legal experts see in the final version of this measure a "new right" created that "reaches beyond the scope of data portability between two controllers as stipulated in [Article 20]".
Right to erasure
A right to be forgotten was replaced by a more limited right of erasure in the version of the GDPR that was adopted by the European Parliament in March 2014. Article 17 provides that the data subject has the right to request erasure of personal data related to them on any one of a number of grounds, including noncompliance with Article 6(1) (lawfulness) that includes a case (f) if the legitimate interests of the controller is overridden by the interests or fundamental rights and freedoms of the data subject, which require protection of personal data.
Records of processing activities
Records of processing activities must be maintained that include purposes of the processing, categories involved and envisaged time limits. The records must be made available to the supervisory authority on request (Article 30).
Data protection officer
See also: European Commission Data Protection Officer
If the processing is carried out by a public authority, except for courts or independent judicial authorities when acting in their judicial capacity or if, in the private sector, processing is carried out by a controller whose core activities consist of processing operations that require regular and systematic monitoring of the data subjects, or processing on a large scale of special categories of data pursuant to Article 9 and personal data relating to criminal convictions and offences referred to in Article 10, a person with expert knowledge of data protection law and practices should assist the controller or processor to monitor internal compliance with this regulation.
The DPO is similar to a compliance officer and is also expected to be proficient at managing IT processes, data security (including dealing with cyberattacks) and other critical business continuity issues around the holding and processing of personal and sensitive data. The skill set required stretches beyond understanding legal compliance with data protection laws and regulations. More details on the function and the role of data protection officer were given on 13 December 2016 (revised 5 April 2017) in a guideline document.
Under Article 27, organisations based outside the EU must also appoint an EU-based person as a representative and point of contact for their GDPR obligations. This is a separate and distinct requirement from a DPO, although there is overlap in responsibilities that suggest that this role can also be held by the designated DPO. Article 27 does not apply if the business is only involved in "occasional" processing of personal data, is not performing large-scale processing of data relating to criminal convictions or special categories, and the processing is "unlikely to result in a risk to the rights and freedoms of natural persons".
Under the GDPR, the data controller is under a legal obligation to notify the supervisory authority without undue delay unless the breach is unlikely to result in a risk to the rights and freedoms of the individuals. There is a maximum of 72 hours after becoming aware of the data breach to make the report (Article 33). Individuals have to be notified if adverse impact is determined (Article 34). In addition, the data processor will have to notify the controller without undue delay after becoming aware of a personal data breach (Article 33).
However, the notice to data subjects is not required if the data controller has implemented appropriate technical and organisational protection measures that render the personal data unintelligible to any person who is not authorised to access it, such as encryption (Article 34).
The following sanctions can be imposed:
- a warning in writing in cases of first and non-intentional noncompliance
- regular periodic data protection audits
- a fine up to €10 million or up to 2% of the annual worldwide turnover of the preceding financial year in case of an enterprise, whichever is greater, if there has been an infringement of the following provisions: (Article 83, Paragraph 5 & 6)
- the obligations of the controller and the processor pursuant to Articles 8, 11, 25 to 39, and 42 and 43
- the obligations of the certification body pursuant to Articles 42 and 43
- the obligations of the monitoring body pursuant to Article 41(4)
- a fine up to €20 million or up to 4% of the annual worldwide turnover of the preceding financial year in case of an enterprise, whichever is greater, if there has been an infringement of the following provisions: (Article 83, Paragraph 4)
- the basic principles for processing, including conditions for consent, pursuant to Articles 5, 6, 7, and 9
- the data subjects' rights pursuant to Articles 12 to 22
- the transfers of personal data to a recipient in a third country or an international organisation pursuant to Articles 44 to 49
- any obligations pursuant to member state law adopted under Chapter IX
- noncompliance with an order or a temporary or definitive limitation on processing or the suspension of data flows by the supervisory authority pursuant to Article 58(2) or failure to provide access in violation of Article 58(1)
Within GDPR there is a distinct difference between business to consumer (B2C) and B2B (business to business) marketing. Under GDPR there are six grounds to process personal data, these are equally valid. There are two of these which are relevant to direct B2B marketing, they are consent or legitimate interest. Recital 47 of the GDPR states that “The processing of personal data for direct marketing purposes may be regarded as carried out for a legitimate interest.”
Using legitimate interest as the basis for B2B marketing involves ensuring key conditions are met:
- “The processing must relate to the legitimate interests of your business or a specified third party, providing that the interests or fundamental rights of the data subject do not override the business’ legitimate interest."
- "The processing must be necessary to achieve the legitimate interests of the organisation.”
Additionally, Article 6.1(f) of the GDPR states that the processing is lawful if it is: “Necessary for the purposes of the legitimate interests pursued by the controller or by a third-party, except where such interests are overridden by the interests or fundamental rights and freedoms of the individual which require protection of personal information, in particular where the individual is a child”.
The EU Commission stated that, “Unified data privacy laws will create extraordinary opportunities and motivating innovation for businesses not only within Europe but also for the organization who are willing to do business with European states or already running their business in European states.” The commission aims for companies to maintain communications and build regulation supporting relationships with each other to ensure best data practices through legitimate balance checks