On 25 May 2018—a mere 5 months from now—one of the most important corporate compliance events in recent memory will take place. On “G-Day,” the General Data Protection Regulation (“GDPR,” or the “Regulation”) will replace the 22-year-old Data Protection Directive (DPD). The Regulation will substantially increase the statutory obligations regarding the processing1 of personal data2 placed on controllers3 and processors4 both inside and outside the EU. The GDPR’s demanding substantive obligations will be matched by its severe maximum fines: €20,000,000 or four percent of total worldwide annual turnover (whichever is greater).
With “G-Day” looming, the time to develop GDPR-compliance strategies is now. This client note highlights five key differences between the DPD and the coming Regulation that companies may wish to consider in preparing their GDPR-readiness plans.
1. Broader Territorial Application
The DPD applies to data controllers established in the EU, or who make use of EU-situated equipment for personal data processing. The GDPR in contrast is potentially global in scope: It applies both to controllers and processors in the EU, as well as to non-EU established controllers and processors who monitor behavior or offer goods or services inside the Union. Non-EU organizations within the GDPR’s jurisdiction are obligated in most cases to designate a representative in the Union as a point of contact for data subjects and supervisory authorities.5
- If your organization does business in the EU, you should familiarize yourself with the GDPR, as you may be subject to its obligations and exposed to its penalties.
2. Processor Obligations
The DPD applies directly only to controllers.6 The GDPR lays down statutory obligations on processors as well. Processors under the GDPR will, for example, have to obey rules as to international data transfers, the appointment of Data Protection Officers (DPOs) and the implementation of data security measures. Processors will also have certain record keeping and data breach reporting obligations.
- Processors too will have statutory obligations under the new Regulation and so must familiarize themselves with the GDPR.
The GDPR, like the DPD, recognizes data subject consent as a lawful basis for processing.7 The GDPR, however, restricts significantly what behavior can constitute consent. For example, under the GDPR, in addition to being freely given, specific and informed, consent will need to be indicated by a statement or by a clear affirmative action.
The requirement that consent be indicated by a statement or clear affirmative action means that opt-out modalities for securing consent, for example pre-ticked boxes on your website, must be replaced with opt-in mechanisms.
- Controllers must update any methods of securing consent that are not based on a statement or clear affirmative action.
4. Data Protection Officers (DPOs)
New to the GDPR is the requirement to appoint a DPO under certain circumstances. A DPO is the officer within an organization tasked with monitoring compliance with the GDPR, informing, advising and training the organization and its staff in this regard and liaising with the Supervisory Authority. Private sector controllers and processors required to appoint a DPO if their core activities involve:
(i) Monitoring data subjects on a large scale; or
(ii) Processing special categories8 of data (i.e., sensitive data) or criminal records data on a large scale.
Even if not obligated to appoint a DPO, companies may consider voluntarily doing so, as a DPO can effectively facilitate GDPR compliance.
- Controllers and processors must determine whether they are statutorily required to appoint a DPO. Even if not required to, they should also consider whether the voluntarily appointment of a DPO will provide value-added.
5. New Data Subject Rights
Likewise new to the GDPR is the right of erasure (also known as the “right to be forgotten.”) Under certain conditions, controllers are required to erase personal data upon request and without undue delay. Where the controller has made that personal data public, the controller must also inform other controllers processing the data that the subject has requested erasure.
Another GDPR innovation is the right of data portability. Under the GDPR, data subjects will have the right, under certain circumstances, to receive their personal data from controllers in a structured, commonly used and machine-readable format. The right of data portability is meant to prevent consumer “lock in.” For example, a data subject can exercise this right to import playlist information easily from one streaming music service to a competing service.
- Controllers must honor the right to be forgotten where the requisite conditions are fulfilled.
- Controllers must provide data subjects their data in an easily portable format in certain circumstances.
The above provides just a brief introduction to the far-reaching changes laid down by the GDPR, and there is of course much more to GDPR compliance than could be captured in this client note. The Dentons data privacy team is available to answer any GDPR compliance questions you may have, and to assist you or your business with any data privacy concerns.