In the past few years, technology has become an indispensable part of people’s lives. From individuals to businesses and government agencies, everybody is reliant on technology and the data that generates using it.
Governments across borders are concerned with the way businesses, especially retail merchants, operate today and also the way they consume and share data with their users or counterparts. For this reason, they are now keen on regulating the way online businesses leverage and process user or customer data. More specifically, governments in the US and Europe are struggling to secure personal data that individual customers provide to businesses and organizations around the world.
If you are seeking to mint a new business or already own one, you must ensure that your online business is compliant with GDPR (General Data Protection Regulation). The General Data Protection Regulation is quite stringent. It necessitates every business to have the consent to collate any data from EU citizens who visit their online business website or store, news/e-Commerce portal, or even a personal blog.
What is GDPR?
GDPR is a recent European Union (EU) regulation aimed to tighten control over the way businesses manage the personal data of its residents. This regulation came into effect from May 25, 2018. And as a result, plenty of non-GDPR compliant companies faced hefty penalties and fines.
EU’s new GDPR regulates data protection law throughout all EU member states. The bill has a profound impact on online businesses that provide products and services to EU citizens, irrespective of their geographical location. Most fundamentally, it has transformed the process of collecting, storing, and leveraging the resident’s data, which alarms the software products with an immediate need to comply with the GDPR.
How GDPR Replace THE DPD
GDPR is deemed to replace the Data Protection Directive (DPD) that dates back to 1995. Unlike the European Union’s new GDPR, the Data Protection Directive is not an obligatory law. Every member state was required to implement the rules of DPD in its legislation. Also, the penalties for violating the regulation were affirmed locally and were vulnerable to significant damage.
In the meantime, the digital business world has experienced some significant global changes owning to over two decades of DPD’s existence. While data became ubiquitous, there was not even a single unifying law to regulate data protection challenges uniformly and predictably so far.
The new GDPR is adaptable enough to be globally implementable and is directly binding. However, it does not need any enabling legislation approved by the governments. And in striking contrast to healthcare-centric HIPAA, it goes way beyond to cover just one specific sector. The penalties obligated on a violation can be as high as 20 million euros or 4 percent of the total global revenue, whichever is higher.
Quick Facts About GDPR
- GDPR is one of the most inclusive acts about customer’s data privacy and combines a plethora of existing EU data regulations. The non-GDPR compliant businesses have a penalty for 4 percent of their yearly revenue or 20 million euros, whichever is higher.
- Businesses based in the EU must ensure whether their organization is compliant with all GDPR laws. GDPR impacts all companies that offer online services or collate personal data of EU residents. As an owner of a taxi booking software or any application that collects information of its users, you are most likely to be subject to the new GDPR.
- Attaining GDPR compliance mandates cross-functional alliance. To abide by all GDPR, the organizations across the European Union need to explore ways to collect, store, and use personal data of their customers. Most importantly, it necessitates collaboration among the organizational employees from across the departments, like human resources, marketing, IT, and accounting, among others.
- GDPR has almost, in a way, forced companies to change their processes when working with personal data. The methods deployed for securing data have become more stringent, and business stakeholders are required to review their existing data protection policies to comply with GDPR.
Fundamental Principles of GDPR
One of the fundamental principles of GDPR is “Data Minimization,” which refers to the practice of limiting the collection of personally identifiable information. It requires companies to change their infrastructure and the way they collect, store, and delete personal data.
Organizations have the responsibility of reviewing and auditing all third-party companies who may have access to personal data. It’s required to ensure that companies who have access to personal data are GDPR compliant. Two other fundamental principles of GDPR are “reporting of data leaks” within 72 hours and the right of EU citizens “to be forgotten,”.
It means any customer can ask the organization to delete all their personally identifiable information or PII. It requires organizations to setup notification systems for data breach and improves their speed when it comes to responding to GDPR related inquiries.
The set of rules and regulations by GDPR increases the responsibility of organizations in protecting personal data. It forces them to alter their processes to make data protection one of the critical aspects of their software. It also gives more power to customers by way of the “right to forgotten” rule.
Some Essential Things to Consider When Developing a GDPR Compliant Software
- Protecting personally identifiable information (PII) should be one of the fundamental principles of the software. Assure a user of your software the maximum privacy of PII without any additional action from the user.
- The user should know of the data being collected, stored, and processes in the software. Communicate it via a separate document on your software that details the use of data, how employees have access to it, and the various access levels for data.
- Design the software in a way that minimal data is collected. It should obtain only the information necessary for running the business or software. Efforts should be made to minimize the identification of personal data in the software. It will ensure the protection of private identifiable information in case of a data breach or leakage.
- Also, incorporate a permanent delete function for deleting all user data if a user requests it.
Let us know your thoughts on GDPR rules and regulations in the comment section below. We’d love to hear and discuss your ideas on this crucial data privacy regulation.