General Data Protection Regulation
The General Data Protection Regulation (EU) 2016/679 ("GDPR") 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 areas. The GDPR aims primarily to give control to individuals 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 personal data of individuals (formally called data subjects in the GDPR) inside the EEA, and applies to an enterprise established in the EEA or—regardless of its location and the data subjects' citizenship—that is processing the personal information of data subjects inside the EEA.
|European Union regulation|
|Title||Regulation on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (Data Protection Directive)|
|Made by||European Parliament and Council of the European Union|
|Journal reference||L119, 4 May 2016, p. 1–88|
|Date made||14 April 2016|
|Implementation date||25 May 2018|
|Commission proposal||COM/2012/010 final – 2012/0010 (COD)|
|Replaces||Data Protection Directive|
Controllers of personal data must put in place appropriate technical and organisational measures to implement the data protection principles. Business processes that handle personal data must be designed and built with consideration of the principles and provide safeguards to protect data (for example, using pseudonymization or full anonymization where appropriate), and use the highest-possible privacy settings by default, so that the data is not available publicly without explicit, informed 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 unless the data controller or processor has received an unambiguous and individualized affirmation of consent from the data subject. The data subject has the right to revoke this consent at any time.
A processor of personal data must clearly disclose any data collection, declare the lawful basis and purpose for data processing, and state how long data is being retained and if it is being shared with any third parties or outside of the EEA. 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. In some cases, violators of the GDPR may be fined 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.
The GDPR was adopted on 14 April 2016, and became enforceable beginning 25 May 2018. As the GDPR is a regulation, not a directive, it is directly binding and applicable.
The GDPR consists of 99 articles, grouped into 11 chapters, and an additional 171 recitals with explanatory remarks. The chapters' headings are:
- I – General provisions
- II – Principles
- III – Rights of the data subject
- IV – Controller and processor
- V – Transfers of personal data to third countries or international organisations
- VI – Independent supervisory authorities
- VII – Cooperation and consistency
- VIII – Remedies, liability and penalties
- IX – Provisions relating to specific processing situations
- X – Delegated acts and implementing acts
- XI – Final provisions
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 circumstances, 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 precise definitions of terms such as "personal data", "processing", "data subject", "controller" and "processor", are stated in Article 4 of the Regulation.
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 processingEdit
Unless a data subject has provided informed 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. According to Article 6, the lawful purposes are:
- (a) If the data subject has given consent to the processing of his or her personal data;
- (b) To fulfill contractual obligations with a data subject, or for tasks at the request of a data subject who is in the process of entering into a contract;
- (c) To comply with a data controller's legal obligations;
- (d) To protect the vital interests of a data subject or another individual;
- (e) To perform a task in the public interest or in official authority;
- (f) For the legitimate interests of a data controller or a third party, unless these interests are overridden by interests of the data subject or her or his rights according to the Charter of Fundamental Rights (especially in the case of children).
If informed 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). Consent must be a specific, freely-given, plainly-worded, and unambiguous affirmation given by the data subject; an online form which has consent options structured as an opt-out selected by default is a violation of the GDPR, as the consent is not unambiguously affirmed by the user. In addition, multiple types of processing may not be "bundled" together into a single affirmation prompt, as this is not specific to each use of data, and the individual permissions are not freely-given. (Recital 32)
Data subjects must be allowed to withdraw this consent at any time, and the process of doing so must not be harder than it was to opt in. (Article 7(3)) A data controller may not refuse service to users who decline consent to processing that is not strictly necessary in order to use the service. (Article 7(4)) 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).
If consent to processing was already provided under the Data Protection Directive, a data controller does not have to re-obtain consent if the processing is documented and obtained in compliance with the GDPR's requirements (Recital 171).
Responsibility and accountabilityEdit
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 the 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 defaultEdit
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 accessEdit
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. In practice however providing such identifiers can be challenging, such as in the case of Apple's Siri, where voice and transcript data is stored with a personal identifier which the manufacturer restricts access to, or in online behavioural targeting, which relies heavily on device fingerprints that can be challenging to capture, send and verify.
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 erasureEdit
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 within 30 days, including noncompliance with Article 6(1) (lawfulness) that includes a case (f) if the legitimate interests of the controller are overridden by the interests or fundamental rights and freedoms of the data subject, which require protection of personal data (see also Google Spain SL, Google Inc. v Agencia Española de Protección de Datos, Mario Costeja González).
Records of processing activitiesEdit
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 officerEdit
If processing is carried out by a public authority (except for courts or independent judicial authorities when acting in their judicial capacity), or if processing operations involve regular and systematic monitoring of data subjects on a large scale, or if processing on a large scale of special categories of data and personal data relating to criminal convictions and offences (Articles 9 and Article 10,) a data protection officer (DPO)—a person with expert knowledge of data protection law and practices—must be designated to assist the controller or processor in monitoring their internal compliance with the Regulation.
A designated DPO can be a current member of staff of a controller or processor, or the role can be outsourced to an external person or agency through a service contract. In any case, the processing body must make sure that there is no conflict of interest in other roles or interests that a DPO may hold. The contact details for the DPO must be published by the processing organisation (for example, in a privacy notice) and registered with the supervisory authority.
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, the DPO must maintain a living data inventory of all data collected and stored on behalf of the organization. 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.
Organisations based outside the EU must also appoint an EU-based person as a representative and point of contact for their GDPR obligations (Article 27). This is a distinct role from a DPO, although there is overlap in responsibilities that suggest that this role can also be held by the designated DPO.
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).
Besides the definitions as a criminal offense according to national law following Article 83 GDPR 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 4)
- 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 5 & 6)
- 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 the GDPR there is a distinct difference between business to consumer (B2C) and business to business (B2B) marketing. Under the GDPR, there are six equally valid grounds to process personal data. 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".
Therefore, companies can continue to use marketing data for the purposes of B2B engagement as long as the appropriate steps are taken to ensure the data is aligned to a specific objective or campaign. One phrase that is now being used is "Correct Marketing to the Correct Person". As part of this companies will need to keep their marketing databases and CRM up to date in order to carry out valid Legitimate Balance Checks.
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
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- Lawful interception, national security, military, police, justice
- Statistical and scientific analysis
- Deceased persons are subject to national legislation
- There is a dedicated law on employer-employee relationships
- Processing of personal data by a natural person in the course of a purely personal or household activity
Conversely, an entity or more precisely an "enterprise" has to be engaged in "economic activity" to be covered by the GDPR.[a] Economic activity is defined broadly under European Union competition law.
The area of GDPR consent has a number of implications for businesses who record calls as a matter of practice. A typical disclaimer is not considered sufficient to gain assumed consent to record calls. Additionally, when recording has commenced, should the caller withdraw their consent, then the agent receiving the call must be able to stop a previously started recording and ensure the recording does not get stored.
IT professionals expect that compliance with the GDPR will require additional investment overall: over 80 percent of those surveyed expected GDPR-related spending to be at least USD $100,000. The concerns were echoed in a report commissioned by the law firm Baker & McKenzie that found that "around 70 percent of respondents believe that organizations will need to invest additional budget/effort to comply with the consent, data mapping and cross-border data transfer requirements under the GDPR." The total cost for EU companies is estimated at around €200 billion while for US companies the estimate is for $41.7 billion. It has been argued that smaller businesses and startup companies might not have the financial resources to adequately comply with the GDPR, unlike the larger international technology firms (such as Facebook and Google) that the regulation is ostensibly meant to target first and foremost. A lack of knowledge and understanding of the regulations has also been a concern in the lead-up to its adoption. A counter-argument to this has been that companies were made aware of these changes two years prior to them coming into effect and, therefore, should have had enough time to prepare.
The regulations, including whether an enterprise must have a data protection officer, have been criticized for potential administrative burden and unclear compliance requirements. Although data minimisation is a requirement, with pseudonymisation being one of the possible means, the regulation provide no guidance on how or what constitutes an effective data de-identification scheme, with a grey area on what would be considered as inadequate pseudonymisation subject to Section 5 enforcement actions. There is also concern regarding the implementation of the GDPR in blockchain systems, as the transparent and fixed record of blockchain transactions contradicts the very nature of the GDPR. Many media outlets have commented on the introduction of a "right to explanation" of algorithmic decisions, but legal scholars have since argued that the existence of such a right is highly unclear without judicial tests and is limited at best.
The GDPR has garnered support from businesses who regard it as an opportunity to improve their data management. Mark Zuckerberg has also called it a "very positive step for the Internet". Consumer rights groups such as The European Consumer Organisation are among the most vocal proponents of the legislation. Other supporters have attributed its passage to the whistleblower Edward Snowden. Free software advocate Richard Stallman has praised some aspects of the GDPR but called for additional safeguards to prevent technology companies from "manufacturing consent".
Despite having had at least two years to prepare and do so, many companies and websites changed their privacy policies and features worldwide directly prior to GDPR's implementation, and customarily provided email and other notifications discussing these changes. This was criticised for resulting in a fatiguing number of communications, while experts noted that some reminder emails incorrectly asserted that new consent for data processing had to be obtained for when the GDPR took effect (any previously-obtained consent to processing is valid as long as it met the regulation's requirements). Phishing scams also emerged using falsified versions of GDPR-related emails, and it was also argued that some GDPR notice emails may have actually been sent in violation of anti-spam laws. Mass adoption of GDPR privacy standards by international companies have been cited as an example of the "Brussels effect", a phenomenon wherein European laws and regulations are used as a global baseline due to their gravitas.
Research indicates that approximately 25% of software vulnerabilities have GDPR implications. Since Article 33 emphasizes breaches, not bugs, security experts advise companies to invest in processes and capabilities to identify vulnerabilities before they can be exploited, including Coordinated vulnerability disclosure processes.
On the effective date, some international websites began to block EU users entirely (including Instapaper, Unroll.me, and Tribune Publishing-owned newspapers, such as the Chicago Tribune and the Los Angeles Times) or redirect them to stripped-down versions of their services (in the case of National Public Radio and USA Today) with limited functionality and/or no advertising, in order to remove their liabilities. Some companies, such as Klout, and several online video games, ceased operations entirely to coincide with its implementation, citing the GDPR as a burden on their continued operations, especially due to the business model of the former. Sales volume of online behavioural advertising placements in Europe fell 25–40% on 25 May 2018.
Facebook and subsidiaries WhatsApp and Instagram, as well as Google LLC (targeting Android), were immediately sued by Max Schrems's non-profit NOYB just hours after midnight on 25 May 2018, for their use of "forced consent". Schrems asserts that both companies violated Article 7(4) by not presenting opt-ins for data processing consent on an individualized basis, and requiring users to consent to all data processing activities (including those not strictly necessary) or be forbidden from using the services.
- 25 January 2012: The proposal for the GDPR was released.
- 21 October 2013: The European Parliament Committee on Civil Liberties, Justice and Home Affairs (LIBE) had its orientation vote.
- 15 December 2015: Negotiations between the European Parliament, Council and Commission (Formal Trilogue meeting) resulted in a joint proposal.
- 17 December 2015: The European Parliament's LIBE Committee voted for the negotiations between the three parties.
- 8 April 2016: Adoption by the Council of the European Union. The only member state voting against was Austria, which argued that the level of data protection in some respects falls short compared to the 1995 directive.
- 14 April 2016: Adoption by the European Parliament.
- 24 May 2016: The regulation entered into force, 20 days after its publication in the Official Journal of the European Union.
- 25 May 2018: Its provisions became directly applicable in all member states, two years after the regulations enter into force.
- 20 July 2018: the GDPR became valid in the EEA countries (Iceland, Liechtenstein, and Norway) after the EEA Joint Committee and the three countries agreed to follow the regulation.
EU Digital Single MarketEdit
The EU Digital Single Market strategy relates to "digital economy" activities related to businesses and people in the EU. As part of the strategy, the GDPR and the NIS Directive all apply from 25 May 2018. The proposed ePrivacy Regulation was also planned to be applicable from 25 May 2018, but will be delayed for several months. The eIDAS Regulation is also part of the strategy.
United Kingdom implementationEdit
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. If the UK leaves the EU, it will become a third country for the purposes of the transfer of personal data outside the EU. This may require an "adequacy decision" by the European Commission on the suitability of the UK's data protection framework, or other appropriate safeguards that may allow such transfers to take place. (Chapter V). It is currently (August 2018) the UK Government's view that a 'legally-binding data protection agreement' between the EU and the UK would be more appropriate than an 'adequacy finding'. Such an agreement would include the UK Information Commissioner taking part in the 'one stop shop' mechanism and having a seat on the European Data Protection Board.
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