In the past few years, we have seen the planes of the internet change drastically. After the rise in cybercrimes, users have now become conscious of their privacy. Consumers want to feel in control of their data and the information that they feed online. Initially, companies used to draft their own contracts, which were ultimately heavily biased and in their favor.
Soon after the rise in data theft, the European regulators observed the negative effect on the customers because of improper regulation. That is how General Data Protection Regulation (GDPR) came into existence.
To know more about what GDPR entails and its impact on businesses, continue reading!
What is GDPR?
As explained earlier, GDPR is a set of rules and regulations constructed by European regulators to protect online consumers. Previously, regulations of a similar kind have been created but not with such a serious intention as GDPR. That made a huge difference and made the regulation stand out among the others.
Under the execution of GDPR, the data privacy and protection rules which are to be exercised by the organizations are severe. In case any corporation is caught not following the rules, their penalties are equally rigid.
Here are some points that can explain what makes GDPR different:
- GDPR does not only regulate companies that are based in Europe. It doesnt matter where the organization is based as long as its dealing with products and services with customers in Europe. Therefore, any company that falls under this umbrella is bound to comply with the regulations of GDPR.
- The regulations of GDPR demand all companies to hire a GDPR officer that can look over all compliance norms and take responsibility for consumer data security.
- If any company is fined with a penalty on the grounds of not complying with the norms provided by the General Data Protection Regulation (GDPR), they either have to pay 4% of the global turnover
- These new data norms expect companies to appoint a dedicated GDPR officer who will be responsible for following all compliance norms. If the company fails to comply with the very extensive norms mentioned by General Data Protection Regulation (GDPR), the penalty is 20 million Euros or 2-4% of the global turnover of companies, whichever is greater! This is a huge penalty. Companies that sell products and services online are not used to such serious regulations. This is a drastic change that the companies are having a difficult time adapting to.
Impact of GDPR on Businesses
Every government or private body that is set to regulate any sector that concerns the public has its own perks and cons. To know the benefits and disadvantages of GDPR, read the following section:
- The fact that makes the stance of GDPR solid among other regulations is that it gives utmost importance to consumer consent. For this regulating body, consent is paramount, and if any company falling under its force refuses to follow this non-negotiable aspect is bound to face strict repercussions.
- Now, companies cannot take advantage of the long contracts to sneak in agreements that were not read by customers in the first place. They are to receive explicit consent from the consumers and come clear with the type of data the company will use and how they will process it. Keep in mind that it does not concern the GDPR whether this type of data processing takes place within the EU or outside its boundaries. To simply explain, as long as the data is being taken by an EU citizen, this regulation of the GDPR is to be applied.
- Another crucial benefit of the General Data Protection Regulation is that a consumer can exercise the right to be forgotten. This means that even if you agree to exchange data today, at any point in time, you have the liberty to change your mind. For example, for purchasing purposes, if you have shared your credit card information with a company, you can always ask them to delete your details or your complete account from their history log.
- In the history of data protection laws. GDPR pulled off a first-timer with the right to be forgotten. Due to this rule, companies can not trap innocent consumers by offering them outdated contracts and making them sign it. Customers no longer have to worry about their personal data being held hostage by illegal means. Thanks to this rule, all digital companies are legally bound to abide by the right to be forgotten under the GDPR restrictions and delete all the data provided by the customers.
- One of the concerns that experts have come up with regarding GDPR is spamming. In the past, it has been part of large-scale spamming. It is ironic as the main goal of GDPR is to avoid spam. GDPR has been seen sending millions of spam e-mails to users interrogating whether they are giving their consent to share their data.
- The problem here is that other companies are targeting users in the same way, making it hard for consumers to differentiate. Many end up clicking the “I agree” button blindly, which can compromise their personal data. Ultimately, this move is causing a hindrance to the whole idea of the General Data Protection Regulation.
- The other disadvantage of GDPR is its impact on small online businesses as it is more complex for them than the big companies. Since every business needs to be responsible when it comes to turnover compliance, it could be very hefty on the pocket for small companies. Businesses that have strong financial backing have it easy to comply with GDPR norms, but when it comes to startups, they have to be careful as paying hefty fines could land them under great economic stress.
- That is the same reason why Google and Facebook, which were presumed to be greatly affected by the General Data Protection Regulation are now their biggest beneficiaries. This fact makes it difficult for small businesses to compete in the market with larger businesses.
What happens if you fail GDPR compliance?
The legal punishment for not being able to comply with GDPR is pretty hefty: the fine amount can go up to 10M Euros or 2% of the global annual revenue for the last performing year. Many businesses can crumble hard under this very hard financial blow. However, GDPR has been lenient to its maximum penalty when it comes to enforcement.
That being said, this looming threat has been a great hurdle for U.S. companies and they have exhausted all resources to come to terms with GDPR compliance. If you own a business and deal with European customers, it is better to ensure compliance with GDPR by partnering with an attorney. A professional consultant with expertise in dealing with any sweeping law like General Data Protection Regulation is the best way to mitigate any compliance issues.
All in all, the GDPR like any other law body has its own set of pros and cons. However, if you are a consumer or a big business, you can easily deal with General Data Protection Regulation.If your company is based in uk, One of the recommended method to increase security, use Australia VPN. On the flip side, if you are a small business, you might have to bear the high cost of such regulations if there is no smart strategy in place.