July 22, 2016 By Bill Laberis 3 min read

The General Data Protection Regulation, or GDPR, is the most sweeping and strict data privacy regulation ever. It was created by the European Union (EU) over several years and voted into law this past April. Businesses now have less than two years to comply with the GDPR, after which the EU flips the switch and mandates compliance with the regulation in May of 2018.

Why Was It Created?

The EU felt, justifiably so, that its 20-year-old data protection standards, called the Data Protection Directive, were outdated. Compared with two decades ago, today’s business landscape is characterized by tidal volumes of personal data gathered by businesses from social media, online commerce and other sources. This data is routinely shared and moved around from country to country.

Also, the old directive set very minimum standards, allowing different EU nations to impose vastly different levels of security. That often made it messy to do business throughout Europe.

What Businesses Will Be Impacted?

Even though the GDPR is of EU origin, it applies to any business or organization offering services or goods to any EU resident. Thus, it applies as a de facto worldwide law to just about every entity that gathers personal data in the course of business. The GDPR defined personal data to include names, email addresses, photos, social media postings, IP addresses, bank and credit card information and medical information.

In one research study, two-thirds of the companies surveyed expect the GDPR to instigate changes in the way they do business in Europe.

How Will the GDPR Be Enforced?

The EU made certain the GDPR has teeth — big, sharp teeth. Willful noncompliance with the regulation can carry penalties as high as 4 percent of annual global revenues. This means that organizations wanting to do business in Europe face the challenge of implementing solutions and practices that ensure compliance with the regulations.

What Are the Highlights of the GDPR?

Some of the biggest takeaways from the GDPR include:

  • Before collecting personal data, businesses must inform individuals of the purpose of the data and why it is being collected. If there are multiple uses, such as sharing the data with marketing firms, the individual must be told of each use. Then the individual must give full consent for this data collection. The wording in all these instances must be clear and unambiguous.
  • Businesses have to provide individuals with a simple means of gaining access to all their data. They also must have the ability to change or correct data, withdraw rights previously given to use it and have their data totally erased.
  • Data cannot be kept permanently. In fact, it will need to be reviewed from time to time and possibly erased after the review.
  • If a cloud provider stores and processes individual data, the provider must first meet all requirements of the GDPR. Using a cloud provider does not get a business off the hook for potential liability should the GDPR be violated.
  • If a company processes large amounts of information on special categories of data, then the company must hire a data protection officer. These categories include information on an individual’s race, religion, sexual preference, union affiliation and others.

Does the Brexit Change Anything?

In all likelihood, Brexit will not change compliance with GDPR for U.K. companies, for the reasons discussed above. But it is possible the Brexit could add new challenges for U.K. firms or firms doing business with the U.K.

What Should You Be Doing Today?

Businesses need to first understand the many details of the GDPR. But the most important item on the to-do list is to undertake an evaluation of current data privacy practices and see how they measure up. There are several steps that should be taken in this calm before the storm of May 2018. It is also wise to seek out a trusted partner that can help guide a business to full compliance with the GDPR.

Read the Interactive IBM Solution Brief: Ready, Set, GDPR

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