Although GDPR has been around for some time in the UK, it continues to mystify many businesses.
The aim of GDPR is to give people more control over their personal data and hold organisations accountable for protecting customer data.
Every business needs to abide by the regulations. If they don’t, they face significant ramifications, including costly penalties. This has already happened to a number of UK companies, leaving them with financial losses to handle.
In this guide, we explore the penalties for businesses who fail to adhere to UK GDPR.
What does UK GDPR entail?
The UK General Data Protection Regulation (UK GDPR) governs how personal data is collected, used and stored by organisations. It’s very similar to the EU’s GDPR.
Key points under UK GDPR include:
- Increased control for individuals: UK GDPR empowers people in the UK with more control over their personal information. They have rights to access, rectify, erase and restrict processing of their data.
- Obligations for organisations: Any organisation processing the personal data of UK residents, regardless of location, must comply with UK GDPR. This includes having a lawful basis for processing data, obtaining clear consent and adhering to strict security standards.
- Handling data rights: UK GDPR follows seven core principles that guide how data should be handled. These include principles like lawfulness, fairness, transparency, purpose limitation, data minimisation, accuracy, storage limitation, security and accountability.
When we refer to personal data, GDPR covers things like:
- Personal addresses
- Contact names
- Contact numbers
- Personal IP addresses
- Email addresses
- Racial or ethnic origin
- Political opinions
- Religious beliefs
- Sexual life
- Physical or mental health information
- Whether the customer is a member of a trade union
- Any criminal offences
Simply put, organisations need to collect, store and manage this information in a way that abides by the core GDPR principles shared above.
Why do organisations need to abide to GDPR?
There are many good reasons for business compliance to GDPR.
Firstly, it’s a legal obligation with significant fines for non-compliance. Ignoring the regulation could result in hefty financial penalties – as we’ll explore soon.
GDPR is ultimately about respecting individual privacy rights. By adhering to its guidelines, businesses demonstrate they value user control over personal information. This fosters trust and strengthens customer relationships.
GDPR compliance can also enhance a company’s reputation. Customers are increasingly concerned about data security. Demonstrating responsible data handling practices builds a positive brand image and fosters customer loyalty.
Finally, following GDPR principles like data minimisation and strong security helps prevent data breaches. These breaches can be incredibly damaging, leading to financial losses and reputational harm. Compliance helps mitigate these risks.
What are the GDPR non-compliance penalties?
According to data, a whopping $4 billion in penalties have been dished out under GDPR in the UK and EU so far. Companies have received fines of over £1 billion in some scenarios.
GDPR non-compliance fines are split in to a two-tiered sanction regime. Smaller incidents will be subject to a maximum fine of 2% of the businesses turnover or €10 million – whichever is the larger amount. More severe breaches of the GDPR could be fined up to a 4% of annual €20 million.
In 2016 (before GDPR), TalkTalk was fined £400,000 due to the data breach of 157,000 customers personal data as reported by the BBC. The ICO reported that the fine was due to the company failing to implement basic cyber security measures, making it too easy for the cyber criminals to access the data.
To put this in perspective, if this fine had occurred with GDPR in place, Talk Talk would have been fined approximately £59 million..
Following the breach, it was reported that TalkTalk lost several customers and their share in the home services declined. TalkTalk is now known for being the cheapest fibre broadband providers, a price-based strategy thought to be implemented to gain back the trust of its customers. This is just one example of the fall-out of a data breach.
And while many stories of sizeable fines relate to larger organisations, small businesses should take note. They will still face financial and legal repercussions for non-compliance, as well as severely damaging customer trust.
In short, there’s no excuse for any business not to abide to GDPR.
How to avoid GDPR non-compliance
Remaining compliant to GDPR is the best way to avoid hefty penalties. Here are some simple steps you should follow to meet the rules:
- Understand your data: Start by identifying what personal data your business collects, stores and processes. This includes data from customers, employees, and any other sources. Having a clear understanding is essential for implementing compliance measures.
- Establish a legal basis: GDPR requires a lawful reason for processing personal data. Common lawful bases include consent, contractual necessity, or legitimate interests. Identify the most appropriate basis for each data processing activity you undertake.
- Craft a clear privacy policy: A well-written privacy policy informs users about what data you collect, why you collect it and how you use it. It should also explain user rights under the GDPR, such as the right to access or erase their data.
- Obtain valid consent: Whenever you rely on consent as your legal basis, make sure it’s freely given, specific, informed and unambiguous. This means using clear and plain language and obtaining explicit consent from users.
- Minimise data collection: GDPR emphasises data minimisation. Only collect the personal data absolutely necessary for your business purposes and avoid collecting excessive or irrelevant data.
- Implement strong security: GDPR mandates appropriate technical and organisational measures to protect personal data from unauthorized access, disclosure, alteration or destruction. Regular security audits and staff training are crucial aspects.
- Meet data subject requests: GDPR empowers individuals with various rights regarding their data, including the ability to withdraw it. Be prepared to action these requests promptly when they arise.
- Prepare for data breaches: Despite best efforts, data breaches can happen. GDPR requires reporting certain breaches to the supervisory authority and affected individuals within specific timeframes. Businesses have the responsibility of reporting any breach to the ICO within 72 hours of the occurrence. As of the 25th of May 2018, if you fail to notify within the time frame ICO state that the 2% of annual turnover penalty may apply. Having a data breach response plan in place is crucial to ensuring you react promptly and correctly.
Get GDPR compliance advice
We understand GDPR can be complex, especially when you need to work out how to adhere to it. However, doing so is crucial if you wish to mitigate non-compliance penalties, reputational damage and keep customer data protected.
If you’re unsure where to start, working with a GDPR expert is critical.
Our GDPR consultancy services enable organisations to adhere to the governance framework specified in the GDPR Legislation and identify any potential risks of breaches in relation to data protection. We’ll leave you with a clear set of actions to implement, tailored to your business, to ensure total compliance.
