The European Union's General Data Protection Regulation (GDPR) comes into force in May 2018, radically changing the way organisations have to look after our personal data. Failure to comply could lead to huge fines, yet many businesses are far from ready. Here's why you should care.
Many companies are in full "panic" mode, says KPMG's Mark Thompson
What is GDPR exactly?
A new EU regulation governing how organisations should handle and protect our personal data. Many of the stipulations are already covered by the UK's Data Protection Act; but simply put, organisations need to keep records of all personal data, be able to prove that consent was given, show where the data's going, what it's being used for, and how it's being protected. Accountability is the new watchword. If personal data gets stolen after a cyber-attack, companies have to report the breach within 72 hours of realising it. And the definition of personal data has been extended to include extra categories such as your computer's IP address or your genetic make-up - anything that could be used to identify you.
Why should businesses care?
Non-compliance with the GDPR could lead to huge fines of 20 million euros or 4% of global turnover, whichever is the greater. For a company like tech giant Apple, that could amount to billions of dollars. Consult Hyperion, an electronic financial transactions specialist, forecasts that European financial institutions could face fines totalling 4.7bn euros (£4.1bn; $5.3bn) in the first three years following the GDPR coming into force. Anthony Lee, a partner in law firm DMH Stallard, says: "Talk Talk [a UK telecoms company] was fined £400,000 for failing to prevent the 2015 customer data breach, but under the new regime fines could be many multiples of this."
Is this your firm's attitude to GDPR?
However, a spokesperson for the UK's Information Commissioner's Office (ICO) - the body responsible for enforcing GDPR in the UK - says: "The new law equals bigger fines for getting it wrong but it's important to recognise the business benefits of getting data protection right. "There is a real opportunity for organisations to present themselves on the basis of how they respect the privacy of individuals - and gain a competitive edge. "But if your organisation can't demonstrate that good data protection is a cornerstone of your business policy and practices when the new law comes in next year, you're leaving your organisation open to enforcement action that can damage both public reputation and bank balance."
Why should consumers care?