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Demonstrating compliance with the GDPR

September 2016

The General Data Protection Regulation (GDPR) will significantly impact businesses' approach to data privacy compliance. Businesses should start preparing now to make sure they are compliant when the GDPR comes into effect on 25 May 2018, and manage the risks accordingly. Not only do organisations have to comply with the GDPR, they also have to be able to demonstrate compliance. Here are some top tips to help you go through the compliance burden.

Non-European businesses and the GDPR

Prior to starting a gargantuan reform of their data privacy practices, businesses should first assess whether the GDPR will apply to them. The peculiarity of the GDPR is that it extends the reach of EU data protection law to non-European businesses. In particular, non-European businesses which offer goods or services to data subjects in the EU or monitor the data subjects' behaviour (provided that such behaviour takes place in the EU) will be caught and have to comply with the GDPR despite having no office or subsidiary in the EU.

Implications of the accountability principle for businesses

The GDPR focuses on the concept of accountability whereby businesses will have to "demonstrate" compliance with the principles relating to the principles of personal data. This will involve implementing more demonstrable processes and maintaining a proactive approach. Businesses should also be prepared to respond to requests from individuals who want to exercise their rights about the processing of their personal data, businesses who are using data processors to process their commercially sensitive information, or requests and investigations from Supervisory Authorities (SAs). Failure to do so may expose businesses to high fines (up to 4% of the annual turnover or 20 million Euros, whichever is higher), damage to their reputation and/or loss of business opportunities.

Steps towards demonstrating compliance with the GDPR

No matter their size and industry sector, businesses may find it useful to put in place a GDPR compliance programme to implement and monitor their data processing activities, both in terms of their internal business, and for their clients and other third parties they deal with.

Assessment of current data privacy practices

Businesses should review their existing data privacy practices against the GDPR requirements to identify the actions they need to implement to meet the GDPR requirements by 2018. They may then want to identify the key compliance issues they need to focus on to implement their future projects involving the handling of personal data in line with their commercial objectives and market trends. This assessment should be carefully carried out as it will determine what they need to do to comply with their GDPR obligations. This may include assessing the current technologies used to deliver the services to their clients so they also help meet the GDPR requirements.

Creation of a data privacy governance structure

The creation of a data privacy governance structure is helpful to implement and drive the GDPR data privacy compliance programme. It needs to involve senior management at the outset of its inception to ensure it is incorporated into the board management's agenda and is fully supported throughout its lifecycle. It should set out the tasks, responsibilities and reporting lines of the individuals involved and should remain in place on a permanent basis to ensure continuous compliance with the GDPR. Businesses that already have a data protection officer (DPO) in place may ask the DPO to create such governance structure and be accountable for the overall data privacy programme. Those who do not have a DPO yet should carefully consider designating one internally or externally, whether or not they are required to do so - read more about DPOs here.

Personal data inventory
Data Protection Officer

Both data controllers and data processors have the obligation to maintain records of their processing activities including the personal data flows. This is a major shift from the current European data protection regime where some Member States require prior authorisation of certain personal data processing activities (e.g. for the transfer of personal data). This also means that businesses will need to have a clear understanding of their data processing activities and security systems to be able to record them all. A data mapping exercise may prove useful to achieve this. This involves creating specific tools (manual or electronic) that capture the obligations and constantly monitor and report on data processing activities. That inventory must be up-to-date and as accurate as possible as it may be subject to audit by SAs.

Creating information notices

The GDPR requires data controllers to inform the data subjects about the processing activities carried out including detailing the type of data collected, the purpose for which it is collected, how it is being used and protected, the name of the organisation processing the personal data and the data subject's rights including the right of access, to object, and to erasure (the right to be forgotten). This transparency obligation means that businesses will have to comply with their notice obligations (a list of mandatory notices is provided by the GDPR) and amend their internal policies accordingly.

Consent mechanisms

The conditions for consent are harder to meet under the GDPR and businesses will have to review their current data processing activities which rely on consent, as well as their privacy policies. In addition, businesses will have to document the collection of consent. For employment purposes, specific conditions may apply as Member States are entitled to take specific measures in that area so businesses should be aware of any additional requirements in their own jurisdiction. As far as marketing activities are concerned, it remains to be seen whether the e-Privacy Directive (currently under review) will align its conditions for consent with the GDPR.

Implementation of technical and organisational measures

Both data controllers and processors have to implement appropriate technical and organisational measures to ensure that personal data processed is securely and adequately protected. Businesses should explore implementing security techniques such as pseudonymisation and privacy by design and default in their data processing activities. They should also work alongside their cybersecurity teams and other business functions to ensure that the appropriate security measures are applied and comply with their clients' requirements where appropriate. Again, there should be clear documentation of these techniques as well as regular testing and updating.

Data Protection Impact Assessments

Data Protection Impact Assessments (DPIAs) are an essential compliance tool under the GDPR. They are intended to help identify and manage risks to personal data. They are also crucial in showing the SAs that a business has done everything it can to ensure data is processed in accordance with the law. Read our article for more on DPIAs.

Reporting personal data breaches

The GDPR specifically mentions that reporting personal data breaches forms part of the accountability principle. Businesses will need to create formal procedures to ensure that personal data breaches are addressed appropriately and in a timely manner to mitigate the risks to the individuals affected by the breach (e.g misuse, loss of data, damage, rights and freedoms of the individuals). Such procedures will need to be tested to ensure they work properly. See our article on Data security and breach reporting for more.

The introduction of the accountability principle means that businesses will have to do more and be seen to be doing more to comply with European data protection law. The creation of a GDPR data privacy compliance programme is the first step. Demonstrating compliance is not just about showing that a business can achieve compliance with the GDPR requirements. It has to reflect and record actual compliance.

If you have any questions on this article or would like to propose a subject to be addressed by the Global Data Hub please contact us.

Jean-David Behlow

Jean-David Behlow      

Jean-David looks at how to create the required audit trail under the GDPR.

"The introduction of the accountability principle means that businesses will have to do more and be seen to be doing more to comply with European data protection law."