"Key GDPR Requirements for Businesses: A Guide to Navigating Compliance Challenges"
Businesses worldwide are preparing for May 25, 2018, when the European Union’s (EU) General Data Protection Regulation (GDPR) will come into effect. This regulation will impact any organization handling the personal data of EU citizens, regardless of whether the company is based within the EU or outside of it.
In addition to GDPR, companies must also be mindful of the CAN-SPAM Act, a U.S law that sets rules for commercial email messages, including requirements for opt-out options, and enforces penalties for non-compliance. Both GDPR and the CAN-SPAM Act impose strict rules on data protection and privacy, which are especially relevant for businesses engaged in email marketing or handling personal information.
Recent data shows that nearly two-thirds of global businesses need to reassess their data processing practices to remain compliant with GDPR. The standards set by both GDPR and the CAN-SPAM Act are raising concerns for companies, as compliance will require increased financial investment. In fact, half of international organizations believe they won’t be able to meet the EU’s high compliance standards.
In this context, it’s crucial for businesses to understand the key elements of both GDPR and the CAN-SPAM Act and explore how Louisdata’s solutions can help address these compliance challenges. The following essential insights will help B2B marketers prepare for a compliant future, ensuring they meet the requirements of both regulations.
1. All Companies Fall Under the GDPR Scope
There’s no ambiguity about which companies are subject to GDPR compliance. The regulation explicitly states that any organization, whether inside or outside the EU, that processes or monitors the personal data of EU citizens must comply with GDPR, making it the first truly global data protection law.
If your business targets EU customers in any way, whether by selling or marketing to them, you must adhere to GDPR’s stringent mandates to protect personal data. Failing to comply could result in severe penalties: either 4% of your company’s global annual revenue or €20 million, whichever is higher.
In addition to GDPR, businesses should also be aware of the CAN-SPAM Act, a U.S. regulation aimed at protecting consumers from unwanted commercial emails. While CAN-SPAM applies specifically to email marketing in the U.S., it shares similarities with GDPR, such as requirements for obtaining consent and giving consumers the ability to opt out of communications. Both regulations hold companies accountable for how they manage personal data and communication with consumers.
Additionally, while data controllers were previously responsible for data processing, under GDPR, any organization involved in handling personal data, including third parties, will now be held accountable for compliance.
2. The Definition of Personal Data Expands
GDPR builds upon the 1995 Data Protection Directive by offering an expanded definition of “personal data.” The new regulation gives a more detailed view of what constitutes personal data, including information that can directly or indirectly identify an individual. This includes:
Basic identification details: Name, email address, phone number, etc.
Economic and social information: Employment status, financial data, etc.
Health and genetic data: Medical records, biometric information, etc.
Cultural and demographic information: Ethnicity, religion, etc.
Digital information: IP addresses, cookie data, RFID tags, etc.
Similarly, the CAN-SPAM Act regulates the use of email addresses as personal data. It requires businesses to secure consent from users before sending marketing emails and mandates that businesses provide clear opt-out mechanisms in each email. Failure to comply with CAN-SPAM can lead to substantial penalties.
3. Empowering EU Citizens with Control Over Their Data
GDPR aims to shift the balance of power toward individuals by granting them enhanced rights to control their personal information. The key rights that individuals will have under GDPR include:
Access to their data: Individuals can inquire about how their personal data is being used.
Right to withdraw consent: People can revoke their consent at any time.
Data portability: Individuals can transfer their personal data from one service provider to another.
Notification of breaches: Companies must inform individuals if their data has been compromised in a breach.
Similarly, the CAN-SPAM Act provides consumers the right to opt out of receiving unsolicited emails. Organizations must respect opt-out requests and honor them promptly. Non-compliance with these rights can result in heavy fines.
4. Mandatory Appointment of a Data Protection Officer (DPO)
Under GDPR, hiring a Data Protection Officer (DPO) is required in certain situations. A DPO must be appointed if:
The organization is a public body.
Data processing activities involve systematic and regular monitoring of large quantities of personal data.
The company handles sensitive data, such as criminal records or health information.
The DPO’s primary role is to ensure that the organization adheres to GDPR guidelines. The DPO is also responsible for keeping the organization informed about data protection obligations and acting as a point of contact for all privacy-related matters.
While the CAN-SPAM Act doesn’t require the appointment of a Data Protection Officer, it does mandate that businesses take steps to ensure compliance with its requirements. This often involves establishing a privacy policy and an opt-out procedure for email communications.
5. Businesses Must Prove Valid Consent
Under GDPR, businesses can no longer assume that obtaining consent to collect personal information is enough. They must now prove that consent was freely given, specific, informed, and unambiguous.
Companies need to explicitly state the purpose for which data will be used before asking for consent.
Pre-ticked checkboxes or opt-ins will no longer be considered valid consent under GDPR.
This means businesses must clearly document how consent is obtained and ensure the process is transparent and compliant with the regulation.
Similarly, the CAN-SPAM Act requires that email marketers obtain consent from recipients before sending marketing emails and gives individuals the right to opt-out of further email communications.
6. Enhanced Data Security Requirements
GDPR mandates that organizations design and implement data protection measures from the outset, rather than as an afterthought. Known as privacy by design, this principle requires companies to integrate data security features into the systems used to process and store personal data.
To ensure compliance, businesses must:
Review current systems for vulnerabilities.
Address security gaps to protect data from breaches and unauthorized access.
Under the CAN-SPAM Act, companies must also take reasonable steps to protect the privacy and security of the email addresses they collect and to honor opt-out requests promptly.
What Can Businesses Do to Meet GDPR and CAN-SPAM Compliance?
1. Clean Your Existing Database
To comply with GDPR and CAN-SPAM, businesses must avoid retaining outdated or irrelevant data. Conduct a data hygiene check to identify and remove records that are no longer needed or were obtained improperly. This will reduce the risk of fines and non-compliance.
2. Update CRM Data
Ensure that your customer relationship management (CRM) system contains accurate, up-to-date data. Remove contacts who have opted out of communications and ensure that any data you hold for EU customers has been obtained with valid consent. Post-GDPR, you cannot access personal data without explicit permission. Similarly, under CAN-SPAM, you must ensure that email recipients have opted in to receive communications.
3. Conduct a Security Audit
Under both GDPR and the CAN-SPAM Act, protecting personal data and ensuring its security is paramount. Perform a thorough audit of your existing security systems to identify any non-compliance issues that could expose data to risks.
4. Launch Opt-In Email Campaigns
As part of your compliance strategy, launch an opt-in email campaign to re-confirm consent from your EU database contacts. Clearly explain the purpose of data collection and ensure that opt-in clauses align with GDPR requirements. The CAN-SPAM Act also requires that recipients have the ability to opt out of receiving emails at any time.
5. Work with GDPR- and CAN-SPAM-Compliant Vendors
Before GDPR, organizations had no liability on data protection matters. The data processors and controllers were always held responsible for protecting consumer data. But now, under both GDPR and CAN-SPAM, even companies will be held accountable for the ignorance of their third-party data suppliers or vendors. Ensure your vendors are fully compliant with both regulations to avoid legal risks.
Conclusion
With GDPR and the CAN-SPAM Act both setting strict data protection and privacy standards, businesses need to act quickly to ensure they meet compliance requirements. Louisdata’s compliane solution can help you address all your data compliance needs, from cleaning and enriching CRM data to ensuring secure data handling and obtaining valid consent from customers.
By following these steps and leveraging the right tools, businesses can avoid the potential legal and financial consequences of non-compliance while building stronger, more transparent relationships with their customers.
