A major change is on the way in how American companies must handle European citizens’ personal data. The EU recently rejected Safe Harbor rules that would have allowed US companies to manage EU data under existing US law. Now, new legislation will tighten the rules—and the penalties—significantly, to better protect European citizens’ personal data.
As a result, the stakes are being raised considerably for any business dealing with any data on EU citizens. As the EU takes the global lead on ensuring data privacy, the changes coming soon will likely have further reaching implications moving forward. Here are 8 reasons you can’t afford to ignore these new regulations:
One - A new set of rules called Privacy Shield will build on Safe Harbor to add regulation of the US government’s surveillance of non-US individuals’ data, something that has not been covered before. That means that if the government is sniffing your company’s data and surveils EU citizens’ personal identifying information (PII) in the process, your company could be complicit in a Privacy Shield violation, not to mention risk reputation damage.
Two - Privacy Shield provides a new dispute resolution process that permits EU citizens to sue US government agencies if they believe their privacy was infringed upon. While certainly the agency in question is on the hook, your company could be dragged into the process by default.
Three - Even more severe, the proposed General Data Protection Regulation (GDPR) would fully extend the jurisdiction of EU data laws to any companies holding EU citizens’ data.
Four - Failure to comply with GDPR carries potentially enormous penalties—up to 5% of revenue. Again, this doesn’t include potential damage from a tarnished reputation.
Five - GDPR also includes the “right to be forgotten.” Think of this in terms of an Internet expungement—any company which publishes information regarding an EU citizen must have the capability to remove records pertaining to individual citizens upon request, particularly with regard to anything unflattering or potentially damaging.
Six - GDPR also requires rapid mandatory disclosure of data breaches of any size. Not only is meeting the timely disclosure requirements a challenge, but again, the potential damage in the court of public opinion could be great, even in events or cases where no harm comes to those whose data is potentially leaked.
Seven - Most conventional analytics tools require that data be copied onto local physical servers for analysis, and by default, that includes PII. The risk of a breach under these circumstances is significant, to say nothing of the inefficiency of moving these massive amounts of data around. This means that all companies using these tools are at a significant risk, and should be investigating alternative options. For example, data linking technology allows the customers’ low-level data (including PII) to remain in its original storage for analysis. The data is scanned in situ, and only a summary data set is returned to the analytics engine. Native K-anonymity also helps to solve the PII problem by returning to the analytics engine only data clusters large enough to prevent identification of individual users. These features, available in some solutions like BeyondCore, provide a far higher level of protection than typical data masking or other post-processing methods, enabling companies to retain the ability to conduct key data analysis even in the face of these more stringent legal rulings.
Eight - These new privacy enhancements beg the question: how long is it before these same protections are extended to all citizens—EU, US and others? The change in European data handling could very likely usher in a major sea change in data privacy and protections around the world, precipitating a major shift in the way companies must deal with all PII data.
While neither Privacy Shield nor GDPR have been enacted yet, Privacy Shield has been ratified and implementation is forthcoming. Meanwhile, GDPR is still under development, but most experts predict it will go into force in 2018.
In today’s international business market, these new rules will impact virtually every businesses operating in the US and around the world, even those with just a single EU customer. That’s why it’s urgent that companies act now to plan a complete review and audit of their current data privacy, security and compliance policies—including analytics processes—against these new regulatory requirements. The stakes are about to get much higher, and only those who stay ahead of the game on compliance will win.
(Author: Andy Mutz is chief technology officer at BeyondCore)
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