An Overview of UK Privacy Laws for Small Businesses

Privacy law rules are vital for small businesses to understand and comply with – both to protect themselves from legal risk and to avoid considerable reputational damage. Handling personal data, including customer details, supplier information, and employee records, is a daily activity of most businesses. In addition, using cookies for marketing purposes or sending out email campaigns is commonplace in small businesses looking to grow their customer base.

A small business using such information and data this way gives rise to several privacy law considerations and rules. With strict privacy laws in place (in particular, the UK General Data Protection Regulation (UK GDPR), the Data Protection Act 2018 (DPA 2018), and the Privacy and Electronic Communications Regulations (PECR)), small businesses cannot afford to ignore their legal obligations. This article will explore fundamental UK privacy laws, key issues that small businesses should understand, and why they matter. 

What is the Impact of the UK GDPR on Small Businesses?

The UK GDPR is a fundamental UK data protection law that sets out mandatory rules regarding the use of personal data. This law applies to all forms of data processing (from managing customer and supplier personal details to handling employee and volunteer records and collecting CVs). 

As a small business, you will likely collect at least some forms of personal data and find yourself subject to the UK GDPR rules. The rules your company must follow will depend on how and why you use personal information, including whether you act as a data controller or a data processor. Some examples of compliance obligations for a controller will typically include complying with data protection law principles when processing information, informing individuals about how you use their personal information, having procedures in place to resolve data subject rights, and reporting personal data breaches when necessary. 

Failing to comply with these critical rules can lead to heavy fines and significant reputational damage. For a small business, this can be particularly harmful. For instance, a bad reputation regarding your protection of personal data could mean less business and revenue. The ICO can impose fines of up to £17.5 million or 4% of global turnover for severe breaches, which could be financially devastating for small businesses. 

What Does the Data Protection Act 2018 Mean For Small Businesses?

The Data Protection Act 2018 (DPA 2018) complements the UK GDPR by addressing specific areas that the UK GDPR does not cover. By way of example, it covers rules for processing special categories of data and sets standards for how law enforcement and intelligence services should handle personal data. The DPA 2018 also gives the Information Commissioner’s Office (ICO) the authority to enforce data protection laws and issue penalties for non-compliance. Small businesses must understand how the DPA 2018 works alongside the UK GDPR to ensure they are fully compliant and avoid legal consequences. Small businesses should carefully consider and implement compliance under the UK GDPR and DPA 2018. 

How Do PECR Regulations Affect Small Businesses?

PECR is the law which governs data privacy in electronic communications, making it particularly relevant for small businesses engaged in marketing activities. 

These rules cover common matters such as email marketing and website use. For example, there are strict rules regarding obtaining consent from consumers before sending out email marketing communications unless exceptions apply. There are also mandatory rules regarding the use of cookies, including getting consent for cookies in most circumstances and informing users about how cookies are used. 

Beyond the financial implications of breaching the above rules, your business should consider the damage to your reputation, particularly because both consumers and business partners increasingly value data privacy. Negative publicity from a data breach or a spam email campaign can shake your customers’ trust and hurt your brand image. To avoid such consequences, your business should understand its obligations under these rules and ensure you comply. 

GDPR Essentials Factsheet

This factsheet sets out how your business can become GDPR compliant.

Download Now

What are Privacy Rights?

In addition to the rights set out above, the Human Rights Act of 1998, which incorporates the European Convention on Human Rights, provides privacy protections. These rules can also be relevant for a small business.

Why is Compliance with UK Privacy Laws So Important for Small Businesses?

Compliance with privacy laws is vital for small businesses from a legal and commercial perspective. Strong privacy practices can help your company build trust with customers and the public, who are increasingly concerned about how businesses handle their personal data. 

Trust with the use of data and information is a valuable asset that can also set your business apart from its competitors. A data breach (on the other hand) can cause long-term damage, making it challenging to rebuild your reputation.

In addition, complying with these rules is vital to help your business better avoid regulatory scrutiny and enforcement action such as fines.

Privacy laws in the UK are broad and can be a challenge to understand – as such, early legal advice can significantly help small businesses. Many owners of small companies may misunderstand or lack knowledge of complex rules or get them wrong. Legal guidance can help your small business fully understand its specific obligations and help you take the necessary steps to comply. Compliance with these rules is a more than one-size-fits-all approach and depends on the activities of the business. As such, nuanced legal advice can help you ensure you take the correct compliance actions applicable to your small business. 

Key Takeaways

Understanding UK privacy laws is vital for small businesses, as it helps them develop strong and compliant practices and avoid legal and financial risks. Compliance with the UK GDPR, DPA 2018, and PECR can demonstrate that you are fulfilling your legal obligations and commercially benefit your business by allowing you to build trust and protect your reputation. Early legal advice from a data protection lawyer can help your company navigate these complex rules and implement effective compliance measures. If in doubt, you should seek legal advice to help protect your business from risk. 

If you need support understanding how UK privacy laws impact your business, our experienced data, privacy, and IT lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

Frequently Asked Questions