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As a UK business owner, complying with data protection rules is in your commercial interest. Most business owners do so for three main reasons: reputational, financial and moral. No company wants to be associated with law-breaking through online news articles and social media posts. This article will explore how full compliance with the General Data Protection Regulation (GDPR) can save you substantial sums of money. This should help your organisation spend funds on things that will drive profit rather than excess spending linked to non-compliance with data protection rules.
What is the GDPR?
The General Data Protection Regulation (UK GDPR) is the main piece of UK data protection law. It sets out numerous rules on how UK businesses should store and process personal information.
The GDPR aims to guide UK organisations on the safe storage and processing of personal data, so individuals can be confident that their sensitive information is not misused. Many business owners are already well aware of the GDPR due to the various online and media articles concerning the Information Commissioner’s Office (ICO). However, most attention regarding the ICO relates to its ability to fine UK organisations up to £17.5m for GDPR violations.
Why Are ICO Fines So High?
The ICO can hand down such substantial fines to UK businesses to deter UK businesses from ignoring the GDPR. Whilst the GDPR is complex and lengthy, the consequences of violating its rules are so severe that many UK business owners obtain expert advice to ensure they comply with its regulations.
It is worth noting that the ICO’s primary concern is to encourage UK organisations to comply with the GDPR rather than simply fining them. In this way, it is worth checking out the ICO website and their online guidance documents, which aim to help UK organisations understand GDPR rules. This is particularly the case given that the ICO gives no leeway to arguments of ignorance or ‘not understanding data protection rules’ when setting fine levels.
Now that we appreciate how the GDPR and ICO work let us explore three ways GDPR compliance can save your business money.
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1. Lower Risk of ICO Fines
If the ICO believe your business may have broken GDPR rules or suffered a data breach, they will start a formal investigation and request further information. If they conclude that your business has failed to comply with the GDPR, they will consider whether to impose a fine and, if so, how large that fine should be. The larger the breach and higher the level of harm to individuals, the higher the penalty.
Naturally, the ICO only impose financial penalties on companies that have violated GDPR rules. Therefore, avoiding violations of data protection rules means you have a lower chance of ICO involvement.
2. More Efficient Data Collection
Efficient data collection focuses on only collecting information necessary for your business to operate.
So, for example, if you run a coffee shop, you may ask for a customer’s first name for their order and can write that on their takeout cup (and receipt). However, asking for their date of birth or national insurance number would be unnecessary.
A coffee shop may request more customer information to join a loyalty scheme through a digital app. However, even then, the coffee store should only ask for their name and email address and avoid asking for age, health and tax details.
Storing less personal information means less digital storage. Whether your organisation uses digital storage devices (such as hard drives and servers) or cloud storage, the cost of storing digital information increases with size. So a business that only records 10GB of digital data will pay much less for digital storage costs than one that records 200GB.
3. Avoiding Reputational Damage
The ICO publicise notable GDPR violations and large fines on their website. This results in a high level of negative publicity for the business concerned.
Many UK businesses have experienced reduced demand from UK customers due to the reporting of data protection law breaches through the ICO website and news websites. Accordingly, non-compliant companies are penalised through both a fine and the subsequent reduced consumer demand for their goods and services.
Key Takeaways
The GDPR is a complex piece of UK law. Nevertheless, it is worth making every reasonable attempt to comply with its rules. Many business owners take advantage of the online guidance on the ICO website and consult expert data protection lawyers for data protection documentation and audit work. The cost of complying with GDPR rules is lower than the financial impact.
If you need help ensuring your business complies with the GDPR, 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
Many business owners seek to avoid GDPR infringements by asking expert lawyers to draft data protection policies and documents. These materials will establish an exemplary process for handling and storing sensitive personal data and ensuring valid consent for certain activities.
Not necessarily, no. Fines vary on a case-by-case basis. However, the ICO tend to issue penalties in the thousands or tens of thousands (rather than hundreds) as they do not believe lower penalties act as an effective deterrent.
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