GDPR Unpacked: Coverage and Vital Considerations for E-commerce Entrepreneurs

If you’re a business owner or a marketer, you may have heard of GDPR, but you may also be unsure about what it entails. Don't worry, you're not alone!

The GDPR is a comprehensive data privacy law that governs the collection, use, and processing of personal data of individuals in the European Union (EU). It's designed to protect people's privacy in the digital age, and it applies to businesses of all sizes, operating in the European Union.

But what does this mean for your business, and which countries does it cover? In this blog post, we'll dive into the details of GDPR, explain the countries it covers, and highlight any specific compliance regulations within it. 

Countries covered by GDPR

The General Data Protection Regulation (GDPR) applies to all 27 EU countries. In addition to these countries, the GDPR also covers the United Kingdom, even after it left the EU (Brexit). The GDPR applies to any organization doing business in the EU, regardless of its operating location. It must follow the GDPR if it processes the personal data of EU citizens.

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✅ Here is the full list of European countries where GDPR applies:

Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.

❌ Here is the full list of European countries where GDPR DOES NOT apply:

Albania, Belarus, Bosnia and Herzegovina, Kosovo, Moldova, Montenegro, North Macedonia, Russia, Serbia, Turkey, Ukraine.

Scope of Application: EU and Non-EU businesses

It's important to understand that the GDPR applies to all businesses, operating in the EU. Those located in the EU aren't the only ones affected. The rule applies to non-EU organizations that engage in these activities:

1. Companies that collect or use the personal data of EU residents must follow the GDPR.
2. Companies that sell goods or services to EU residents. If a business does this, no matter where it is located, it must follow the GDPR. This applies to products or services (free or paid) offered to EU residents.
3. Organizations that monitor the behavior of EU users. If they do this through website cookies or other tracking technologies - they must adhere to GDPR requirements.

⚠️ If your company engages in any of these activities, compliance with the GDPR is mandatory!

Types of Data Covered

The GDPR covers a wide range of data, including:

1. Personal Data. This means any information that can identify an individual, such as name, address, email address, and ID number.
2. The GDPR places extra protection on certain types of personal data which are more sensitive. These include:
   
   - Race and ethnicity
   - Religion
   - State of health
   - Sexual orientation

If businesses collect and process sensitive information like this, they must take extra care to follow GDPR. This involves using strict data protection and making sure you have consent from individuals before processing their sensitive data.

Specific compliance regulations within GDPR

In addition to the general provisions, some EU member states have their own GDPR compliance regulations. In fact, some EU countries have even stricter data protection laws than GDPR. Lets go over some of them:

Germany: Federal Data Protection Act (Bundesdatenschutzgesetz or BDSG)

The BDSG is Germany's main data protection law. It regulates data processing by private groups. It has been updated to align with the GDPR and provides additional requirements and guidance for data processing within Germany.

Key provisions include:

• Purpose Limitation: Data processing should be limited to specific, clearly defined purposes.
• Data Accuracy: Data must be accurate and up to date.
• Employee Data Processing: Specific rules apply. They cover the processing of employee data. This includes consent, data retention, and access.

France: Data Protection Act (La loi informatique et libertés)

The Data Protection Act is the main law. It regulates data protection and privacy in France. It provides a detailed legal framework for the processing of personal data and the rights of individuals. Key elements include:

• The French Data Protection Authority (CNIL) ensures compliance with the Data Protection Act.
• The guide covers receiving consent, keeping data secure and handling data retention.
• Specific provisions to protect the rights of data subjects.

Spain: Organic Law on Data Protection (LOPD)

The LOPD is Spain's main law for data protection and privacy. It was updated in 2018 to match the GDPR. It includes:

• Data processing must be lawful, fair, and transparent.
• Data controllers must take appropriate measures to protect personal data.
• This section covers rules for data controllers. It gives guidance on their duties and how to follow the rules.

Other Countries with Specific GDPR-Related Laws

Switzerland: Federal Act on Data Protection (FADP)

Switzerland's Federal Act on Data Protection (FADP), which was recently revised and came into effect on September 1, 2023, shares many similarities with the EU's GDPR but also has some key differences. Here is what you need to know:

• Fines for Individuals - unlike GDPR, where fines can only be against companies, the FADP can rule criminal sanctions on individuals within the organization (such as management or employees) for willful non-compliance, with penalties up to CHF 250,000.
• Data Portability - FADP applies only when personal data is processed automatically (such as data collected by software or apps). Unlike the GDPR, the FADP doesn’t specify that the data has to be shared in a commonly used or machine-readable format like a CSV file.
• Swiss-EU Data Transfers - Switzerland is part of the EU’s Schengen Area, but it’s not an EU member. The EU recognizes Switzerland as providing an adequate level of protection, making data flows between the EU and Switzerland easier.
• Profiling - it actually defines what profiling means, which isn’t always the case in privacy laws. It refers to analyzing or predicting behavior, preferences, or other user traits. For high-risk profiling (like when important decisions are made based on profiling, such as credit approvals), the FADP lays down stricter rules.

If your organization is already GDPR-compliant, adapting to the FADP will primarily involve fine-tuning processes, especially for profiling and cross-border data transfers.

Italy: Personal Data Protection Code

Italy's Personal Data Protection Code, updated to align with the GDPR, includes specific requirements such as:

• Data Protection Officer (DPO) - certain organizations are required to appoint a DPO.
• Employee Monitoring - specific rules about monitoring employees' communications and activities.

Netherlands: Implementation Act of the GDPR

The Dutch Implementation Act provides additional national rules, including:

• Data Breaches - mandatory reporting of data breaches to the Dutch Data Protection Authority (DPA) within 72 hours.
• Minors' Data - special protections for the data of minors under the age of 16.

Sweden: Data Protection Act

Sweden’s Data Protection Act supplements the GDPR with national provisions, such as:

• Public Sector Data Processing: Specific rules for data processing by public sector bodies.
• Sensitive Data: Additional safeguards for processing sensitive personal data.

Poland: Personal Data Protection Act

Poland’s Personal Data Protection Act complements the GDPR by introducing:

• Data Protection Officer: Requirements for appointing DPOs and their responsibilities.
• Sanctions: Specific administrative penalties for non-compliance with GDPR.

Key Compliance Actions for Businesses

1. Understand Local Laws: Familiarize yourself with the specific data protection laws in each EU country where your business operates.
2. Implement Technical and Organizational Measures: Ensure data security and compliance with both GDPR and local regulations.
3. Appoint a Data Protection Officer (DPO): If required by national law, appoint a DPO to oversee compliance efforts.
4. Monitor Compliance: Regularly review and update data protection practices to adhere to evolving regulations.
5. Engage with Data Protection Authorities: Maintain open communication with relevant DPAs and report data breaches promptly.

Following these guidelines can help businesses comply with GDPR. It applies across different EU member states.

Consequences of non-compliance with GDPR

The GDPR sets high standards. It is for data protection and privacy. Non-compliance with its regulations can lead to severe repercussions for businesses. Below are some of the potential consequences:

Fines and Penalties

Non-compliance with GDPR can result in substantial fines:

• Fines can be up to 4% of a company's global revenue or €20 million, whichever is higher.
• The exact amount depends on different factors. These include the nature, seriousness, and duration of the violation. They also depend on the degree of responsibility and previous infringements.

Legal Action

Various parties can initiate legal proceedings against non-compliant companies:

• Data Subjects: Individuals whose data rights have been violated can file lawsuits for damages.
• Data Protection Authorities (DPAs): Regulatory bodies have the power to take legal action to enforce compliance.
• Other Affected Parties: This can include business partners or competitors who are adversely affected by the data breach.

Lawsuits can cost companies a lot. This includes legal fees, settlement costs, and payments. Also, long legal battles drain resources. They divert focus from core business.

Reputational Damage

Non-compliance can severely harm a company's reputation:

• Loss of Trust: Customers may lose trust in your company if it fails to protect their personal data.
• Negative Publicity: Media coverage of data breaches and regulatory fines can hurt a company's image, making it difficult to attract new customers and business partners.
• Market Value Impact: Reputational damage can negatively affect a company’s market value and investor confidence.

Business Disruption

Data breaches or other GDPR violations can disrupt business operations in several ways:

• Operational Downtime: Addressing a data breach may require stopping operations to investigate and resolve the issue, leading to lost productivity.
• Increased Costs: Your business may face additional costs related to remediation efforts, such as improving security measures and compensating affected data subjects.
• Regulatory Scrutiny: Continuous monitoring and audits by regulatory authorities can place an additional administrative burden on businesses.

Ensuring GDPR Compliance

To avoid these bad outcomes, businesses must prioritize GDPR compliance. You can do this through several key practices:

Obtain Valid Consent

• Clear Communication: Ensure that consent requests are clear and easily understandable, specifying the purpose for data collection and processing.
• Explicit Consent: Obtain explicit consent from data subjects before processing sensitive personal data.
• Revocation Mechanism: Provide a straightforward method for individuals to withdraw their consent at any time.

Website compliance (Cookie Banner)

1. Transparency - you need to inform visitors about the cookies your website uses and their purpose. This includes details about: Types of cookies (e.g., essential, analytics, marketing); Data collected; Third-party services involved (e.g., Google Analytics, Facebook Pixel).

2. Consent Before Cookies Are Set - no cookies, except strictly necessary ones, can be placed on the user’s device until they provide explicit consent.
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3. Granular Consent - users should be able to choose which types of cookies they want to allow.
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4. Easy Withdrawal of Consent - visitors must be able to withdraw their consent or modify cookie preferences as easily as they gave it.
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5. Cookie Policy - your site must have a clear and accessible Cookie Policy explaining in detail how cookies are used, their purpose, and how users can manage them.

Here at Consentmo, we cover everything mentioned above with our all in one compliance solution for your Shopify store.

Implement Technical and Organizational Measures

• Data Protection by Design and Default: Integrate data protection measures into the design of business processes and systems.
• Security Measures: Use appropriate encryption, access controls, and regular security audits to protect personal data.
• Incident Response: Develop and maintain a detailed incident response plan to address data breaches swiftly and effectively.

Respond to Data Subject Requests

• Access Requests: Answer ASAP data subject access requests, providing individuals with copies of their personal data.
• Rectification and Erasure: Allow users to correct inaccuracies and request the deletion of their data where appropriate.
• Portability and Restriction: Facilitate data portability requests and ensure data processing restrictions when requested by individuals.

Conduct Regular Data Protection Impact Assessments (DPIAs)

• Risk Identification: Identify potential risks associated with data processing activities and assess their impact on data subjects’ privacy.
• Mitigation Strategies: Develop and implement strategies to mitigate identified risks.
• Ongoing Review: Regularly review and update DPIAs to reflect changes in data processing activities and regulatory requirements.

Train Employees on GDPR Compliance

• Awareness Programs: Conduct regular training sessions to educate employees about GDPR requirements and their responsibilities.
• Role-Specific Training: Provide specialized training for employees who handle personal data.
• Regular Updates: Keep employees informed about changes in data protection laws and best practices.

Following these practices will help your business stay compliant with GDPR. This will protect you from harsh fines, legal action, reputational harm, and operational disruptions.

Conclusion

The GDPR is a comprehensive regulation that sets high standards for data protection and privacy. It is essential for businesses that operate in the EU to comply with the GDPR and the specific compliance regulations outlined by each member state. Failure to comply can result in substantial fines, legal action, and reputational damage. But compliance with GDPR isn't just about avoiding consequences, it's about protecting the privacy and data of your customers.

By complying with GDPR, your business can build trust with customers, demonstrate your commitment to privacy, and avoid the negative impacts of non-compliance. So, if you're a business operating in the EU, make sure that you take GDPR compliance seriously and take the necessary steps to protect the personal data of your customers.

To ensure your customer's data safety and be in compliance with the GDPR, don't forget to download the Consentmo app for your Shopify store. To keep yourself up to date on all of the ways to be compliant, follow us on our social media channels (LinkedIn & X). For further questions, don't hesitate to contact us via chat or email, or simply check our FAQ page.