What does GDPR mean for Start-Ups?
General Data Protection Regulation has become a concern for many start-ups, these days. Whether you are just yet to launch or have started your business already, but if you haven’t got everything in order, this is something more relevant than ever.
If you are a start-up, the GDPR (General Data Protection Regulation) should make you think about how you manage your data in a transparent and accountable way. It is crucial to ensure that you have put the right systems in place to manage user data securely.
Despite the initial effort, GDPR can be a good thing. Today, where iterative development has become so popular, this regulation forces us to pay attention to the undeniable fact that we are responsible for people’s personal data. It forces us to think about designing the data lifecycle in a minimalistic and responsible way.
Consequences for Non-Compliance
When discussing the GDPR, we must discuss the biggest motivating factor, its compliance.
Consequences
If you are not aware, you must know that the consequences of non-compliance are quite steep. A first-time violation may or may not get you a warning, but if you fall within the “may not” category, it may cost you up to 20M Euro or 4% of your global revenue (whichever is more). Also, you can be audited that can result in the company being barred from making use of valuable data. If some aspect of the data lifecycle is found to be in violation, you will be open to lawsuits, as the General Data Protection Regulation gives users the right to file a complaint and seek damages where their data is not handled in a compliant way.
So, there are some reasons for the panicked scramble that occurred in the weeks leading up to 25th May 2020.
Does it apply to you?
This is likely to apply to you too. The GDPR may apply in any 1 of these scenarios:
- If your base of operations is in the EU;
- If you are not established in the EU, but you offer goods or services to the people in the EU
- If you are not established in the EU, but monitor the behavior of people in the EU.
How should Start-Ups think about the GDPR?
- Going legal and avoiding risks: Start-ups are bound to comply with the General Data Protection Regulation in a proactive manner based on the proactive responsibility principle proclaimed under the regulation. In the current situation, you can no longer wait until a security breach occurs to comply with the regulation. You have only 72 hours to notify the regulator and in some instances the data subject, of any breach. Also, the regulation imposes high penalties in case of breach of such laws, which is a great risk for any company, in case of non-compliance. Start-ups need to start seeing GDPR compliance as an opportunity to assess the risks in the processing of data.
- Attracting investors: General Data Protection Regulation has a deep impact on how most companies operate and has also, radically changed how start-ups receive investment. Investors have been looking profoundly if the premises of the start-up breaches GDPR. Essentially, they have been highlighting if the GDPR will impact customer behavior considering the start-up’s business model and affect its viability. For instance, with the right of data portability and the right to be forgotten, customers will gain power in the handling and sharing of data, thus making free monetization of such data more difficult. Investors are not only considering the level of compliance of the start-up with the GDPR but also if the business development strategy that it uses is viable in a post-GDPR environment.
- Security for your business: Under the General Data Protection Regulation, Organisations have to implement appropriate measures for the security of personal data. In the current scenario, when cybersecurity attacks have grown exponentially and posed a real threat to data security, start-ups are not exempt from this scenario and can be greatly impacted. Unprotected wi-fi networks, weak passwords, malware, encrypted emails, and data and untrained employees can all pose a risk to data security. Start-ups should manage their GDPR compliance in order to avoid data being compromised, which may affect the continuance of their business.
- Protecting reputation while working with trusted partners: Start-ups always think big, therefore, it’s time to look after their reputation to that end. The GDPR requires companies to share the personal data of their customers with trusted partners called data processors. These Organisations provide services to companies that entail having access to their personal data, like cloud storage services. To become a trusted partner, they need to comply with the General Data Protection Regulation. In case of a security breach, cyberattack, or non-GDPR compliance, either by the start-up or any company that provides services to it, the market reputation can be damaged. Dealing with trusted partners that meet General Data Protection Regulation requirements helps in building a better reputation and also, gives start-ups a competitive advantage.
What kind of Data should Start-Ups pay attention to?
The GDPR specifically refers to personal data, which means any information relating to a natural person that can be used to directly or indirectly identify the individual like name, ID, location data, photos, email addresses, IP addresses, and so on. The scope of General Data Protection Regulation protection extends to any person in the EU. This includes users, employees, vendors, partners, customers, and even members of the general public. Therefore, start-ups should not only manage user data responsibly, but they must also pay attention to the privacy management within the Organization.
General Data Protection Regulation may cost you more up-front, but it can give you the competitive advantage of starting things right, mitigating risk, and saving money in the long-run.
Neumetric, a cybersecurity services, consulting & products Organization, can help you reduce your security cost without compromising your security posture. Our years of in-depth experience in handling security for Organizations of all sizes & in multiple industries make it easier for us to quickly execute cost-cutting activities that do not bring value to you, while you continue focusing on the Business objectives of the Organization.
