What are the Consequences of a GDPR breach?

Have you seen the headlines about the consequences of a GDPR breach? The biggest fine so far was to Meta Platforms in 2023 for 1.2 billion Euros and the first prison sentence due to misuse of a customer’s personal information.

GDPR is a regulatory framework designed to protect the personal data of individuals within the EU. It mandates how businesses collect, store, process, and share data. Key principles of GDPR include:

Transparency: Companies must inform users about how their data will be used.
Accountability: Businesses must ensure compliance and maintain documentation of their data practices.
Data Minimisation: Only the necessary data should be collected and retained.
Security: Organisations are required to implement measures to protect user data from breaches and unauthorised access.

GDPR applies to any organisation that processes the data of EU citizens, regardless of the business’s location, making it a global standard for data protection.

TikTok hit the headlines in 2023 and were heavily fined due to a number of issues, including the default setting on accounts displaying personal information, such as email address and location. For the privacy and safety of 13 to 17 year olds this was seen as a major breach.

A GDPR breach occurs when personal data is exposed, lost, or accessed without authorisation. This can result from:

Cyberattacks: Hacking, phishing, or malware infections.
Internal Errors: Employees mishandling data or sharing it with unauthorised individuals.
Inadequate Security Measures: Failing to encrypt sensitive information or implement strong access controls.

Even unintentional incidents, like sending personal data to the wrong recipient, can qualify as a breach under GDPR.

The repercussions of non-compliance with GDPR are significant and can severely impact an organisation. Below are the primary consequences:

1. Financial Penalties

GDPR imposes hefty fines based on the severity of the violation:

Tier 1: Up to €10 million or 2% of the company’s global annual turnover, whichever is higher, for lesser violations (e.g., failing to maintain proper records).
Tier 2: Up to €20 million or 4% of the global annual turnover, whichever is higher, for major violations (e.g., lack of user consent or failure to report a data breach).

2. Legal Consequences

Individuals affected by a breach can file lawsuits against the organisation for damages. This can lead to prolonged legal battles and additional financial strain.

3. Reputational Damage

A data breach can tarnish a company’s reputation, resulting in loss of customer trust and potential business opportunities. Organisations known for lax data security often face reduced customer loyalty and negative press coverage.

4. Operational Disruptions

Investigations by data protection authorities (DPAs) can disrupt normal business operations. Companies may be required to halt certain activities until compliance measures are implemented.

5. Customer Loss

When customers lose faith in a company’s ability to protect their data, they are more likely to switch to competitors who prioritize data privacy.

To understand the gravity of GDPR breaches, let’s examine some notable cases:

British Airways (2018): A cyberattack exposed the personal data of 400,000 customers, resulting in a €20 million fine.
Google (2019): Fined €50 million for failing to provide transparent information about data processing.
Marriott International (2018): Hackers accessed 339 million guest records, leading to a €20.4 million penalty.

These cases highlight the importance of robust data protection measures and proactive compliance strategies.

Ensuring GDPR compliance requires a proactive approach. Here are actionable steps to mitigate risks:

Conduct Regular Audits Identify vulnerabilities in your data processing practices and address them promptly.
Implement Robust Security Measures Use encryption, multi-factor authentication, and firewalls to safeguard sensitive data.
Train Employees Educate staff about GDPR principles and best practices for data handling.
Appoint a Data Protection Officer (DPO) A DPO can oversee compliance efforts and act as a liaison with regulatory authorities.
Develop a Breach Response Plan Having a plan in place can minimise damage and ensure timely reporting to DPAs.

Final Thoughts

GDPR has raised the bar for data protection globally, placing accountability at the forefront of business operations. While compliance may seem daunting, the consequences of non-compliance—including financial penalties, legal challenges, and reputational harm—underscore its importance.

Talk to us about our Shield package for your cybersecurity and compliance needs.