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What Is GDPR and Why Does It Matter for Your Business

What Is GDPR and Why Does It Matter for Your Business

June 19, 2018
7 min read

GDPR is recognized as the most stringent privacy and security law globally. These four letters have caused an uproar among European businesses.

So, what is GDPR, and how can it affect your business? To answer these and many other questions, we've prepared a short guide to GDPR that will explain what every web development company and business owner needs to know about these regulations.

What is GDPR?

General Data Protection Regulation, or GDPR for short, was adopted by the European Council and the European Parliament on April 27, 2016. Authorities provided businesses with a two-year preparation period. It was the most significant change in the European data protection laws since 1998.

The goal of GDPR is not to punish businesses, but rather to protect individuals' personal information and expand their rights. The regulation aims to harmonize data protection laws across European countries and create a single reference point for national data protection agencies and regulators.

In light of high-profile data breaches worldwide, governments decided to strengthen data protection laws, which led to the birth of GDPR. Today, European companies must ensure GDPR compliance. Let's discover what it implies.

Should your business conform to the GDPR requirements?

Whether your business is located in the EU or caters to its citizens, it has to meet some requirements. You should be aware of the GDPR if you:

  • wish to create your own app for the global market
  • plan to expand your US-based company across the pond
  • are an app developer building mobile apps or web platforms for your clients
  • use targeted ads, social media, and other online marketing tools to attract new customers

How does the EU GDPR affect your business?

Given that the 1998 data protection regulation has become outdated, businesses must now comply with the up-to-date GDPR requirements. Here is a list of the most significant changes that GDPR brings to the business landscape:

  • The definition of personal data is now broader, encompassing not only names, contacts, financial, and medical information but also IP addresses.
  • Obtaining user consent becomes stricter. Your business should have a lawful reason to collect and store personal data. Additionally, you need to obtain separate permissions for each data processing activity you intend to perform.
  • Data subjects' rights become broader. Ensure the functionality to erase user data or transfer it to other services upon request. Users may also request corrections and detailed information regarding the ways their information is used.
  • Data processing documentation is required. Your company have to maintain detailed records of when user consent is obtained, its wording, the security procedures in place, and reports on all processing activities.
  • Data breaches must be reported within 72 hours. You will need to monitor data security and communicate even minor violations to the national data protection regulator or the user.

Can you ignore GDPR?

GDPR requirements may seem like a significant amount of work and it's quite challenging to implement the necessary changes. Should you hurry and strive to meet the GDPR requirements? Yes, you should if you don't want to face the draconian fines. According to GDPR, companies may be liable to pay fines ranging from 10 to 20 million euros or 2% to 4% of their worldwide annual turnover, whichever is higher. These fines are imposed if a company fails to address a reprimand or an order from the national data protection regulator.

Users can also file lawsuits against companies that do not comply with GDPR regulations and request compensation for the wrongful acquisition or processing of their data. In addition to the monetary loss from compensation payouts, companies may suffer significant business losses due to damaged reputation. The potential adverse impact for businesses that fail to comply with the new requirements can be as severe as bankruptcy.

How to ensure your business is GDPR-compliant?

There are five critical steps your company can take to address most GDPR-related needs:

Map your data

The first step to solving any problem is admitting that you have it. Therefore, begin your data processing changes by reviewing all the user data you store. Create a GDPR folder in your company's file system and document all categories of data you store. Map out where you obtain the information, how long it is stored, how it is processed, and with whom it is shared. The map you create should provide a clear picture of the data flow in and out of your system, and the critical points you need to address in order to ensure compliance with the new EU regulation.

Cover the lawfulness of data processing

Before processing the user's personal data, you need to ensure that you have the legal right to do it. If you outsource data processing to third parties, your contract should include GDPR-compliant clauses. Otherwise, you will need to find new partners. Your data processing is considered lawful if:


Update privacy notices

You need to review all your internal and external privacy notices and update them according to the EU regulations. Your notices should address the following questions:

  • Which data do you need to collect?
  • How will it be processed?
  • What is the lawful basis for each processing action?
  • How long will the data be stored?
  • How can users exercise their rights?

Implement the necessary means for data subjects to exercise their rights

Your company should have appropriate functionality and templates in place to address various scenarios. Design templates for user requests to review and correct their data. Consider engaging web development services to incorporate features for data erasure and consent withdrawal. Additionally, appoint a data protection officer responsible for promptly responding to user queries within a 30-day timeframe.

Employ internal processes to ensure data protection

It's not enough to give an appearance of GDPR compliance; personal data protection should be integrated into your company's daily processes. To achieve this, you will need to update data security measures and implement breach notification protocols. It is crucial for all employees to undergo data protection training to minimize the risk of accidental breaches.

How does GDPR affect online marketing?

Whenever you use personal data for marketing purposes, it is important to understand the distinct responsibilities of data controllers and data processors. As the data controller, you hold liability for data collection, storage, and usage. If you utilize tools like Google AdSense or Facebook, they act as data processors, handling personal data on your behalf. Most of Facebook's business services comply with GDPR, although you may still have obligations to uphold EU regulations. For example, if you upload a custom audience data file, you must inform users about the processing of their data and obtain their consent.

In the case of using Google AdSense to monetize your website, obtaining visitor consent for personalized ads may be challenging. There are rumors that AdSense might introduce non-customized advertisements as an option for webmasters to utilize. However, this could potentially reduce the effectiveness of the ads and subsequently decrease the value of views and clicks.

Is there a risk of users manipulating your business?


Some business owners express concerns about GDPR, as data subjects gain significant control over data processing companies. Users might jump at the chance to limit the use of their personal data or even manipulate business owners. There is a possibility that some individuals may sell their data to the highest bidders, similar to how companies have paid for email and phone directories obtained through shady channels.

On the one hand, companies may be willing to pay for high-quality data that can bring significant returns on investment. On the other hand, businesses have the right to refuse customers who try to sell personal data. It remains uncertain whether the majority of users are fully understand the extent of their rights under GDPR.

How does GDPR impact software development outsourcing?

At Freshcode, we are fully aware of the latest GDPR requirements and prioritize compliance with regulations in all our client projects. Whether your company is EU-based or serves European customers, you won't encounter issues with national data protection regulators. Our team developers and project managers are dedicated to seamlessly integrating GDPR-compliant features into your product. We are ready to answer any GDPR-related questions and provide guidance on updating your product to meet the regulations.

GDPR is not designed to make business owners' lives difficult; its aim is to prioritize and protect user interests and rights when it comes to data collection, processing, and sharing. By complying with GDPR, you can foster user confidence, secure their loyalty, and ensure your business possesses high-quality customer data. It is crucial to have transparent privacy and data processing policies in place and obtain consent before using personal data. Failure to do so can result in lawsuits and substantial fines.

If you are interested in learning more about how to choose a custom software development company for your startup or scale your existing business, please contact us or fill out the form below. You can also subscribe to our newsletter to keep the hand on the pulse of the latest IT trends.


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