The GDPR Impact: Five Years of Data Privacy Compliance for E-commerce Brands

The significance of the European Union’s General Data Protection Regulation (GDPR) is now clear five years on, and its far-reaching implications for e-commerce brands. The GDPR, hailed as the toughest data privacy law globally, has not only changed how businesses handle personal data but also inspired data privacy regulations worldwide. The GDPR also has had key consequences for e-commerce brands, who collect a huge amount of consumer data.

GDPR Basics and Enforcement

The GDPR, which took effect on May 25, 2018, granted European Union residents essential rights over their personal data and imposed obligations on businesses to protect this data and ensure privacy. As a result, businesses worldwide, regardless of their size, that cater to European customers, must adhere to the GDPR’s uniform data standard.

Enforcement of the GDPR includes two levels of fines for violations. The first level involves fines of up to €10 million or 2% of a company’s annual global turnover, whichever is higher. The second level entails fines of up to €20 million or 4% of the company’s annual global turnover, whichever is higher. Since its implementation, European data protection authorities have issued 692 GDPR fines, amounting to a total of €293 million.

GDPR Impact: Key Stats

The GDPR has had a profound impact on data protection and privacy. Key statistics include:

• €293 million in fines imposed in Europe since GDPR’s implementation.
• Over 281,000 data breach notifications reported to date.
• Google received the highest GDPR fine of €50 million from the French regulator, CNIL.
• Fortune 500 companies spent $7.8 billion for GDPR compliance.

Data Breaches and Notifications

One of the significant consequences of the GDPR has been the rise in data breach notifications. Businesses have reported a 66% increase in data breach notifications from 2019 to 2020. In 2020 alone, more than 121,000 data breaches were reported, averaging 331 breach notifications per day. Notably, Germany, the Netherlands, and the UK reported the highest numbers of data breaches.

Brexit and GDPR Impact

Following Brexit on December 31, 2020, the UK is no longer regulated by the EU’s GDPR. Instead, the UK adopted its version known as the UK GDPR. However, EU GDPR may still apply to businesses with pan-European operations. An adequacy decision, currently under review, will determine whether data flow between the UK and the EU remains unrestricted.

Schrems II Decision

The Schrems II decision had a significant impact on international data transfers from the EU. In 2020, the Court of Justice of the European Union invalidated the EU-US Privacy Shield Framework, affecting over 5,000 US companies relying on it for EU data protection compliance. Businesses must now assess each data transfer to non-EU countries to ensure GDPR compliance.

COVID-19 and Privacy Concerns

The pandemic presented new challenges for privacy regulators in the EU. The collection of sensitive personal data, particularly health-related data, raised concerns about privacy and surveillance. Government agencies and tech giants developed contact tracing systems, but concerns were raised about their potential impact on privacy.

Cost of GDPR Compliance

Compliance with the GDPR comes with substantial costs, especially for small and midsize businesses. The estimated cost of compliance for Fortune 500 companies was $7.8 billion, while FTSE 350 companies spent $1.1 billion. Companies invest in data mapping, auditing, privacy lawyers, data security experts, and Data Protection Officers (DPOs) to ensure compliance.

Cookie Consent and GDPR Compliance

The GDPR’s most visible impact has been on cookies, leading to the proliferation of cookie pop-ups and banners. However, many cookie consent banners do not meet GDPR compliance standards. Studies have shown that consent banners often use dark patterns and do not provide users with genuine choices.

Conclusion

Over the last three years, the GDPR has reshaped data privacy compliance, setting new standards for businesses worldwide. It has resulted in significant fines and increased data breach notifications, underlining the importance of data protection. Brexit added complexity to the GDPR landscape, with the UK adopting its version of the regulation. The Schrems II decision changed how businesses handle international data transfers.

The COVID-19 pandemic raised unique privacy concerns, leading to increased surveillance and cybersecurity risks. GDPR compliance has proven to be a costly endeavor, particularly for smaller businesses. Cookie consent has been a focal point of GDPR enforcement, but many consent banners continue to fall short of compliance.

As an e-commerce brand, adhering to GDPR compliance is crucial to protect your customers’ data and maintain trust. Implementing GDPR-compliant cookie banners and data protection measures, such as using trusted solutions like PieEye, can help you navigate the evolving data privacy landscape effectively.