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What GDPR rules do small businesses need to look out for?

If you’re a small business owner in the EU, or dealing with customers in the EU, you’ve likely heard of the General Data Protection Regulation (GDPR). This regulation, which came into effect in May 2018, was designed to protect the personal data of EU residents and ensure businesses handle data responsibly. While GDPR is often associated with large companies, small businesses are equally subject to its rules. Failing to comply can result in hefty fines, so it’s crucial to understand the requirements.

But don’t panic! Here’s a guide to help small businesses navigate the essential rules of GDPR.

1. Know what constitutes personal data

GDPR applies to any information that can identify an individual, either directly or indirectly. This includes:

  • Names, addresses, and phone numbers
  • Email addresses
  • IP addresses
  • Payment details
  • Location data
  • Online identifiers (cookies)

Essentially, if you store or process personal data, GDPR applies to you. Be mindful of the types of data you collect and make sure you’re only gathering what’s necessary.

2. Obtain clear consent

One of the core principles of GDPR is that businesses must obtain explicit consent before collecting or processing personal data. This means:

  • No pre-ticked boxes: Users must actively opt in.
  • Clear, understandable language: Consent forms must be simple and explain what data is being collected and for what purpose.
  • Record keeping: You should keep a record of how and when consent was obtained.

If your business sends marketing communications, you’ll need clear consent to send emails or newsletters. The user must also be able to withdraw consent easily.

3. Have a privacy policy in place

Under GDPR, you’re required to have a privacy policy that explains:

  • What personal data you collect
  • How you collect it
  • Why you need it
  • How long you keep it
  • How users can access or delete their data

The privacy policy should be accessible to users (often linked in the footer of your website). It should be clear and easy to understand. Remember, you don’t need to disclose all your business secrets, but your customers do have a right to know how their data is handled.

4. Ensure data security

GDPR mandates that personal data be kept safe. Small businesses must implement appropriate security measures to protect against data breaches. This could include:

  • Encryption of sensitive data
  • Firewalls and antivirus software
  • Access controls to ensure only authorized staff have access to personal data

Additionally, if a data breach occurs, you are required to notify the relevant authorities (typically within 72 hours) and, if necessary, inform affected individuals.

5. Allow users to exercise their rights

GDPR grants individuals several rights regarding their data. As a small business, you need to be prepared to handle requests from customers who want to:

  • Access their data
  • Rectify incorrect data
  • Erase data (the “right to be forgotten”)
  • Object to data processing for marketing purposes

If a customer requests to have their data deleted, for instance, you must comply—unless you have a legitimate reason to retain it.

6. Data minimization

One of the guiding principles of GDPR is data minimization: only collect the data you actually need. For example, if you only need an email address for a newsletter, don’t ask for unnecessary details like a phone number. By limiting the amount of personal data you collect, you reduce the risk of non-compliance and data breaches.

7. Have a data protection officer (DPO) or representative (if necessary)

For most small businesses, appointing a dedicated Data Protection Officer (DPO) may not be required. However, if your business processes sensitive data regularly or on a large scale, you might need to designate someone to oversee data protection compliance. In some cases, you may also need to appoint a GDPR representative in the EU if your business is located outside of the EU but still serves EU customers.

8. Data processing agreements with third parties

If you use third-party services to process personal data—whether that’s for email marketing, accounting software, or cloud storage—you need a Data Processing Agreement (DPA) in place with them. This agreement outlines the third party’s responsibilities and ensures they comply with GDPR when handling your customers’ data.

For example, if you use Google Analytics, MailChimp, or Stripe, you’ll need to ensure these providers are GDPR-compliant and that you have the necessary contracts in place.

9. Training and awareness

As a small business, you likely have a limited team, but it’s essential to ensure everyone who handles personal data is aware of GDPR and understands their responsibilities. Regular training sessions or awareness updates can help prevent data breaches or mishandling of sensitive information.

10. Keep records of your data processing activities

Even small businesses need to maintain records of their data processing activities. This doesn’t mean you need a massive database, but you should be able to demonstrate how personal data is being used, stored, and protected within your business. Keeping proper records can help show your compliance with GDPR in case of an audit.

11. Understand the risk of fines

The penalties for GDPR non-compliance can be severe, with fines reaching up to €20 million or 4% of annual global turnover—whichever is greater. While fines for small businesses are typically lower, they still pose a serious risk. In many cases, the fine is proportional to the severity of the violation and your efforts to comply.

Final thoughts

While GDPR may seem daunting, breaking it down into manageable steps can help your small business stay compliant without overwhelming you. Start by understanding the personal data you hold, obtaining consent, ensuring data security, and respecting your customers’ rights. Implementing these practices not only keeps you compliant but also builds trust with your customers—something that can be invaluable to the growth of your business.

Remember, GDPR compliance is an ongoing process. It requires regular review and updates to your data practices, policies, and security measures. By taking these steps seriously, you’ll not only avoid fines but also demonstrate to your customers that you value their privacy and security.

If you’d like some help your marketing data processing, or for any other marketing requirements, please get in touch with Starlight Communications today.