Blog » 5+5 THINGS AFFECTING HOW MUCH YOU PAY FOR A GDPR BREACH
5+5 THINGS AFFECTING HOW MUCH YOU PAY FOR A GDPR BREACH
12 February 2018
Data protection authorities can impose administrative fines up to 20 Million Euro based on the EU GDPR. But what affects the actual amount that you have to pay in case of infringement? And how can you minimize the risk of an astronomic penalty? We gathered some hints in our latest article.
The Article 29 Working Party recently published guidelines on penalties under GDPR.
First, it must be noted that the guidelines stress that penalties are only one of 10 (ten) corrective measures, that can be applied by data protection authorities.
For this reason, the 5+5 criteria below are not only considered when calculating the amount of the penalty, but also in cases, when the data protection authority assesses, whether penalty or other corrective measure should be applied.
We can put these assessment criteria in two groups: in the first there are those which are connected to the breach itself, while in the second one we find those which relate to the wrongdoer data controller or data processor.
First at foremost, the type of infringement is a starting point when assessing sanctions and fines.
In case of a minor, administrative non-compliance with GDPR, the penalty cannot exceed 2% of annual turnover or EUR 10 Million of your company, while more serious infringements, like the breach of basic principles of data processing, or infringing natural persons rights will lead to the higher thresholds, which is 4% or annual turnover or EUR 20 Million.
The number of data subjects affected by the data breach is important, because it is not the same when there is one isolated case, or when the infringement concerns more hundred, let alone, more thousand private individuals.
It is also important, whether any damage was caused or likely to be caused by the data breach (e.g. bank account details, or health information was leaked), and if yes, what is the extent of the damage.
The duration of the breach must be also taken into account, because a one-time breach will be judged differently than a continuous breach, lasting for more months or even years.
The type of personal data affected by the breach, because the infringement concerning sensitive personal data (eg. health-related data) is always more serious than a data breach relating to other not qualified data.
It goes without saying that intentional data breaches must be judged more seriously than negligent ones. It can be a telling fact, when the top management of the company explicitly or implicitly allowed the data breach, or disregarded the advice of data protection officer. This is the case, if the data breach served the purpose of gaining business benefits (e.g. achieving a market position, etc.).
The organizational, technical and security measures executed by the data controller can influence the degree of responsibility, the consideration of these must be judged on the basis of industry standards and on “best practices”.
The cooperation with the authority by the data controller, and the notification of data breach from its own motion are circumstances that can decrease the amount of the penalty.
The fact that the data controller has done measures mitigating the consequences of the data breach (.e.g the notification of data subjects, etc.) must be considered as mitigating circumstance.
Last, but not least, the eventual earlier data breaches committed by the data controller, or non-compliance with or disrespect of earlier corrective measures imposed by the authority will be considered as aggravating circumstances when calculating the amount of fines.
As you can see, at least half of the 10 assessment criteria depend only on you, on your actions taken (or not taken) before and after an eventual breach of the GDPR.
The good news is that you can dramatically minimize the risk of an astronomic penalty with a careful preparation, and with an honest, cooperative and proactive crisis management, on the basis of policies adopted during your GDPR compliance.
So, it is high time to start your GDPR compliance project!
Hungary: Steps Towards Differentiating Between Domestic and International Procedural Public Policy
Drawing a well-defined line of demarcation between domestic and international public policy when enforcing foreign arbitral awards sends a clear pro-arbitration message from national courts in any jurisdiction. Does Hungarian case law come close to this level of sophistication? This post analyses this question in the context of procedural public policy, and it does so based on two recent appellate court decisions rendered in the context of enforcement of arbitral awards in accordance with the New York Convention.Read more »
EU ISSUED NEW GDPR STANDARD CONTRACTUAL CLAUSES – WHEN AND HOW TO USE THEM?
During summer 2021, the European Commission published two new "standard contractual clauses" on data protection regulation, which can be applied on the one hand, to the legal relationship between data controllers and data processors covered by the GDPR , and to the transfers of personal data to third countries, on the other. In this article, we answer the questions: what these SCCs regulate, how do they differ from the previous SCCs and how can your company use the new SCCs?Read more »
CAN THE NON-COMPETITION AGREEMENT BE VALID WITHOUT A PRECISE COMPENSATION IN HUNGARY?
The non-compete agreement may provide protection of the legitimate economic interests of the employer even after the termination of employment relationship. However, the Hungarian Labour Code lays down strict requirements for the agreement. In our article we analyse a recent decision of the Supreme Court about the importance of the precise determination of the compensation, so you as an employer can conclude a valid non-compete agreement.Read more »