Opinion

One year on, the GDPR has had a small legal impact, but a huge consumer impact

It's been just over a year since the GDPR was introduced, affecting any Australian businesses that have a presence in the EU or target EU consumers. Emarsys' Sebastian Kummel explains why the legal impact has been small, but the consumer impact big.

Since the General Data Protection Regulation (GDPR) was introduced in May 2018, marketers’ worries about its impact have slowly faded.

From a legal perspective, very little has happened. In Europe, a total of 59,000 incidents were reported to the data commissioners this past year, but only 91 fines have been imposed. The highest profile breach award goes to Google, which copped an AU$80m fine for violating the GDPR as a result of poor data consent collection practices. To date, as far as we know, not one Australian business has been on the receiving end of a fine.

The reason for this is two-fold.

It’s simply too soon for signification action, especially when it comes to fines for large cases.

Even in straightforward cases, where it appears obvious that a business is in breach, its national regulator has to request a written response from the data commissioner, which could take up to a month. Lawyers must develop a watertight argument before bringing it to court and, even then, accused brands have the right to ask for more time to prepare their case. Even in a ‘simple’ case, the process easily takes six months.

Secondly, some businesses, especially smaller ones, are still in the dark on what compliance actually looks like from a legal perspective. This is largely due to the trouble countries outside of the European Union, such as Australia, have faced in adapting the regulation to fit their own jurisdiction.

While less strict frameworks and laws exist, most of those countries are behind when it comes to implementing their own regulations, meaning brands still remain unclear on which systems, platforms and processes should be put in place to achieve data compliance and compliant marketing communications. It’s important to highlight that the GDPR applies to both businesses with an establishment in the EU and businesses that do not have a physical presence in the EU but are targeting EU customers.

From a consumer perspective, the impact has been huge.

Consumers are demanding brands take preventative measures and respect their right to privacy. They won’t interact with brands unless they trust them to be secure guardians of their data, in addition to providing them with the kind of brilliant customer experience that justifies holding that data in the first place.

Thanks to the GDPR (and Australia’s Notifiable Data Breaches scheme), plus high-profile incidents continuing to make headlines, consumers have a growing awareness of the value of their personal information and are tuning in to how organisations use it.

While there are significant financial penalties for not being data-compliant when targeting EU customers, much of the GDPR is also laying down the foundation for similar regulations in other countries. Therefore, early adopters of the GDPR will have a significant advantage and head start on their competitors in the future.

Marketers who have been successful in a post-GDPR world have revisited their digital marketing strategies and adapted their systems, platforms and processes. These marketers have approached the GDPR as an opportunity to cleanse and strengthen their databases, tighten up their privacy policies and procedures, and earn high-quality subscribers and registrants.

Clearly, businesses’ thoughts on data privacy and compliance will evolve as countries and consumers begin to interpret and enforce them more effectively. In the meantime, businesses, and especially marketers, should view the GDPR as an opportunity to identify and adjust core privacy principles and create a solid framework to help navigate uncertainty.

Sebastian Kummel is the professional services director at Emarsys

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