The Impact of the GDPR on Outsourcing

Updated: 3 days ago


As of May 2018, Europe is covered by the strongest data protection regulations in the world. The General Data Protection Regulation (GDPR) was designed to create and enforce modernized laws that safeguard the personal information of individuals. Before the GDPR was introduced, the data protection rules in place dated back to the 1990s and were no longer effective in a climate of rapid technological changes. GDPR revises the ways in which businesses and public sector organizations manage customer information. It also enhances the rights of individuals and provides them with a greater level of control over their information.


The GDPR has a significant impact on both data processors and data controllers, thus making data protection and associated practices a critical issue for businesses. The increase of cybercrime has made it more important than ever to keep consumer protection and brand reputation in mind when considering security design. To achieve GDPR compliance, organizations must constantly examine the effectiveness of their security measures and continuously enhance by integrating best practices of personal data protection.


How the GDPR Impacts Outsourcing

Under the GDPR, data management is conducted by the “controller” and the “processor.” The controller determines how personal data of an individual is used. The processor manages the processing of the personal data on behalf of the controller. Outsourcing services providers serve as the data processors, while the organizations that outsource are the data controllers.


Only GDPR- compliant outsourcing service providers (regardless of their location) are allowed to process data pertaining to EU citizens. In cases of non-compliance with the GDPR, both the data controller and data processor are subject to fines of up to €20 million or 4% of the company’s global annual turnover in the most recent financial year (the greater of the two).


Outsourcing firms looking to do business with EU-based companies must enhance their policies around data security privacy. This will align them with GDPR and support the new standards around the GDPR and outsourcing.


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