GDPR compliance helps businesses to ensure transparency, build customer trust, enhance data security, and avoid fines of up to €20 million or 4% of turnover. Many companies such as Amazon, LinkedIn, Clearview, and Netflix among others, have faced significant fines due to data protection failures.
E-commerce businesses process large amounts of personal data, including contact details, payment information, and browsing history, requiring data protection. By implementing strong data protection practices and security measures like encryption and access controls, businesses could reduce the risks of breaches and cyberattacks.
GDPR compliance for e-commerce businesses demonstrates commitment to protecting customer privacy, and encouraging continued customer relationships, giving businesses a competitive advantage over those that are not GDPR-compliant.
Here are seven actionable steps that may help e-commerce businesses navigate GDPR compliance effectively.
Conduct a data audit
When deciding to work towards GDPR compliance in e-commerce, it is important to start by conducting a comprehensive inventory of data collection processes.
The steps to carry out the audit could include:
- Identify all personal data categories collected, such as contact details, payment details, and activity logs, and the granular purposes this collection serves. Determining the retention period is important, as the GDPR does not allow indefinite retention.
- Review how and where personal data is collected and stored, whether on cloud servers, local databases, or third-party platforms. Regularly review third parties and minimize retention periods, with clear specifications on when data will be securely deleted. Additionally, document the security measures implemented to protect the data.
Access consent management
Access to customer data can be limited to authorized employees, IT administrators, and secure third-party providers based on a need to know basis.
Consent for cookies can be effectively implemented through a cookie banner, allowing users to manage or withdraw consent anytime. Use clear opt-in mechanisms for newsletters, cookies, and marketing, avoiding pre-checked boxes. Maintain consent logs for audit compliance, ensuring each data use has separate, revocable consent without affecting core services.
Review and update privacy notice
A companies’ privacy notice should be clear, easily understood, and transparent to ensure GDPR compliance and build customers’ trust. The privacy notice should clearly state:
- What data you collect and why (e.g., personal details, payment information, browsing behaviour),
- How data is being used,
- Explain purposes of data collection and processing, and
- How customers can exercise their rights, such as requesting data deletion or correction.
It is important to regularly review and update one’s privacy notice in order to reflect any changes in data collection, processing, or legal regulations to maintain compliance.
Enhance security to protect customer information
With the rise of cyber attacks worldwide, protecting personal data is an essential aspect of GDPR compliance for e-commerce businesses. Customers trust businesses with sensitive information, payment details, address, and browsing history. Implementing good data security measures will help reduce data breaches. Implementing strong data security measures reduces breaches, while a structured response plan ensures quick recovery and minimizes damage.
To minimize security risks, e-commerce businesses may implement:
- End-to-end encryption: Encrypting sensitive customer data both in transit at rest may prevent unauthorized access. This ensures that unauthorized individuals cannot read the data, even if intercepted, without the correct encryption key. It could be a standard protocol for all online transactions.
- Multi-factor authentication (MFA): Access control may require additional verification steps, such as one-time passwords (OTP) or biometric authentication. This process will reduce unauthorized logins.
- Regular security audits: This could be conducted to identify vulnerabilities through routine system checks. These assessments may help prevent data leak and ensure GDPR compliance.
- Access control & monitoring: Role-based access control (RBAC) which restricts users based on predefined role, to ensure that only authorised personnel have access to sensitive personal data.
Investing in robust data security could create a security plan which protects customers and also ensures GDPR compliance in all operations.
Offer employees training
Employees are first in line of defence when talking about data protection. Regular comprehensive GDPR training is important for e-commerce businesses. Breaches occur due to human error, such as mishandling sensitive data or falling for phishing scams. The employer is responsible for ensuring that employees are well-trained on data protection and compliance requirements.
Businesses should provide ongoing training and workshops to regularly update the employees knowledge on data protection, evolving threats, and regulatory changes to raise awareness within the organization.
Establish data subject rights procedure
Under the GDPR, data subjects have rights, including access, erasure, rectification, and objection to control of their personal data.
E-commerce must have clear procedures on how to handle and respond to these requests efficiently. GDPR compliance requires a response within one month-delays or non compliance can lead to fines.
To ensure compliance, businesses may:
- Appoint a data protection officer (DPO) according to the European commission or an internal team with the guidance of a DPO to monitor compliance and data protection issues. “It is much easier and cost effective” to appoint an external DPO.
- Create a clear and accessible process for handling data subject requests, such as an email address or request form on the website.
- Implement automated tools to manage and track data subject requests within the required time frame.
- Keep records of all requests to demonstrate compliance if audited.
Review third-party agreements
E-commerce businesses sometimes utilize third-party vendors, such as payment processors, cloud storage providers, and marketing platforms, to handle customer data. Therefore, it’s crucial to ensure these vendors comply with data protection regulations to safeguard customer information and avoid potential risks.
Under the GDPR, having a data protection agreement with a third party vendor is required to comply with data protection regulations if the vendor processes personal data on your behalf.
Here are steps that could be considered to manage risks associated with third-party vendors:
- Identify all third party vendors that process customer data and assess their data security measures.
- Ensure that all vendors handling personal data have existing supplier agreement, outlining responsibilities, security measures, and data processing activities.
- If a vendor transfers data outside the EU/EEA, ensure they follow GDPR requirements
- Regularly review vendor policies, conduct security audits, and ensure that the vendors comply with GDPR requirements.
Conclusion
By implementing these seven actionable steps, e-commerce can mitigate risk, protect customer data, avoid penalties, and build trust.
Hiring an external DPO officer in the absence of an internal data protection team or to advise and provide competent GDPR support to the internal DPO, will ensure proper compliance in line with the GDPR, and gain a competitive advantage in the market.