Cookies and GDPR: How to avoid fines and protect your business?

In the digital age, personal data protection has turned from an abstract concept into an urgent need. Especially in view of the implementation of the General Data Protection Regulation (GDPR), which has set strict rules for business. Failure to comply with these rules can lead to serious consequences, including significant fines and irreparable damage to reputation.

Section 1: Cookies in the crosshairs of the GDPR

It may seem like a harmless cookie that stores your shopping cart settings in an online store and a serious document like the GDPR for Business have in common? In fact, the connection is direct and very important for every website owner to understand. After all, as you know, ignorance of the law does not exempt from liability.

1.1. What is the GDPR and to whom does it apply?

GDPR for businesses that work with EU citizens is not just a fashion trend, but a harsh reality. This regulation, which came into force in May 2018, aims to protect the personal data of EU citizens regardless of their location or place of data processing.

Who exactly does the GDPR apply to?

In essence, the regulations apply to:

• Companies that process data of EU citizens, regardless of whether they are located in the EU or not. That is, if your website is visited by users from Europe, you automatically fall under the GDPR.
• Any personal data that can be used to identify a person: name, email address, IP address, location data, online identifiers (cookies), etc.

The main provisions of the GDPR:

• Lawfulness, fairness and transparency: data processing must be carried out lawfully, fairly and transparently for the data subject.
• Purpose Limitations: data may only be collected for clearly defined and legitimate purposes.
• Data Minimisation: only the data that is necessary to achieve the stated goal should be collected.
• Accuracy: measures should be taken to ensure that the data is accurate and up-to-date.
• Storage limitations: data should not be stored for longer than necessary to achieve the purpose of processing.
• Integrity and confidentiality: measures must be taken to protect data from unauthorised access, processing, destruction, loss or damage.

It is important to understand that the GDPR does not prohibit the collection and processing of data, but sets clear rules of the game. Compliance with these rules is the key to the security of your business and the trust of your customers.

1.2. What data is collected by cookies and why is it important for the GDPR?

Cookies are small text files that are stored on a user’s computer or mobile device by a website. They are used for a variety of purposes, some of which are fairly innocuous and some of which may raise privacy concerns.

What data can be collected through cookies?

• Session data: information about the current user session on the site (for example, items in the shopping cart).
• Site Settings: language, region, font size and other settings that the user has chosen for the convenience of using the site.
• Analytical data: information about how users interact with the site, which pages they view, where they came from, which browser they use.
• Advertising data: information about the user’s interests based on their behaviour on the site and other sites, which allows you to show them relevant ads.

Why is this important for the GDPR?

The GDPR considers some types of data collected by cookies to be personal data, even if they do not contain explicit identifying information. For example, an IP address or unique device identifier can be used to identify a user in combination with other data.

Therefore, according to the GDPR, websites are obliged to:

• Inform users about the use of cookies and obtain their consent to the collection and processing of personal data.
• Provide users with the ability to manage cookies, including rejecting their use (except for those that are critical to the operation of the site).
• Ensure the security of the collected data and protect it from unauthorised access.

Failure to comply with these requirements can result in severe fines and other sanctions from regulators. Therefore, it is important to understand what data is collected on your website through cookies and take the necessary steps to ensure GDPR compliance.

Section 2: Lawful methods of data collection

Knowing that the GDPR’s watchful eye is not asleep and any cookie can be a stumbling block, a logical question arises: how can you collect user data without breaking the law? The answer is simple – to act exclusively in the legal field, using consent to the processing of personal data as your shield and sword.

2.1. Mandatory elements of the Cookie policy

A cookie policy is not just a formality, but an important document that is the key to GDPR compliance in the context of using cookies. It should be clear, accessible and, most importantly, comply with all legal requirements.

What elements should be included in a cookie policy?

Information about the types of cookies used on the website. It is important to clearly indicate what types of cookies are used (e.g. session, persistent, first-party, third-party), as well as their purpose – for analytics, advertising, improving the functionality of the website, etc.

The data collected by cookies and the purposes of their processing. You should explain what information is collected by cookies (e.g. IP address, browser type, pages viewed) and how this information is used – to personalise content, display targeted advertising, analyse user behaviour, etc.

Information about third parties that may have access to the data collected through cookies. If your website uses third-party cookies (e.g. Google Analytics, Facebook Pixel), it is important to indicate this in the cookie policy and provide a link to the privacy policy of these services.

The ability of users to manage cookies. The GDPR gives users the right to control cookies. It is important to provide them with the opportunity to refuse the collection of data using cookies (for example, through browser settings or a special tool on the website).

Accessibility and comprehensibility. The cookie policy should be written in plain and understandable language that is accessible to the average user. It should be placed in a prominent place on the website (for example, in the footer) and easily accessible from any page.

Regular updates. The legality and relevance of a cookie policy is a dynamic process, not a one-time action. It is important to regularly review and update it to take into account changes in legislation, as well as changes in the types of cookies used on the website.

Compliance with these requirements will help you avoid misunderstandings from users and regulators, and build trust in your brand.

2.2. How to obtain valid consent to data processing

Consent to the processing of personal data is the cornerstone of the GDPR. Without it, you are not allowed to collect, process, or use any information relating to your website users from the European Union. But how do you obtain this consent so that it is valid in the eyes of the law?

Types of consent:

• Explicit consent: This is a direct, clear and unambiguous confirmation by the user of their consent to the processing of their data. It can be obtained by:
  • Active action: for example, checking the box “I agree to the Cookie Policy” or clicking the button “Accept Cookies.”
  • Written statement: for example, signing a contract containing a clause on consent to data processing.
• Implied consent: this type of consent is more passive and based on the user’s activity. However, the GDPR sets clear requirements for obtaining implied consent, namely:
  • The user’s action should be unambiguous and informed. For example, continuing to use the site after a clear and understandable notice of cookie use may be considered as implicit consent.
  • The user must be given the opportunity to withdraw their consent at any time.

Practical tips for obtaining consent:

• Clear and simple: cookie and data collection information should be presented in simple and clear language, without legalese or complex wording.
• Transparency: users should clearly understand what data is being collected, for what purpose, and how it will be used.
• Voluntariness: the user’s consent must be truly voluntary. It is not allowed to use pressure tactics or manipulations to obtain consent.
• Documentation: it is important to keep records of consent from users to prove its legitimacy if necessary.

Following these recommendations will help you obtain valid consent to the processing of personal data from your website users and avoid potential problems with the GDPR.

Section 3: Risk mitigation and liability

Despite all efforts, the thought of GDPR fines can be terrifying for any business that works with personal data. And for good reason: non-compliance with the regulations can lead to serious financial losses and irreparable damage to reputation. How can you protect your business and sleep well knowing that you have done everything possible to protect personal data on your website?

3.1 What are the penalties for violating the GDPR?

The GDPR is not joking when it comes to personal data protection. The Regulation provides for GDPR fines for violations that can reach millions of euros and deal a devastating blow even to large businesses.

What kind of sanctions can be applied?

• Administrative fines: This is the most common type of sanction, the amount of which depends on the severity of the violation and can be as high as
  • Up to €10 million or 2% of annual global turnover(whichever is greater) for less serious breaches, such as failure to comply with data processing principles, lack of lawful basis for processing or failure to inform users properly.
  • Up to €20 million or 4% of annual global turnover(whichever is greater) for more serious breaches, such as processing data without the data subject’s consent, transferring data to countries that do not provide an adequate level of data protection, or failing to comply with data protection requirements.
• Other sanctions: In addition to fines, regulatory authorities have the right to impose other sanctions, including:
  • Issuing orders to eliminate violations;
  • Restriction or prohibition of data processing;
  • Obligation to notify data subjects of a breach;
  • Suspension of the company’s operations.

In addition to financial losses, GDPR violations can lead to:

• Reputational losses: information about the leakage or misuse of personal data can seriously damage a company’s reputation and undermine customer confidence.
• Legal action: data subjects whose rights have been violated have the right to take legal action to claim compensation for the damage caused.

Given all of the above, it is clear that GDPR compliance is not just a legal formality, but a strategically important task for any business that works with personal data.

3.2. How to protect user data and avoid GDPR issues?

Knowing what troubles can befall a business that neglects the GDPR, it is important to develop an effective data protection strategy. Here are some practical recommendations to help you avoid problems and keep your business running smoothly:

Technical measures:

• Ensure the security of your website: use HTTPS, regularly update software, set strong passwords and protect against unauthorised access.
• Encrypt sensitive data: encryption makes data incomprehensible to attackers, even if they manage to access it.
• Back up your data regularly: this will help you recover information in case of leakage or loss.
• Minimise the amount of data you store: don’t collect or store data you don’t need to achieve your stated goals.

Organisational measures:

• Develop and implement a privacy policy: clearly define the rules for collecting, processing, storing, and using personal data.
• Awareness of GDPR requirements: train staff who have access to personal data.
• Get explicit consent to data processing: use clear and understandable consent forms that do not contain small print or hidden conditions.
• Give users the ability to manage their data: give them the ability to view, correct or delete their data, and withdraw their consent to its processing.

Cooperation with contractors:

• Contract with data processors: make sure your contractors (e.g. hosting providers, email services) are also GDPR-compliant.
• Control the activities of contractors: regularly check how your contractors process personal data.

Maintaining documentation:

• Keep a record of data processing operations:Fix what data you collect, for what purpose, on what basis, to whom you transfer it, etc.
• Document consent to data processing:Keep records of when and how users gave you their consent.

Remember that personal data protection is an ongoing process that requires constant attention and improvement.

Important! This information is provided for informational purposes only and does not constitute legal advice. If you have any questions about the application of the GDPR to your business, please contact a qualified legal professional.

Conclusion

In today’s digital world, where personal data has become more valuable than gold, protecting personal data on a website is not just a to-do list, but a matter of business survival. GDPR, despite its complexity, provides clear guidelines on the way to secure user interaction.

Don’t risk your business and reputation. Contact Polikarpov Law Firm, and we will help you develop a comprehensive data protection strategy that meets all legal requirements and provides you with peace of mind and confidence in the future.