GDPR compliance has many benefits of its own: access to European markets, increased consumer trust, and an overall decrease in anxiety and uncertainty. It can also be a requirement for receiving funding from investors. For many organizations, however, GDPR compliance is not so much about enjoying the positive benefits as it is about avoiding the negative consequences of non-compliance, i.e., fines.
For those organizations weighing the risks and benefits of non-compliance, it’s important to understand the potential costs of GDPR fines, how those fines are calculated, and how prevalent enforcement is.
Article 83 of the GDPR gives member states the authority to enforce the privacy law through administrative fines. The fines are “administrative” because they are imposed directly by the supervisory authority (commonly called a data protection authority, or “DPA”) without any requirement to prosecute the case before a court. This makes for quicker, more efficient enforcement, though organizations are still entitled to appeal their cases to a traditional court.
The fines can be broken into two tiers: standard maximum fines and higher maximum fines.
The standard maximum fine for GDPR violations is €10 million or 2% of the organization’s total annual worldwide turnover, whichever is higher. For the most part, this level of fines is imposed for failures to abide by the general responsibilities of controllers and processors, including:
The higher tier of penalties allows for doubled maximum fines—€20 million or 4% of the organization’s total annual worldwide turnover, whichever is higher. These fines can be imposed for violations of:
While the GDPR does not have a specific formula for calculating fines, it does identify a number of criteria that DPAs should take into consideration.
A GDPR violation only has a cost if data protection authorities are actually enforcing it. Though it may come as a surprise, GDPR enforcement is quite robust. Each member nation’s DPA enforces the privacy law within their borders, and they are targeting organizations of all sizes, from small websites to municipal governments to giant tech companies. The fines themselves range from tiny (as little as €50) to massive (Amazon Europe was fined €746 million in 2021). Though they vary based on the country and the organization, most fines fall somewhere between 1000–100,000 Euros. You can see an up-to-date list of fines across Europe here.
Planning for GDPR compliance is a far better solution than bracing for an expensive fine in the future. Even a €1000 fine likely involves thousands in legal fees and many hours of lost time—and in the end you still have to get your business compliant afterward or else face even steeper fines.
Many smaller organizations avoid GDPR compliance because they don’t have the expertise to tackle it on their own or the resources to hire a specialist compliance firm.TrueVault Polaris combines the cost savings of in-house compliance with the reliable expertise of hiring outside experts. With an interface similar to online tax software, you can follow the guided questions and onboard your business in as little as a few hours. Polaris also provides tools like privacy request workflows and automations to make ongoing compliance a simple task. Contact us today to see a demo.
Disclaimer: This content is provided for general informational purposes only and does not constitute legal advice. This content is not a substitute for obtaining legal advice from a licensed attorney. The information on this page may be changed without notice and is not guaranteed to be complete, correct or up-to-date, and may not reflect the most current legal developments.