Unlocking Compliance: Understanding the Significance of Data Retention in GDPR

The Essential Roadmap: Navigating Data Retention Policy and Schedule in GDPR Compliance

Storage limitation is one of the fundamental principles of the General Data Protection Regulation (GDPR). It requires that personal data should be kept in a form that permits identification of data subjects for no longer than what is necessary for the purposes for which the data is processed.

This means, for you as a company, not to be in a zone of violation of one of the fundamental GDPR Principles when keeping personal information collected from individuals for a specific period of time. 

This period is determined based on various factors, including legal requirements, business needs, and the purposes for which the data was collected.

The reasons for retaining personal data can vary depending on the company and the applicable laws and regulations. 

Here are some common reasons for data retention:

• Legal compliance: Certain laws and regulations may require companies to retain personal data for a specified period. For example, tax laws may require the retention of financial records, including customer information, for a certain number of years.

• Contractual obligations: If there is a contractual relationship between the company and the individual, the retention of personal data may be necessary to fulfill the terms of the contract or to provide ongoing services.

• Business purposes: Retaining personal data can be necessary for legitimate business purposes such as customer support, record-keeping, analytics, and research. It allows companies to maintain accurate historical records and track interactions with individuals over time.

• Security and fraud prevention: Keeping personal data for a certain period enables companies to detect and prevent security breaches, unauthorized access, or maybe fraudulent activities. It enables incident investigations and the protection of individuals’ rights and interests.

The specific types of personal data that are retained can vary depending on the company and its operations. 

Typically, personal data retained may include basic contact information (e.g., name, address, email), transaction details, communication history, and any other data relevant to the company’s relationship with the individual.

What steps should a business take to comply with this important GDPR principle?  

First, a company needs to establish a clear Data retention policy that outlines the purposes and legal basis for data retention, specifies the retention periods for different types of data, and ensures compliance with applicable privacy laws and regulations. 

Second, a company should consider implementing appropriate security measures to safeguard the retained personal data during its storage and disposal.

Third, it should prescribe a Data retention schedule as a documented plan that outlines how long a company should retain personal data in compliance with the regulation.

GDPR does not provide specific retention periods for every type of personal data. Instead, it emphasizes the principle of data minimization and requires companies to determine appropriate retention periods based on the purpose for which the data was collected and any legal or regulatory requirements.

The Data Retention Policy is a document that sets the high-level principles and guidelines for data retention and establishes the framework, while the Data Retention Schedule is a document that provides a detailed breakdown of specific data categories, retention periods, disposal methods, and operationalizes and implements the policy. 

Both documents are essential for effective Data management and compliance with legal and regulatory requirements.

Data retention schedule is generally an internal document specifies: 

• the retention period for each set of personal data;
• the rationale for choosing that period;
• planned actions once the retention period is over;
• a plan for regular retention actions, like deletion or archiving;
• in line specifications in the retention schedule.

As a document is a very important and has three main functions:

Serves as evidence: in the event of an investigation or supervision by the Data protection authorities, this document will assist you in ensuring that your company has a retention approach and that the same is implemented.

Operational function: this document will also assist you in case you are asked to respond to a data subject rights query from your customers or employees and ensure that personal data are deleted or anonymized.

Business function: this document will help your company mitigate the risk of a data breach and reduce the cost of keeping data that is no longer necessary.

Why shouldn’t a business overlook this rule?

Non-compliance with this principle individually but also in conjunction with other GDPR principles according to the GDPR Enforcement Tracker, has cost companies over 33 million euros in fines imposed by EU Data Protection Authorities by May 2023.

Other indirect costs for the companies due to non-compliance with this principle are dealing with the high risk of a data breach and huge costs of keeping unnecessary data. 

These costs on a company level are hard to imagine, and even harder to calculate. As an example, according to the IBM Security Cost of a Data Breach Report 2022, the average cost of a data breach incident for a company is around 4.35 million USD.

Therefore, to prevent facing penalties specified in the General Data Protection Regulation (GDPR) and other personal data protection laws, it is crucial for companies to align their operations with the principles outlined in the GDPR.

Consclusion

Compliance with the storage limitation principle of the GDPR is crucial for companies to avoid regulatory penalties, legal consequences, reputational damage, data breach costs, increased operational costs, and loss of business opportunities. 

To ensure compliance, companies should develop a clear Data Retention Policy that outlines the purposes and legal basis for data retention, specifies retention periods, and ensures compliance with privacy laws. Additionally, a Data Retention Schedule provides a detailed breakdown of specific data categories, retention periods, and disposal methods. 

By adhering to these policies and schedules, companies can mitigate the risks associated with non-compliance, protect individuals’ data rights, and minimize unnecessary costs and data breach risks.

How can we help you?

By simply signing up on our GDPRLocal Portal, you will gain access to a personalized service designed to help you achieve GDPR compliance. 

Additionally, you can take a look and purchase templates for essential documents like Data Retention Policy and Data Retention Schedule, which play a crucial role in guiding you through the process of attaining comprehensive GDPR compliance.