GDPR compliance is important, first, because there are substantial penalties for non-compliance. The GDPR sets potential fines up to 4% of a company’s worldwide sales. In the third quarter of 2021, for instance, the EU levied over US$1.14 billion in fines, with the largest fines assessed against Amazon Europe and WhatsApp Ireland.
Second, publicity surrounding GDPR breaches and violations represents a significant reputational risk to businesses, especially since GDPR is concerned with sensitive personal data that many customers and employees consider crucially important.
Third, GDPR has become a model for other regions around the world, where authorities have borrowed elements of its rules for their own privacy regulations. For example, while GDPR and the California Consumer Privacy Act (CCPA) are different in meaningful ways, they share many similarities. In many cases, large global businesses will need to adjust their processes in similar or overlapping ways to address both. And similar legislation is pending in a multitude of jurisdictions all around the world.