In rules-based regulation, all the rules are spelled out in advance, and the regulator is basically an automaton once the rules are set. In principles-based regulation, the rules are extensive rather than complete and you expect the regulator to have some lattitude (and, if the system is well designed, a mechanism of recourse if they do something stupid).
An advocate of rules-based regulation would say this can make regulators unpredictable and capricious. An advocate of principles-based regulation would say it is an important safeguard against "rules-lawyering" and regulatory capture (especially the kind that ties new entrants up in check-box compliance that doesn't actually affect your business because all the rules have been worked around).
A classic example would be the time PayPal tried to tell the UK regulators they shouldn't be regulated like a financial institution (which is a claim they successfully made in the US). They pointed to chapter and verse of the relevant law, and said that according to subparagraph 2.b.c(iii)... and the relevant regulator essentially told them "shut up, you keep consumers' money for them and will be treated accordingly". As a result, the worst "PayPal took all my money and I can't get it back" stories generally do not come from the UK. (And when they do, they are accompanied by referrals to the Financial Conduct Authority, who have teeth.)
You can approve of this way of working or not, but the GDPR is a principles-based regulation, and you'll have to engage with it on those terms.
I think the unfortunate thing is that, when the previous/existing incarnations of these protection laws were/remain unenforced, many assumed it was because of lack of "teeth". But those of us familiar with how these principles-based regulatory bodies work know that it's more about confusion and regulator apathy. Nobody here is watching the watchers. Instead, there's a bunch of people foaming at the mouth with pitchforks asking for more laws and dismissing alternative concerns as hysteria or not understanding how laws work. We should be discussing how to solve the problem, yet we continually devolve to discussing the government-led solution presumably because we feel helpless and can't consider better options.
The EU’s digital commissioner said in 2015 that the EU should use regulation to "replace today’s Web search engines, operating systems and social networks" with EU companies.[1]
And they've passed or proposed ridiculous laws like cookie warnings and link taxes. We have reason to be suspicious of their intentions.
1: https://www.wsj.com/articles/eu-digital-chief-urges-regulati...
Unfortunately, so might students of history. Ask anyone in the UK who was working in the freelance or contract world when IR35 was introduced.
In that case, too, the principle was reasonable enough: there was a loophole in tax law where you could decide you're a contractor instead of an employee and pay less money despite for all other practical purposes still being an employee, and this was being actively exploited by some people.
In that case, too, the reality was that most people working in the sector probably wouldn't be challenged by the authorities, not least because the enforcers had limited resources.
But in that case, too, a given individual's status was often unclear. While some of those who were deterred or subsequently received penalties really were engaging in obvious tax avoidance, other reports described crippling penalties for people whose arrangements appeared to have been quite reasonable but to have fallen foul of someone in government's dubious interpretation.
This led to substantial amounts of time and money being collectively spent by the freelance and contractor community incorporating new legalese into contracts and paying for advice and taking out insurance policies. An entire trade body was formed primarily to deal with this threat. Even today, those of us who take on any sort of individual contract or freelance work from time to time have to be careful not to say or do certain otherwise reasonable things, or to allow others to do so, for fear of tipping the balance or giving any appearance that might be subject to challenge.
And the irony is that while the law arguably had some effect initially in getting contractors to go back to being permies if they were just using it as a tax dodge, overall it appears that IR35 has raised very little extra tax revenue for the government. It turns out that the vast majority of contractors and freelancers were operating in that fashion legitimately and continue to do so, and most enforcement actions appear to fail to the extent that the government even tries any more. Nevertheless, the rules still hang like a sword of Damocles above the whole sector.
Which we know is definitely NOT the case for companies storing your data correctly.
This is a good point, but many people seem to forget that most misdemeanor criminal offenses in the US are punishable by fine and/or up to 30+ days in jail. People do not often get the jail time so most don't even think about it, but it is available as an option to the judge for things like repeat offenders.
Given that description, after a couple decades working in some and dealing daily with the acts of other agencies who which issue and apply regulations on the US, let me assure you that the regulatory system in the US is nothing at all like “rule-based” as you have described it.
Or you can just disengage with Europe all together, which is an obvious choice for many small to medium sized companies, given the risks and costs involved.
Or, you're fine with a competitor who isn't afraid of entirely reasonable international laws coming in and eating your lunch.
Then they'll try to come back... after their EU user-base was kicked out and forced to find alternatives.
Maybe they are trying a kind of best of both worlds approach?
The problem with this approach is if you run a large or small company or are a sole proprietorship or simply have a hobby site, you can't write off legitimate fears of heavy handed enforcement. No one wants to be the example.
In the former cases, if your company is how people are feeding and clothing their children, do you want to be the person who says "Oh well we tanked the company this year because weren't worried. Someone on the internet told us they'd be gentle! How could we have known they'd be serious about levying the maximum penalty!?"
If this law is "no big deal" or "so easy to implement" or any other version of the arguments proposed this week, it would not be causing so much concern. It's neither an unreasonable ask or a trivial one. People are being impacted in large ways.
I'm on my company's GDPA compliance team and it is serious business. Our European footprint is small but not insignificant. If we were an unreasonable bunch, we'd just shut the whole thing down and move on. The very expensive very well versed German legal counsel we're paying to help us do this right completely disagrees with what many are saying here. We have no reason to not believe them as they have a lot of experience with the German laws the GDPR is based on. We're paying them far more than the fines we'd see because we believe in doing the right thing. Ergo, we must take the "hard" regulator view rather than your "kid glove" view. Our lawyer's underlying point in every discussion is that this is really really serious business and that they're not fooling around. Adding to that is a GDPR like law is likely to be implemented in Canada and other jurisdictions in the future. We must be ready for that as well.
I think GDPR is great for consumers. I think we'd actually be in a better/easier place if it were a requirement in the US since everyone would have to follow the same rules. The problem is that implementing it takes time and effort to do well at scale. To not loose your competitive edge against other large competitors that do not serve the EU and can operate under only US law. These are real concerns that have nothing to do with the regulators and whatever their whims are.
So even if you're right, these are the real costs. You're going to be held accountable to the people you let down if you put your company in peril. You're going to be held accountable if you loose marketshare because you got this wrong and an unencumbered competitor outmaneuvers you. And most of all, you simply cannot assume the best case, kid glove, approach is what is going to happen. THIS is what people are frustrated with.
I do hope that the EU is fair and equitable (which is my belief) but it would be irresponsible for me to act as if that is the only possibility.
As for this part of your comment:
> If this law is "no big deal" or "so easy to implement" or any other version of the arguments proposed this week, it would not be causing so much concern. It's neither an unreasonable ask or a trivial one. People are being impacted in large ways.
It's no big deal if you already had a user centric approach to privacy, if that's novel then you will probably have to change lots of procedures and some software too in order to get things right, even so I've seen far worse from a compliance point of view, look into fintech or healthcare compliance for examples.
Consider, for example, how every major social issue devolves into a Constitutional litigation. Whereas in Europe people just vote on stuff.
And as to regulatory approaches I think you’d be surprised. European regulation is often quite conservative.
Come on, this is just scaremongering. Newsflash: If you run a business, you are already responsible for adhering to hundreds of other laws in which the fines could reach millions. But you don't see people running around screaming that the world is ending, because they know that the laws will generally be applied fairly, given that a large economy (like that of the EU) relies on just application of laws to maintain stability.
Running a business, like anything else in life, requires the ability to make reasoned choices from somewhat ambiguous data. And the data here is somewhat ambiguous for good reason - it's to prevent businesses from exploiting loopholes and rendering the law ineffective. If you are going to crank the anxiety to 10 every time a situation like this occurs, you probably shouldn't be running a business or handling others' data in the first place.
Source please?
> If you are going to crank the anxiety to 10 every time a situation like this occurs, you probably shouldn't be running a business or handling others' data in the first place.
I'm not running one right now. It's not the situation that give me anxiety, it's just that it no longer seems interesting to support European customer for a potential business if that imply that I risk that much over their information. They just removed a big bunch of potential customer for a potential company. I would already try my best to limit the amount of PII but there's many time you just can't.
I'm from Quebec. Here we have laws over lottery. You know what it imply? If you make a lottery here in Quebec, you need to follow some simple regulations (I personally know people that did it essentially for fun (not for profit)) so they are pretty easy to follow, and pay the taxes for the winner. You know what I had to endure each time I went on an online contest, a broad exclusion because it was just not worth it to follow theses regulations. It's crazy the number of contest where you could literally do CTRL+F "Quebec" in the rule and find our little province (nowadays I see more of "where law forbid it" or stuff like that, but I haven't try to participate for a long time on a contest either).
Do theses companies had too much anxiety for our regulation? None at all, they were some multi billions companies that did this. It was just not worth it.
That is a sweeping generalization and if you dilute and guess what the most probable reason for excluding Quebec was,- it's probably for the best. It was a shady contest to begin with.
The Canadian sweepstakes law and corresponding province laws are not that hard and costly to comply with as well. Look at the countless valid and non-scam contests present and available to our citizens. You, I and rest of us should be glad that rules like these exist since a there are people companies out there willing to part you with your hard earned money.
As an example, you just need to store my skill testing answer and if I get awarded a price, reset a flag that I need to fill out a new answer. In Quebec, you need to give monetary guarantees to make sure you pay out and give contest rules out to the bureau ahead of time. That is not a tall task. It's for the better if those shady contests did not want to participate
> Source please?
Tax laws come to mind for one.
Sure, they will probably don't give that fines, but they could, what if I run a small business that interferes with the activity of some other business run by for example someone that is friend or can corrupt the people in charge of doing the fines ? They will fine me for 20 million dollars, sure I can appeal, a normal trial in my country lasts at least 5 years, in this time I will probably go out of business...
The fact that they could it's a big problem, they should have specified a proportion between the size of your company and the maximum allowed fine.
But as I already said, the stability of the EU’s economy depends on fair application of the law. If the EU levies a 20 million Euro fine on a company with 20 million/year in revenue, the chilling effects of that action would cause much more than 20 million in damage to the EU economy. That should be blatantly obvious. Despite propaganda to the contrary, the EU has a very good record of behaving as a reasonable government entity, moreso than most. They’ve championed quite a few consumer-friendly pieces of legislation that have managed to not destroy the applicable sectors.
If you think this is a valid concern, I can only assume you’re just as worried about other outcomes that have insane, struck-by-lightning levels of unlikelihood, in which case you are not going to have the spare cycles to be able to successfully run a business anyway.
Tax code violations, for sure. Environmental regulations may also carry huge maximal fines. Some misdeeds can even lead to criminal prosecution and land you in jail (but generally, they won't, except for the worst of transgressions).
Note that the GDPR requires fines to be proportional to the offence. If you really worry about some regulator fining you for 20M euros just because they're having a bad day, you do have legal recourse available.
So yes, I do trust the EU and their history has proven that the aforementioned idea isn't a hollow one.
I'm 26, have always been Canadian and I never seen what you talk about there. It's disturbing that you had this experience.
The only fine I ever heard someone get where relative to the road and were mostly parking and speed tickets. Even then, I also don't know anyone that doesn't drive 120 kph on a 100 kph road and about the parking, the signs are pretty self explanatory (though they can become pretty complicated where there's more than one).
If you consider that you follow what any signs, well that would means you shouldn't get any of theses fines. Theses fines are also defined and you know what you risk if you don't follow the signs.
Now say the same about GDPR... pretty harder I would say.
People drive at 120 on a 100 road and that's alright even though cars kills thousand each year, much more than keeping your shipping information in a database, yet you risk a much bigger fine for keeping that information without following the "signs".
Not true.
https://www.legislation.gov.uk/ukpga/1971/38/section/25
> The fourth, fifth and sixth columns show respectively the punishments which may be imposed on a person convicted of the offence in the way specified in relation thereto in the third column (that is to say, summarily or on indictment) according to whether the controlled drug in relation to which the offence was committed was a Class A drug, a Class B drug or a Class C drug; and
https://www.legislation.gov.uk/ukpga/1971/38/schedule/4
Cannabis is currently class B, thus
> [F8 3 months or [F4 £2,500], or both].
(I can't lay hands on it at the moment but there are clear guidelines to UK judges on what constitutes reasonable fines for offences, such that it should be feasible for the person to actually pay the fine)
There's nothing that says IRS won't prosecute you if someone buys you a soda and you don't declare it as income.
Or that you won't be prosecuted by someone in the US if your blog has a copyrighted image and you don't receive a DMCA request that was sent to you.
See how ridiculous that sounds?
All fines can be administratively and judicially appealed.
For the rest of your life? Source please?
You can be put temporarily into a cell for plenty of stuff but that's temporary. A fine is pretty permanent and when it can be millions, well that's probably the end of your business too.
> There's nothing that says IRS won't prosecute you if someone buys you a soda and you don't declare it as income.
Isn't it simply paying back what you should have + interest? (with some threshold)
Paying taxes is already part of the cost of running a business too (and that's a pretty low cost for a startup, versus having an actual trained DPO).
> Or that you won't be prosecuted by someone in the US if your blog has a copyrighted image and you don't receive a DMCA request that was sent to you.
Which is exactly why you try not to put copyrighted image over your website. Most of the times PII isn't something you can just avoid for a business.
> All fines can be administratively and judicially appealed.
Any appeal represents a cost. A cost that you can't always support until the end.
At the end, it's all about the cost of the risk... that's it. GDPR seems a pretty high cost.
The tax laws are vastly more complex than GDPR. The maximum penalties for tax fraud seem to be $250,000 + cost of prosecution + 5 years in jail.
If you make a small mistake on your taxes, and the IRS notices, you will probably receive a warning and have to repay it with interest. If you make a negligent mistake, you may be in addition be fined a small percentage, like 10-20%, of the amount you failed to declare. You have to conduct very large scale and intentional tax evasion for the maximum penalties to apply.
The IRS could argue for and try to apply the maximum penalties for a lemonade stand, but they don't. And people go on with their lives, put in their best effort to comply, and can be confident that they will be treated fairly.
Again, people are assuming that this is the first and only directive that has fines associated with it. It isn't. You don't hear a lot of people talking about the three month prison sentences possible for CE marking, for example - because very few of them have been handed out and only for egregious violations such as unsafe machinery that has caused injury.
I want to stress that this is a major point of political polarization in Europe at the moment. Even if this claim is true, it warrants a clear and articulated defense.
It is irresponsible not to assume that if the law is written a certain way then at some point, the law can (and likely will) be enforced that way when it suits the government.
With the caveat that "the law" in this case isn't just the GDPR, it's the entirety of EU case law. GDPR exists in a particular legal context.
But fair enough, nobody should be trusted blindly. This is why we have appeals and legal avenues to create checks and balances. So in the context of this discussion, it's pointless. We don't have to trust them. If a fine looks disproportional, there are legal remedies. Up to the ECHR which is generally quite careful in it's decisions.
If you don't trust the EU's legal system, that's a different problem. One that rings a bit hollow, and doesn't really further the GDPR discussion.
GDPR 83.1: Each supervisory authority shall ensure that the imposition of administrative fines pursuant to this Article in respect of infringements of this Regulation referred to in paragraphs 4, 5 and 6 shall in each individual case be effective, proportionate and dissuasive.
Sounds very workable.
On that token, have you actually at all looked into how "proportionate" is interpreted legally? After all this isn't new and there are a vast number of regulations using the same legal language. Yet somehow business in Europe has not stopped. So prima facie your concerns are absurd, you have not brought evidence that there is an issue (or anything at all unprecedented really) and I have to wonder what motivates you.
As others have said, if you have no interest in complying with laws that protect my privacy, then it's appropriate for you to not do business here.
I'm assuming you speak English. Do you really think there's any lawyer in the EU, competent to litigate EU law, who doesn't speak near-fluent English?
(Actually, if the lawyer is from continental Europe, and you only speak English, they do speak at least one language you don't, but I'm guessing that's not what you meant.)
All state action is subject to judicial review, where proportionality is a big factor.
It‘s an aspect of due process that is being reviewed and enforced by every court, up to the constitutional courts.
Example: the German criminal code threatens „up to five years“ in prison for theft.
That does not mean that a first-time theft of a not-too-valuable object could get you five years. Impossible. But not written in the statute itself. But even if a court was mad enough to hand out such a sentence, the revision stage would be swift and without any uncertainty.
Actually, it‘s hard to conceive of a first-time theft-offender going to prison, instead of paying a fine or at least having the prison sentence suspended.
