Ever since the General Data Protection Regulation (GDPR) was passed in 2016, the specter of humongous fines was on the horizon. Ominously, the law allows for fines up to 4% of global revenue. Considering that many companies entire profit margin is 5% of revenue, these fines have always had the potential to be crushing.
And now the Data Protection Authorities are delivering. Recently the DPR in Luxembourg issued a $888M fine against Amazon. Coverage has focused on the whopper of a number, which instantly put this fine in the top 5 largest fines ever issued against a company in Europe.
But still, most people still think if they aren’t in big tech, then GDPR probably won’t affect them too much. They couldn’t be more wrong.
Data Protection Authorities have already issued over $300M in fines before Amazon’s eye-wateringly large one. That includes $25M against British Airways; $40M against H&M; $25M against Marriott; $14M against Vodafone; $11M against the Austrian Post; and $3M against Deliveroo.
Yes, Deliveroo, the food delivery service, who didn’t provide enough information to their delivery drivers on how their work shifts were scheduled.
Every consumer-facing sector has been affected. Consumer goods, media, consumer tech, grocery retail, travel and hospitality…anywhere consumers spend money, they are finding that companies are doing all sorts of things that consumers don’t like.
How are consumers responding to all of these new insights about shady data practices and insufficient disclosures?
Unsurprisingly, trust in companies is eroding. Edelman, who have been studying trust for more than 20 years, found that trust is eroding across the world’s two largest economies (the US and China), and as these fines continue, trust will continue to erode.
This is a moment to lead a revolution in privacy, to restore trust. As consumers look to brands to play an even larger role in their lives – from pandemic relief to taking a stand on social issues – a company’s commitment to privacy will set it apart and drive durable growth.