GDPR - A Carrot and Stick Approach on Data Privacy

Data privacy has always been an important aspect of information technology and even more, since the recent rise of the digital world. Here, we talk about European Union's GDPR regulation and why it is considered the most comprehensive data protection regulation.

Pronoy Roy • Apr 19, 2021

GDPR logo

The innumerable Data Breaches of the 21st century have affected millions of people. Data privacy has become a prominent issue and one that cannot be ignored by anyone on the internet. Just look at this Guardian article that talks about the intricacy of Donald Trump’s Facebook ads campaign and how data collection played a role in his campaigning.

A statistic claims that only 27% of consumers completely understand how companies use their personal information, and 86% want more transparency. (Source)

The General Data Protection Regulation or GDPR was put into effect in May of 2018 to protect the data and rights of EU citizens. This is the most comprehensive data protection regulation that protects all EU citizens and levies heavy fines on organizations that don’t comply. The defining feature of GDPR is the broad scope and definition of the word ‘Data’ and its associated terms.

Photo by Sora Shimazaki

Photo by Sora Shimazaki

The wholly-encapsulating definition of data under GDPR is a glaring concern for most businesses that want to connect with users. From storing the name of your customer to processing any data that their virtual presence created, all of it comes under the purview of GDPR. As long as your business communicates with an EU citizen, GDPR compliance becomes mandatory, regardless of where your business is located.

For businesses that rely on customer chat, complying with GDPR can be a daunting task, especially if the business is working on solutions from scratch.

This is where a GDPR compliant chat solution comes into the picture. CometChat offers a GDPR compliant chat that makes sure that your company and your customers are protected. We are trusted by over 50,000 businesses who know that their user data is absolutely protected. If you’re looking for a chat solution that is trusted, just get started by clicking here.

Building Trust Through Transparency

A modern business works on developing a brand that customers trust. This goes beyond just producing a good product and deals. Building this trust starts from being transparent about your business’s activities. It is this principle that resonates throughout the regulation.

Businesses are required to be transparent with their customers about the data they’re asking for, the duration for which they’ll store it, the purpose they’re going to use it for, and about virtually all processes that the data may be used in.

Even though this transparency is a requirement that needs to be met to comply with GDPR, it does so much more. Transparency lets your users know that they’re in control of the data and that their interaction with your business, will NOT result in any wary organizations getting access to their private data. This trust-building process impacts your brand positively and this, in turn, improves user retention.

The Stick of Non-Compliance

Non Compliance with GDPR entails three central complications - enough to cripple a business of any size:

  1. Penalties up to €20 Million or 4% of the firm’s global revenue from the preceding fiscal year - whichever is higher.

  2. People of whom the data was misused have the right to seek compensation for damages.

  3. The company’s reputation takes a hit, making it untrustworthy to potential customers, not accounting for those already affected by non-compliance.

A three-pronged loss of business through non-compliance works largely as the stick from the carrot and the stick analogy. Between taking heavy losses from loss of customers, heavy fines, and drowning in lawsuits, non-compliance is not an option.

On the other hand, compliance also has its own rewards.

Complying for the Carrot

Being GDPR compliant itself affords you the boasting rights to top-notch security and data practices, enough to impress your customers. The real carrot lies in the options that being GDPR compliant brings you.

The first is that EU citizens can use the services that your business offers, opening up the possibilities to the entire continent. To top that, if you can claim that you’re compliant with the harshest law on data security in the world, more people from across the globe will choose to opt for your service against competitors who offer lower levels of data security.

The brand value is an asset to your firm and its value goes up when you comply with the regulations. An improved trust factor, a larger consumer base, and protection from potential breaches is a win-win situation.

The GDPR regulations are beneficial for both the business and consumer, making it a truly well-made policy.

Photo by Franck

Photo by Franck

GDPR and Third-Party Integrations

When it comes to scaling a business, chances are you’re going to contract third-party vendors and providers to integrate their services onto your platform. Take video-calling for example, instead of coding a peer-to-peer video calling software, there is a good chance that a business integrates a third-party video-calling software into their platform to offer that feature to their users. Doing so would expand the scope of data processing and increase the data nodes through which user data is passed. This increases the risk of liability and makes third-party integrations feel like they’re not a viable option.

Wait! That can’t be true!

That said, there is an easy workaround for this problem. As a business, your responsibility is to make sure that the third-party integration is also GDPR compliant. The onus of making sure that the data is not misused falls on the party that is considered as the ‘data controller according to GDPR rules. So, if you do decide to get a third-party integration, that organization becomes the data controller (but only for the data that they receive) and is then responsible for following all the regulations.

You can also check with them to make sure that they follow all the regulations, here is a small checklist that you can follow to make sure that your user data is protected:

  • Ask the vendor if they have a data protection officer.

  • Check if the vendor trains their employees and data handlers on privacy laws and the process of handling user data.

  • In the case of a data breach, make sure that the vendor informs you about it without any delay.

  • Consider asking them to encrypt all the data that is moved.

  • Make sure that the vendor shares with you all the documents showing that they’re GDPR compliant.

  • The vendor should be required to maintain a record in writing of all categories of processing activities carried out on your behalf and make such records available to you upon request.

Please make sure that you work with a legal expert on data privacy and GDPR laws to protect important customer data.

In-App Chat and GDPR Compliance

With in-app chat as a third-party integration on your platform, CometChat understands the need to make sure that your users' data are protected. To make sure that our in-app chat is compliant with GDPR, we conduct regular data audits along with a dedicated data protection officer (DPO).

Any exchange of information that is under the scope of data and data processing under GDPR is recorded and explicit consent is requested beforehand. Our team is also regularly trained on data privacy policies. These methods are used to keep our in-app chat the safest possible and keep our service absolutely transparent and GDPR compliant.

If you’re building an app for your business, it’s important to make sure it is scalable. And compliance with such regulations is one of the most aspects of scalability. Here’s a list of 5 factors to consider when building a scalable application

How CometChat Can Help

CometChat is a chat API that can be integrated into your platform within minutes. It’s easy to use and is GDPR compliant. The user data that our servers store such as name, avatar, id, and conversation history, etc. is to encrypt and ensure complete privacy of your and your users' data. We also provide a GDPR specific API to delete users’ information completely when they send you a request for it.

For extreme control over your customer’s data security we also offer customized On-premise Deployment for our chat solution. It gives you full control over the uptime of the integration along with full control of your data, security, and privacy. It’s mainly meant for companies that work with highly confidential customer data and aren’t allowed to host any data outside their own networks.

Read more about our Cloud vs On-Prem deployment models here.

If you’d like to learn more about what CometChat offers, or our data protection policies, reach out to us and we’d love to chat with you.

About the Author


Pronoy Roy is a technology enthusiast and especially passionate about the future of technology. He enjoys writing about modern technical applications that help solve real-world

Pronoy Roy


Pronoy Roy is a technology enthusiast and especially passionate about the future of technology. He enjoys writing about modern technical applications that help solve real-world problems.

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