£4.7bn data reform cost savings branded pie in the sky

The Government’s insistence that the revised data reforms will unlock £4.7bn in savings for the UK economy have been slated by data protection professionals, amid claims the figures “have very little foundation in reality”.

While the revised Data Protection & Digital Information Bill has been welcomed by many in the data-driven marketing industry, there have already been claims that the proposals will weaken consumers’ data rights and water down accountability.

Will Richmond-Coggan, director and data protection law expert at Freeths, believes the new regulations are “more cosmetic than substantive” and warned that some firms may not fully reap the proposed benefits.

“Only those businesses without any international dimension are likely to be well-placed to benefit from any mooted relaxation of the regime. Certainly, the cost savings being suggested seem to have very little foundation in reality.”

For businesses with international operations, specifically in the EU, Richmond-Coggan reckons the new regime could force firms to operate separate compliance programmes that will likely burden them with higher long-term costs.

“Any businesses who operate both in the UK and in the EU will either adopt a uniform approach, which will ultimately be driven by the more stringent rules – wherever they originate – or try to operate separate compliance programmes in different jurisdictions, which will only add to costs.

“Furthermore, if any divergence results in a disruption to EU-UK data flows – which fortunately looks to be unlikely – this will only serve to increase the compliance burden and associated costs.”

Legal experts from Gordons LLP agree. In a blogpost, the firm writes: “One important point to note is that organisations operating in both the UK and EU will be dual regulated, meaning they will have legal obligations to comply with both the UK regime and the EU regime.

“Whilst there are some mechanical nuances to being dual regulated, complying with the UK and the EU GDPR are very similar at present. As the UK moves to create its own legislation, further investment will be needed as well as a closer analysis of which processes can be streamlined and which need to be separated.

“It will be interesting to see what resources will be available to organisations to help them on their compliance journeys if the aim is truly to simplify data protection compliance and enable innovation.”

Although the Government has stressed that organisations who are currently compliant with UK GDPR will be able to comply with the new regime, the resource, time and cost for businesses could be significant, Gordons claims.

It goes on to point out that the Government’s Analysis of Expected Impact on the changes estimates reforms could boost the UK economy by £1.04bn over 10 years. This would increase to £1.45bn if adequacy is maintained. The Government is therefore estimating that if adequacy is revoked this will cost UK businesses £410m.

For Jeanette Burgess, a partner at Walker Morris LLP, the devil will be in the detail.

She explained: “The Bill still has a long way to go. While we know there will be changes to cookie consent requirements, it’s still not clear exactly how that will work. There was no mention of controls on data subject access requests, which we know many businesses are keen to see.

Burgess added that businesses have already spent a lot of time, money and effort ensuring data protection compliance under GDPR, and only time will tell whether the Government can truly deliver on its promise that the new framework will not be difficult or costly to implement.

She concluded: “Progress on the new Bill will also be closely watched in Europe. Much is made in the announcement about organisations no longer having to struggle with the barriers of the European regime. The government says the UK’s proposed new rules seek to ensure data adequacy, while moving away from the ‘one-size-fits-all’ approach of the EU GDPR. It remains to be seen whether the UK will be successful in navigating that balance between the two.”