Does your business need a "Data Protection Officer?"

Ellen Messmer

New data-privacy regulation for the European Union expected to gain approval as early as October of this year would break new ground by requiring businesses selling goods and services to European citizens to appoint a so-called "Data Protection Officer" to be in compliance with the new law.               

If passed and implemented as expected in the EU, there would be uniform data-privacy regulation for EU countries with a probable timeframe of 2016 to take effect in full, points out Carolyn Holcomb, partner and leader in the risk assurance data protection and privacy practice at PricewaterhouseCoopers (PwC).

One of the notable aspects of the drafted regulation is that it calls for businesses, regardless of whether they are EU-based or not, to appoint a so-called "Data Protection Officer" (DPO) if they sell goods and services or regularly monitor Europeans, or process data on them at certain levels.

The EU-envisioned DPO is supposed to be an expert in data-privacy law and must be given a highly independent position in the business reporting to the top level of management. Under the draft of the law, the DPO is envisioned as a four-year appointment (see graphic, below) who cannot be easily dismissed. There will be a lot of challenges for companies around this DPO question, says Holcomb, if only because there are likely not enough qualified DPOs available to meet what may be an upcoming surge in demand for them.

Text chart of data protection officer

"If you have European operations or customers, you are really thinking about it," she notes. Under the current drafted regulation, if a business processes data related to about 5,000 or more "data-subject" individuals in some way--it's emphasized this number could change over the course of the next few months--the business is supposed to appoint a DPO to assure compliance with the new law.

"This is the first time we've seen a mandate related to the concept of the DPO," says Jay Cline, principal in PwC's data protection and privacy practice. Countries such as Germany have sought to encourage the DPO idea through some granted regulatory advantages, but now there's the prospect that the DPO will be a requirement in terms of the anticipated new EU regulation, which is expected to supersede individual country data-privacy laws in place now.

Experts in data-privacy regulations are not in great supply though there is rising demand. According to PwC's estimate, slightly more than half of the Fortune 100 companies today appear to have a so-called "Chief Privacy Officer."

One of the most important professional credentials the CPO might have is known as the "Certified Information Privacy Professional" designation granted by the International Association of Privacy Professionals which offers global types of data-privacy accreditations. The CPO function, most often found in the largest companies, might be roughly analogues to what would be expected of an EU-styled DPO in assuring the business complies with relevant data-protection practices and data-breach laws.

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