Is Encrypted Data Subject to GDPR?

The debate on the EU data policy gets trickier when you try to discuss the GDPR encrypted data requirements. Most of the GDPR requirements are clear with regard to how personal data is defined; however, encryption demands a higher level of cyber and legal liabilities. This is why a question of the highest importance continues to crop up: Is encrypted data subject to GDPR?

The answer to this query significantly impacts the global business world. It determines which GDPR compliance route you are going to choose and how much you are going to invest in it. Additionally, it helps you to avoid massive GDPR fines in case of malpractice, even if the wrongdoing is unintentional. Encryption may sound modern, but the roots of this concept date back to ancient times.

Keep scrolling to learn more about GDPR encrypted data, its genesis, and the fine line between encryption and personal data!

1. What is Encryption?

Encryption is a data privacy and protection method that scrambles sensitive personal information so that only authorized parties can access the original. Ancient Greeks were the founders of many modern tools and techniques, and encryption is one of them. To be more specific, they developed cryptography which involves using simple cyphers to encode messages.

Of course, evolution brought technology that further upgraded this process and, as such, resulted in GDPR data encryption requirements. Encryption uses mathematical algorithms to convert plaintext to ciphertext. In other words, it randomizes personal data, making it impossible to understand without the encryption key. The algorithm forms the key that authorized parties use to encrypt data any time they need it.

The encryption key eliminates any chance for brute force attack, which is nothing else but a simple decryption attempt at trying to guess the key formula. Unfortunately, while modern technology has made auto-encryption possible, it has also facilitated decryption attempts. However, if you establish a private cloud-based database, the possibility for these attempts to be successful drops to zero again.

There are two types of encryption based on the nature of the key:

  • Asymmetric: This is a newer encryption method, which uses public key encryption. Asymmetric encryption uses two keys: one for encryption and one for decryption. The limitation of the key use is the main disadvantage of this type of encryption, as you can’t decrypt the data with the same key you’ve used for encryption. The decryption key stays private, while the other is shared publicly. The keys are used differently, giving this method its name.
  • Symmetric: The second encryption type uses only one key for both encryption and decryption, and it is strictly kept private. The symmetric encryption is the foundational technology behind the SSL, or Secure Sockets Layer, which is an essential part of Helpy customer support software. SSL is the encryption-based IoT protocol that guarantees the security, privacy, and integrity of your personal data. As it uses only one key, the symmetric decryption process is quicker than the asymmetric one, which is why it is more suitable for transmitting data in bulk.

Even though it takes longer to execute it, asymmetric encryption is safer as the whole process is more complex. However, the SSL technology uses both asymmetric and symmetric encryption due to their equally significant benefits. It uses asymmetric encryption to establish a secure company-client session and symmetric to exchange a large amount of customer data over the established secure session between the client and the company's server.

The SSL encryption may seem pricey, however, if you are a large organization that operates with millions of customer records, compared to the damage risk, that price is nothing.

2. What is Anonymization?

The level of encryption you want to achieve is your decision. When you opt for the anonymization level, you completely shield the Personal Identifiable Information (PII) of your customers as they are no longer identifiable to any party, including you.

Anonymization scrambles all unique PII, such as phone numbers or home addresses, making it impossible to re-identify the user. In fact, article 26 of GDPR defines anonymized data as “data rendered anonymous in such a way that the data subject is not or no longer identifiable.” The anonymized data can be less sensitive personal data such as customers’ preferences or purchasing habits.

You are allowed to keep it to build an overall insight into your target market’s interests; however, you can’t use it to track certain individual’s habits as you can’t create a customer profile with this limited personal information. Observing the risks, the anonymized data is the least vulnerable type of personal data, thus the least attractive to hackers as well.

However, you are not losing the data game. If a customer decides to practice their right to deletion, anonymization is of great help. For instance, Helpy can anonymize all the support tickets for that customer. This would eliminate the need to delete or scramble the data per each ticket, which can waste a lot of time. Now your customer support software can do all of that for you. Your only task is to click a couple of buttons.

3. What is Pseudonymization?

Pseudonymization is another technique for keeping your customer data safe. With this method, you keep customer data in two different categories, obscuring some key fields and eliminating the chance for the data to be reunited without the additional information. That said, pseudonymous data can be recovered when you find it suitable. Pseudonymization is a more liberalized way of processing and storing customer data, which allows you more freedom over data use for additional legitimate purposes.

Using this technique, it seems like you can have it all. You can keep customer PII safe while enjoying the benefits of analyzing their data for a better customer experience. This is definitely a more attractive way of encrypting data, which is why many industry leaders are trying to achieve this encryption level and ensure the security of their database. However, it comes with a risk, as your two data categories could fall into hackers’ hands, thus enabling them to identify your customer the same way you did!

That being said, companies can now enjoy the advantages of a more relaxed GDPR standard. EU officials permit the use of pseudonymized data beyond the legitimate purpose, or the purpose for which the data was collected at first. This mehod can play a crucial role in demonstrating GDPR compliance, and it is a favorable compromise between companies, consumers, and the law. Pseudonymization is a compliance technique that allows you to both respect the law and expand the use of stored data, making it a win-win!

4. The differences between Anonymization and Pseudonymization

At first glance, it may seem unnecessary to use pseudonymization. It begs the question: Why do you need pseudonymized data when you have anonymized data? They sound so similar, right? Not so much! These two concepts are actually highly distinctive. While pseudonymized data can become PII again, anonymization renders it unidentifiable forever. The hallmark for both types of data is their shared goal to make the data nearly impossible to recover.

Another difference can be found in the technology required by these strategies. These two data processing and storing techniques require different kinds of tech tools to be successful. And even with the use of the latest technology there is a slight risk for data to be revealed. With the pseudonymous data that risk is slightly higher than with anonymous information. Recent research from a Data Privacy Lab has shown that you only need three data points to identify 87%of US citizens: their five-digit ZIP code, date-of-birth, and gender. Thus, even though each of these data points is not dangerous on its own, keeping them together drastically increases the chances for a data breach.

Observing the data breach risks, only one of these strategies falls under the GDPR data encryption requirements. As anonymous data remains unidentifiable, it is not considered to be personal data and, as such, does not fall under the GDPR encrypted data requirements.

On the other hand, it is easier to recover pseudonymous data, which is why pseudonymization is part of the personal data category and requires complete GDPR compliance. Therefore, if you seek to avoid GDPR compliance then you should keep your data anonymous. If you aim to provide better customer service while still maintaining data safety, then you should choose pseudonymous encryption and follow the GDPR requirements.

However, neither anonymization nor pseudonymization are mandatory. You can choose not to implement any of the GDPR encrypted data clauses in your company’s data policy. Of course, this is not recommended as there are significant benefits from their implementation, including a higher customer satisfaction rate, better data protection, and increased revenue.

5. The steps to comply with GDPR encryption requirements

Anonymization and pseudonymization sound like a great deal in terms of GDPR data encryption requirements. The truth is, these requirements are still in the development phase. While the EU encourages that you integrate some level of encryption into your data protection practices, there are no clear rules on how to achieve GDPR compliance.

Their advice is to look for the latest technology that complies with the requirements, such as customer support software. The only compliance measurement  is ‘how likely is it for the data to be recovered.” Here, the GDPR encrypted data compliance becomes a gray area. If it is deemed extremely easy, or as they say “reasonably likely”, to recover user data, then you don’t possess pseudonymous data.

How reasonably likely is to recover the data depends on:

  • The technique used for pseudonymization
  • The location of additional PII in relation to the de-identified data
  • How likely it is that non-identifiable data points will be used to identify a user

There are a lot of challenges you need to care for when choosing to comply with the GDPR data encryption requirements, ranging from legal help to IT advisory. However, you can always hire someone to take care of all of these for you, and having the right customer support software may be the best option nowadays.