ANALYSIS OF THE ECONOMICAL EFFECTS OF PERSONAL DATA PROTECTION REGULATION

Client: Justiitsministeerium

Period: 2009

Each law has side effects. In recent years more and more attention has been directed to a phenomena called administrative burden in the context of legal act design and implementation. The objective of this project was to assess the administrative burden stemming from regulation of personal data (including sensitive personal data) processing and also assess its economical effect on the private sector.

A standard cost model method developed by the OECD was used which allows to estimate the administrative expense caused by information obligations brought about by the Personal Data Protection Act (PDA) for the enterprise. Also, additional interviews were carried out to find answers to questions that extended outside the scope of standard cost model.

It was discovered that the effect of the PDA on the activities of the enterprise differs greatly in sectors and size groups. Enterprises which process large quantities of sensitive personal data and whose activities are actually checked by the Data Protection Inspectorate have had large-scale expenses to make their activities correspond with the law. Ordinary small enterprises have generally not made investments into data protection in order to be compliant with the law – all that is done is mainly for the protection of the assets of the enterprise.

The effect of the PDA on enterprises has been largely un-noticable so far, mainly because the majority of duties originating from it can be smoothly integrated into the activities of the enterprise and this has also been the case for most of the companies – in one way or another.

The project was commissioned by the Ministry of Justice.