LGPD: what is the General Data Protection Act?

A LGPD (General Data Protection Law) came into force to establish clear rules on the use, processing and storage of personal data by individuals and companies throughout the country.

With the publication of Law No. 13.709/2018As a result, millions of companies have had to adapt their processes to guarantee transparency, security and respect for the rights of data subjects.

In this comprehensive article, we will explore in detail what the LGPD is, its main concepts, obligations, sanctions, legal bases and how to implement an effective compliance program.

Context and origin of the LGPD

The history of data protection in Brazil dates back to debates on privacy in the 2000s. Inspired by European legislation, especially the General Data Protection Regulation (GDPR).

A General Data Protection Law - popularly known as the LGPD Law - was signed into law in August 2018 and came into force in September 2020. Officially called Law No. 13.709/2018It represents a regulatory framework that aims to balance freedom of information with citizens' need for privacy.

Before the LGPD, Brazil had only sparse provisions in consumer protection codes and the Brazilian Civil Rights Framework for the Internet. The new law unified the principles and rules in a single piece of legislation, creating the national authority responsible for overseeing (ANPD) and defining clear guidelines for processing personal, sensitive and anonymized data.

What LGPD means: main concepts

When someone asks "What does LGPD mean?", the answer involves more than deciphering the acronym: it's about understanding its pillars and key concepts:

• Personal dataAll information relating to an identified or identifiable natural person.
• Sensitive dataSpecial category involving racial origin, religious convictions, political opinion, health data, sex life, etc., whose protection requires reinforced care.
• Data subjectNatural person to whom the data refers;
• ControllerThe person who determines the purposes and means of data processing;
• OperatorWho carries out the processing on behalf of the controller;
• Data processingAny operation carried out with personal data, such as collection, storage, use, sharing and deletion.

These concepts underpin the application of the LGPD in companies of all sizes, whether they are in technology, services, e-commerce or finance. Knowing each term is essential for mapping internal processes and defining responsibilities.

Main objectives of the General Data Protection Act

The LGPD was created with clear objectives, which include:

1. Protecting the fundamental rights of freedom and privacy
2. Promoting transparency in data processing, requiring companies to inform data subjects about the collection, use and sharing of information.
3. Encourage the adoption of governance practices and information security
4. Strengthening the culture of compliance in organizations, ensuring that standards and policies are effectively implemented
5. Fostering innovation by creating unique rules that facilitate the secure exchange of information between sectors

By fulfilling these objectives, organizations reduce the risk of incidents, strengthen their reputation and, at the same time, deliver more trust to customers, suppliers and partners.

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Who is subject to the LGPD Law and its applications

The scope of LGPD This means that both legal and natural persons who process data on national territory are subject to its rules. This includes

• Technology companies that collect data through apps and websites
• Financial institutions that handle sensitive financial information
• Clinics and hospitals that store health data
• E-commerces that process data for logistics and marketing
• Public bodies that process citizens' data

Even small businesses, such as individual micro-entrepreneurs (MEI), must comply if they handle customer, employee or supplier data. The law makes no distinction as to the size of the organization, but rather as to the data processing activity.

Data subjects' rights

One of the pillars of the LGPD is to ensure that data subjects have control over their information. The rights provided for include:

• Confirmation and accessThis means knowing whether a company holds personal data and accessing what information is held;
• Correction of incomplete, inaccurate or outdated data;
• Deleting data when they are no longer needed for their original purpose;
• Portability the data to another service or product provider, upon request;
• Opposition the processing of data that does not comply with legal requirements;
• Revocation of consent at any time, without prejudice to legitimate treatment carried out up to that point.

Guaranteeing these rights requires companies to implement clear processes for responding to requests, defined deadlines (usually 15 days) and accessible communication channels.

Legal bases for processing of personal data

A LGPD provides ten hypotheses that authorize the processing of data. They act as "legal grounds" for collecting, storing and using personal information, the main ones being:

• ConsentFree, informed and unequivocal authorization from the owner;
• Compliance with legal or regulatory obligations: Treatment required to comply with government regulations;
• Implementation of public policiesWhen there is a legal provision;
• Studies carried out by research organizationsEnsuring anonymization whenever possible;
• Contract executionTreatment required to fulfill a contract or preliminary procedures;
• Protection of life and physical integrity: The owner or third parties;
• Health protection: In procedures carried out by professionals in the field;
• Legitimate interest of the controller or third partyAs long as the holder's fundamental rights and freedoms are respected;

Understanding these bases is fundamental to documenting each treatment operation, ensuring that there is legal backing for all activities.

Obligations and responsibilities: compliance and governance

To ensure compliance with the LGPD, companies must set up a compliance robust, which includes:

• Internal policies clear data protection rules;
• Training and awareness employees on procedures and best practices;
• Mapping data flowsby identifying how information enters, circulates and leaves the organization;
• Risk analysis and implementation of technical and administrative controls (encryption, firewalls, restricted access, etc.);
• Report writing and records of each treatment operation, enabling internal and external audits;
• Incident management and spill response plans, with immediate communication to the ANPD and the affected owners;
• Appointment of a Data Processing Officer (DPO)He is responsible for mediating the demands of the authority and the owners.

Compliance is not a cost, but an investment: in addition to avoiding fines and sanctions, it strengthens reputation, increases market confidence and can become a competitive differentiator.

Sanctions and penalties under the LGPD

Failure to comply with LGPD rules can result in sanctions ranging from warnings and data blocking to fines of up to 2% of the company's turnover, limited to R$ 50 million per infraction. The main penalties are:

• Warning with a deadline for the adoption of corrective measures;
• Simple fine or daily, calculated on turnover;
• Publicizing the infringement after the fact;
• Blocking e elimination personal data related to the infringement;
• Partial or total ban from carrying out activities related to data processing.

These sanctions are applied by the National Data Protection Authority (ANPD), which also issues complementary guidelines and regulations.

Demonstrating proactivity in adopting security and governance measures can mitigate risks and reduce the severity of possible punishments.

Implementing a GDPR compliance program

Developing an effective program involves several steps:

• Initial diagnosis: Assessment of the degree of maturity in data protection;
• Planning: Definition of timetable, priorities and resources;
• Data mappingInventory of all databases and information flows;

• Contract reviewInclusion of data protection clauses with suppliers and partners;
• Training: Continuous employee training;
• Internal tests and audits: Incident simulations and periodic review of controls;
• Continuous monitoring: Use of indicators to evaluate program effectiveness;
• Permanent adjustmentsUpdate on technological and regulatory changes.

This cycle ensures that the organization evolves in maturity, is prepared for new requirements and maintains data protection as a central element of its corporate culture.

Benefits of GDPR compliance

Complying with the LGPD brings concrete advantages:

• Risk reduction of leaks, fraud and cyber attacks;
• Greater confidence customers, suppliers and investors;
• Market opportunitiesMany companies require data protection certifications from their partners;
• Improving internal processes, promoting efficiency and eliminating redundancies;
• Brand enhancementand its ethical and transparent commitment to society.

Companies that take the LGPD seriously show that they care not only about financial results, but also about people's privacy and security.

Challenges in implementing the LGPD in small and medium-sized companies

Despite all the advantages of complying with the LGPD, many challenges arise for small and medium-sized businesses throughout the compliance process.

One of the main obstacles is the limited resources - budgetary, technological and human - to map all data flows, implement technical controls and maintain an active Compliance program.

While large corporations can rely on dedicated teams and market solutions, SMEs often accumulate multiple functions in the same employee, causing "GDPR responsibilities" to take a back seat.

Another critical point is organizational culture. In smaller companies, processes tend to be more informal and decisions are made quickly, often without documentation.

Adapt to LGPD Law requires formalizing procedures, from the collection of consent to the disposal of data, which takes time and discipline. Training the entire team to understand what LGPD means and its legal implications is also essential, but can meet with resistance if there is no clear sponsorship from the leadership.

In practice, a Simplified diagnostics could be the way out: identify the areas most at risk (e.g. finance, HR and marketing), prioritize the most commonly used legal bases (such as consent and contract enforcement) and adopt cloud solutions with security standards already incorporated.

Future trends and updates in the LGPD

The regulatory environment surrounding the LGPD is constantly evolving. After the initial sanction of the General Data Protection Law, the National Data Protection Authority (ANPD) has been publishing complementary rules, guides and manuals, detailing requirements for specific sectors and clarifying controversial points.

It is hoped that the following will be released soon resolutions on artificial intelligence, decision automation and consent protocols for emerging technologies.

Another important trend is the strengthening international cooperation. With companies becoming increasingly globalized, the LGPD tends to undergo adjustments to facilitate cross-border data flows, creating "adequacy agreements" with other jurisdictions that have compatible legislation, such as the European Union.

In practice, this will bring new obligations for Brazilian companies operating abroad and for multinationals with units in Brazil.

On the technological front, the use of Privacy by Design tools e Privacy Enhancing Technologies (PETs)such as advanced anonymization techniques and homomorphic encryption.

These innovations make it possible to handle sensitive data securely, minimizing the risk of leaks and strengthening the trust of data subjects.

This movement will transform the compliance in a competitive differentiator, as customers and partners will increasingly demand guarantees that operations are aligned with the best global privacy practices.

How CLM Controller Accounting can help

Implementing and maintaining a data protection program requires expertise and an integrated vision of processes, technology and governance.

A CLM Controller Accounting is prepared to offer:

• Complete advice in LGPD, from the diagnosis to the final audit of the program;
• Compliance Consultingaligning privacy policies with tax and accounting regulations;
• Tailor-made trainingempowering teams and leaders;
• Reviewing contracts and suppliersguaranteeing data protection clauses;
• Regular auditsevaluating the effectiveness of controls and proposing continuous improvements.

Count on the experience of CLM Controller Contabilidade to transform the challenge of the LGPD into a competitive advantage.

Request an assessment and find out how our team can strengthen your governance, protect your data and ensure full compliance.

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