EU NIS Directive vs GDPR: 3 key differences and why compliance matters

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The EU NIS Directive (NIS2) and GDPR are critical frameworks designed to protect an organization’s infrastructure and secure personal communication and data. While the former focuses on network and information system security, GDPR mainly concentrates on personal data protection.

To note, lack of compliance with these regulations results in hefty penalties ranging from €10-20 million or 2-4% of global annual turnover, litigations, reputational damage, and heightened vulnerability to cyberattacks.

For example, Meta was charged with a landmark €1.2 billion fine in May 2023 for systematic privacy violations, specifically related to data transfers between the EU and the US.

This article explores the differences between the EU NIS Directive and GDPR and explains how each framework complements an organization's digital security environment.

What is the EU NIS Directive?

The EU NIS Directive or NIS2, officially known as Directive (EU) 2022/2555, is a significant update to the previous NIS Directive (EU) 2016/1148. The regulation is aimed at enhancing cybersecurity across the European Union, and it came into force on January 16, 2023.

Organizations are classified as either "essential" or "important" entities based on factors like size, sector, and criticality. For NIS2 violations, here’s how the fines look like for each entity:

Essential entities face fines of up to €10 million or 2% of global annual revenue, whichever is higher.
Important entities face fines of up to €7 million or 1.4% of global annual revenue, whichever is higher.

Key features of the EU NIS Directive

Improved coordination in cyber crises: NIS2 establishes a robust cybersecurity crisis management structure known as CyCLONe to improve coordination during cyber crises.
Standardized security measures: It increases the harmonization of security requirements and reporting obligations across member states.
Expanded scope for enhanced protection: The directive expands its coverage to include more sectors of the economy and society, thereby obligating a larger number of entities to adopt cybersecurity measures. This includes critical sectors like energy, transport, health, and digital infrastructure.
Strengthened national cybersecurity strategies: Member states are encouraged to incorporate new areas into their national cybersecurity strategies, such as supply chain security, vulnerability management, and cyber hygiene practices.

To achieve compliance with the EU NIS Directive, organizations should have a strong cyber resilience strategy that includes security defenses, efficient incident management, and the implementation of secure collaboration tools.

What is GDPR: An outline

The General Data Protection Regulation (GDPR) is a notable EU data protection law implemented to protect the personal data of EU citizens.

With 11 chapters and 99 articles, the GDPR law broadly applies to any business that collects or processes EU citizens’ data, regardless of where the business is located.

For GDPR violations, fines can reach up to €20 million or 4% of global annual turnover, whichever is higher, for severe infringements. Less severe violations can lead to fines of up to €10 million or 2% of global annual turnover.‍

Key features of GDPR

In a nutshell, GDPR enforces strict standards around data consent, user rights, and transparency. Here’s how:

Accountability: Organizations must demonstrate compliance with GDPR principles and implement appropriate technical and organizational measures.
Data Protection Officer (DPO): Many organizations, especially public bodies, must appoint a DPO to oversee data protection strategies and compliance.
Data Protection Impact Assessments (DPIAs): Organizations must conduct DPIAs for high-risk data processing activities.
International data transfers: GDPR imposes restrictions on transferring personal data outside the EU.
Expanded territorial scope: It applies to organizations outside the EU if they offer goods or services to EU residents or monitor their behavior.
Stricter penalties: As noted before, GDPR introduces significant fines for non-compliance.
Data minimization and storage limitation: Organizations should only collect necessary data and keep it for no longer than required.

EU NIS Directive and GDPR: 3 key differences

The key differences between the EU NIS Directive and GDPR are as follows:

1. Scope and coverage

EU NIS Directive:

As noted before, the Directive primarily targets networks, information systems, and overall cybersecurity. It applies to essential services and digital service providers, such as energy, healthcare, and finance.

GDPR:

The regulation is centered on personal data protection, applying to any organization that processes the personal data of EU citizens, regardless of its industry.

2. Compliance requirements

EU NIS Directive:

Under the NIS2 Directive, organizations must implement robust cybersecurity measures and report any significant cybersecurity incidents within 24 hours. This includes safeguarding third-party supply chains.

GDPR:

The regulation stresses obtaining explicit consent from users before processing their data and mandates that data breaches be reported to authorities within 72 hours.

3. Penalties for non-compliance

EU NIS Directive:

As stated before, non-compliance with the NIS Directive can result in penalties, including non-monetary remedies, administrative fines, and criminal sanctions. The fines may reach up to €10 million or 2% of a company's global turnover .

GDPR:

In comparison, GDPR carries much heftier penalties, with fines reaching up to €20 million or 4% of a company’s global annual revenue.

Areas where the EU NIS Directive and GDPR overlap

Now, let’s go over some areas where the two frameworks intersect:

1. Incident reporting

Both NIS2 and GDPR require businesses to report incidents, but the type of incidents and the regulatory focus differ.

EU NIS Directive addresses cybersecurity incidents affecting essential services and digital providers. These entities must report breaches that could disrupt their services or security.
GDPR requires businesses to report personal data breaches to authorities within 72 hours if individual rights are at risk. If the breach threatens individuals, they must also be informed.

2. Third-party risk management

Another critical area of overlap between NIS2 and GDPR is third-party risk management:

NIS2 mandates that essential service providers ensure their supply chains are secure. This includes requiring vendors and partners to meet strong cybersecurity standards.
GDPR requires strong data protection from companies. They must ensure their third-party data handlers also meet GDPR standards. This includes agreements that define responsibilities for protecting personal data.

3. Cross-border cooperation and supervisory authorities

Both NIS2 and GDPR emphasize cross-border cooperation but involve different types of supervisory authorities and mechanisms for secure collaboration.

NIS2 establishes national competent authorities (NCAs) responsible for overseeing compliance. These NCAs collaborate across EU borders through the Cooperation Group and the CSIRTs (Computer Security Incident Response Teams) Network.
GDPR involves data protection authorities (DPAs) in each EU member state, collaborating through the European Data Protection Board (EDPB). The Board facilitates consistent application of GDPR and manages compliance for organizations across multiple EU countries.

Why does compliance with the EU NIS Directive and GDPR matter?

For organizations across sectors, achieving compliance with GDPR and the EU NIS Directive is important to accomplish the following:

Avoiding massive financial penalties

Non-compliance can result in severe fines.

For example, in 2022, Ireland’s data protection authority fined Instagram €405 million ($442 million) for wrongfully processing the personal data of children.

Protecting sensitive data and critical infrastructure

Both regulations aim to safeguard personal information and essential services.

Enhancing overall cybersecurity posture

Compliance often leads to improved security practices. For instance, the NIS2 Directive requires organizations to implement comprehensive risk assessments and robust risk management practices.

Building trust and reputation

In September 2023, Axpo Italia S.p.A. was fined €10 million for processing inaccurate customer data to establish unsolicited contracts. Compliance can help avoid such occurrences, as it demonstrates a commitment to data protection, enhancing customer confidence.

Ensuring business continuity

Finally, conformity with the regulations helps prevent data breaches and cyber attacks that can severely impact operations.

Presenting the ideal solution for achieving both NIS2 and GDPR compliance: Rocket.Chat

As an open-source platform, Rocket.Chat can help organizations achieve strict compliance with both regulations while streamlining secure collaboration.

Here are a few features that can help:

1. Comprehensive security

E2EE: The tool supports encrypted messaging with multilevel security that aligns with NIS2’s cybersecurity protocols and GDPR’s data protection requirements.
Granular access controls: Supports secure user access management and role-based access control.

2. Self-hosting and data sovereignty

Self-hosting: Besides cloud deployment, Rocket.Chat also offers self-hosted options, empowering businesses to maintain data sovereignty.
GDPR compliance: With self-hosted options, companies control data localization, aiding GDPR compliance.

3. Incident reporting and monitoring

Real-time monitoring & incident reporting: The tool provides real-time alerts and audit logs, facilitating quick incident responses.

4. Customizable and open source

Customization and white labeling: Rocket.Chat’s open-source messaging platform allows enterprises to adapt security measures as needed.
Enterprise support: With dedicated support options, this tool helps enterprises manage regulatory needs efficiently.

5. Cost-effective solution

It offers a cost-effective solution, ensuring access to robust security and compliance tools without compromising features.

Final note

In conclusion, the EU NIS Directive (NIS2) and GDPR serve as essential frameworks. NIS2 mandates cybersecurity for essential services, focusing on resilience and service continuity, while GDPR enforces strict data privacy standards across sectors handling EU citizens' data.

Rocket.Chat provides an integrated solution that supports these compliance needs.

As a self-hosted chat app with a cloud deployment option, it enables data sovereignty, aiding GDPR compliance, while its open-source flexibility keeps the platform highly adaptable and budget-friendly.

Ready to explore how we can support your organization’s compliance goals?