GDPR compliance requirements for the U.S.
Enacted by the European Union (EU), the General Data Protection Regulation is often mistakenly thought of as a set of rules that only apply within Europe.
However, this couldn’t be further from the truth. A common question many U.S. businesses have is: Does GDPR apply to us? The answer, in many cases, is yes.
What is GDPR?
The GDPR, or General Data Protection Regulation, is a comprehensive data protection law that came into effect on May 25, 2018. Its primary objective is to safeguard the personal data and privacy of EU citizens, providing individuals with greater control over their data. It imposes strict requirements on how organizations handle personal data, with hefty fines for non-compliance.
To dive deeper into the GDPR, you can explore our comprehensive guide on the GDPR.
Who does GDPR apply to?
Understanding the reach of GDPR is crucial for any organization handling personal data. Essentially, GDPR applies to any organization, regardless of its location, that processes the personal data of individuals residing in the EU. This means GDPR’s scope is extraterritorial, reaching beyond the borders of the EU.
The regulation affects not only EU-based companies but also non-EU entities that offer goods or services to EU residents or monitor their behavior. For a detailed exploration of this topic, you can read the article, Who does GDPR apply to?
What is GDPR?
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Find out moreHow GDPR applies to U.S. businesses
GDPR’s extraterritorial reach means that U.S. businesses are not exempt from its requirements. If your company processes personal data of EU citizens—whether through offering goods or services, employing EU residents, or monitoring EU citizens’ online behavior—your organization is subject to GDPR. This includes:
- E-commerce Platforms: Websites that sell products or services to customers in the EU.
- Service Providers: Companies offering digital services such as SaaS, cloud storage, or marketing solutions to EU clients.
- Multinational Corporations: U.S. companies with subsidiaries or business operations in the EU.
These organizations must ensure they are compliant with GDPR’s regulations, as non-compliance can result in fines of up to €20 million or 4% of the company’s global annual revenue, whichever is higher.
The recent enforcement action from the Dutch DPA on Clearview is an excellent example of how the GDPR applies to the U.S. Clearview argued that the GDPR does not apply to them because they are based in the U.S., however the assertion was rejected as the evidence showed that they processed data of individuals in the EU, including Dutch citizens, thereby falling under the territorial scope of GDPR.
Clearview was fined €30.5 million (USD $33,684,352) for unlawfully collecting and processing biometric data of EU citizens without proper legal grounds; the company failed to comply with access requests, neglected transparency obligations, and did not appoint an EU representative.
GDPR compliance requirements for U.S. businesses
For U.S. businesses, achieving GDPR compliance involves meeting several key requirements:
- Data Protection Principles: Adhering to principles such as lawfulness, fairness, transparency, data minimization, accuracy, storage limitation, and integrity and confidentiality.
- Legal Bases for Processing: Identifying valid grounds for processing personal data, such as consent, contract, legal obligation, vital interests, public task, or legitimate interests.
- Individual Rights: Respecting and facilitating the rights of individuals, including the right to access, rectify, erase, and restrict processing of their data, as well as the right to data portability and to object.
- Data Protection Officers (DPOs): Appointing a DPO if the core activities involve large-scale processing of sensitive data or regular monitoring of individuals.
- Data Protection Impact Assessments (DPIAs): Conducting DPIAs for processing activities that pose high risks to the rights and freedoms of individuals.
- Records of Processing Activities: Keeping detailed records of processing activities involving personal data.
Challenges and solutions for GDPR compliance
U.S. businesses face several challenges when navigating GDPR compliance. These challenges often stem from differences in regulatory environments, the complexity of GDPR requirements, and the technical measures needed to protect personal data.
To overcome these challenges, businesses can implement practical solutions:
- Appointing a Data Protection Officer (DPO): A DPO ensures that the organization complies with GDPR requirements and serves as a point of contact for data subjects and supervisory authorities.
- Employee Training: Regularly training employees on data protection practices and GDPR compliance helps minimize risks and ensure that staff are aware of their responsibilities.
- Using GDPR Compliance Software: Leveraging specialized software can streamline compliance efforts, automate data protection processes, and provide ongoing monitoring and reporting capabilities.
Benefits of GDPR compliance for U.S. businesses
While achieving GDPR compliance can be challenging, the benefits extend far beyond avoiding fines. Complying with GDPR can lead to:
- Enhanced Data Security: Implementing GDPR standards improves overall data protection, reducing the risk of data breaches and cyber-attacks.
- Increased Customer Trust: Demonstrating a commitment to data privacy builds trust with customers, which can enhance brand reputation and loyalty.
- Market Advantage: Being GDPR-compliant can open doors to new business opportunities, particularly in the EU market, where data privacy is a significant concern
Achieve and Maintain GDPR Compliance with TrustArc
Managing the complexities of GDPR compliance can be daunting, but you don’t have to do it alone. TrustArc offers a range of data privacy solutions tailored to help businesses achieve and maintain GDPR compliance. From comprehensive assessments to advanced compliance software, TrustArc provides the tools and expertise needed to protect personal data and ensure regulatory compliance.
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