Photo 1 Data breach 2 Cybersecurity 3 Lawsuit 4 Compliance 5 Penalties 6 Privacy 7 Regulations 8 Fines 9 Audit 10 Liability

US Companies Face GDPR Risks: Are You Prepared?

The European Union (EU) put into effect the General Data Protection Regulation (GDPR), a comprehensive data protection law, in May 2018. Its goal is to safeguard the personal information and privacy of residents and citizens of the EU. Despite being an EU regulation, the GDPR has significant effects on businesses worldwide, including those with US headquarters. This article will explain what GDPR is, how it affects US businesses, what could happen if a company doesn’t comply, & what steps they can take to comply. 

A. What is the GDPR?

The GDPR is a collection of laws that control how personal data about individuals is gathered, used, and kept inside the European Union. It is applicable to all organisations, regardless of location, that handle the personal data of EU citizens. This means that US businesses are obligated to comply with the GDPR if they have partners, customers, or employees in the EU.

B. Overview of GDPR’s effects on US businesses:

The GDPR forces US businesses to adhere to stringent data protection regulations when managing the personal information of EU citizens.

This has a major impact on US businesses. This includes giving people specific control over their personal data, putting in place suitable security measures, and getting their express consent before processing their data.

C. Important GDPR requirements for US businesses

Among the important GDPR requirements to which US businesses must comply are:

  1. Consent: Before collecting and processing a person’s personal data, US companies are required to get that person’s express consent. Free, explicit, informed, & unambiguous consent is required.
  2. Data protection: In order to guarantee the security & privacy of personal data, US businesses must put in place the proper organisational and technical safeguards. This involves taking precautions like frequent data backups, access controls, and encryption.
  3. Rights of Data Subjects: Under the GDPR, people have certain rights regarding their personal data, including the ability to access, edit, & remove it. US businesses need to have procedures in place so they can respond to these requests quickly.
  4. Have local representation for EU data subjects to contact: Among the crucial GDPR requirements that US businesses must adhere to is the appointment of a local EU GDPR privacy representative in accordance with Article 27. This requirement entails designating a representative within the European Union if your business processes personal data of EU residents, but lacks a physical presence in the EU. The appointed representative serves as the point of contact for EU data protection authorities and individuals regarding GDPR-related matters. Compliance with Article 27 ensures that US businesses operating within the scope of the GDPR maintain a direct line of communication with EU authorities and data subjects, facilitating transparency, accountability, and adherence to EU data protection standards. Failure to appoint a representative may result in regulatory penalties and legal consequences, highlighting the importance of fulfilling this requirement for US businesses aiming to operate lawfully within the EU market.

D. Big impact for non-compliance

  1. Fines: The possibility of facing heavy fines is one of the most important repercussions of failing to comply with the GDPR. Up to 4 percent of a company’s annual global revenue or €20 million in fines are permitted under the GDPR. For US corporations, particularly smaller ones, these fines may have a detrimental financial effect. 
  2. Damage to reputation: US companies may suffer reputational harm if they fail to comply with the GDPR. In the current digital era, customers’ concerns regarding the security & privacy of their personal information are growing. If a US business is discovered to have violated the GDPR, clients & partners may become less confident in the organisation.
  3. Legal repercussions: American businesses may face legal repercussions if they fail to comply with the GDPR. People who believe that a company has violated their right to data protection may file a lawsuit. This may lead to expensive legal disputes & possible damages paid to those impacted.

E. Personal Data

GDPR definition of personal data: Any information that can be used to directly or indirectly identify an individual is considered personal data. Names, addresses, phone numbers, emails, IP addresses, and even online identifiers like cookies are included in this.

GDPR recognizes a unique category of data known as sensitive data, also referred to as special categories of personal data. This includes details about one’s race or ethnicity, political views, religious or philosophical convictions, union membership, genetic information, biometric information, and information about one’s health or sexual orientation.

F. Data Processing

Activities related to data processing that are covered by GDPR: Collection, storing, use, & disclosure of personal data are just a few of the many data processing activities that are covered by GDPR. It covers both automated processing (e.g. g. computer systems) as well as manual processing (e.g. records kept on paper).

G. GDPR compliance checklist

Use one to evaluate your organisation’s preparedness for complying with the GDPR. This checklist ought to cover all of the essential GDPR requirements, including getting consent, putting data protection measures in place, and managing data subject rights. B. Finding gaps in your company’s data protection policies between what the GDPR requires and what it says is known as a GDPR gap analysis. This can assist in identifying potential areas for improvement within your organisation.

After performing a gap analysis, it’s critical to pinpoint the precise areas in which your business’s data protection procedures require improvement. Developing new policies & procedures, educating staff members about data protection, or purchasing new equipment or security measures could all be part of this.

H. Data Protection Officers (DPO) and representation

  1. Definition of data protection officers: Under the GDPR, appointing a data protection officer (DPO) is mandatory for some organisations. In charge of managing the company’s data protection initiatives and guaranteeing GDPR compliance is a data protection officer, or DPO.
  2. The duties of data protection officers (DPOs) comprise offering guidance to the organisation regarding its data protection requirements, overseeing adherence to the General Data Protection Regulation (GDPR), educating staff members, and serving as a liaison between data subjects & regulatory bodies.
  3. Appointing a data protection officer (DPO) is important because it can help make sure that your business has a dedicated person in charge of managing GDPR compliance.
  4. Appoint a local GDPR representation: As a US company handling EU data subjects’ personal data, appointing a local EU GDPR representative is essential for compliance and maintaining legal standing.

By taking all this into account, you can lessen the chance of non-compliance and show clients & regulators that your business values data protection.

I. How can you ensure compliance?

  1. Data protection policies and procedures: US businesses should create and put into place data protection policies & procedures that comply with the GDPR’s requirements. This covers procedures for getting permission, managing the rights of data subjects, and putting security measures in place.
  2. Plan for responding to data breaches: In order to properly address and lessen the effects of a data breach, US businesses should also have a plan in place. This strategy should outline how to locate & stop the breach, notify those who are impacted, and work with oversight authorities.
  3. Procedure for data subject access requests: Under the GDPR, people have the right to see and obtain copies of their personal data. US businesses should have a procedure in place for promptly responding to these requests and giving people access to the data to which they are legally entitled.
  4. Speaking with data subjects: American businesses should be transparent and open when discussing with data subjects how their personal information is gathered, used, and kept. This involves giving out privacy notices that outline the reason for processing data, its legal justification, and the rights of data subjects.
  5. Providing privacy notices: Privacy notices ought to be written in simple, understandable language and should be readily available. Data subjects ought to be apprised of their rights, the means of exercising said rights, and the way in which they can get in touch with the company for any queries or grievances.
  6. Openness in data processing operations: US businesses should be open and honest about the data they process, telling people what kinds of information they are collecting, why they are processing it, & who else may access it.
  7. Get local EU GDPR representation: Appointing a local EU GDPR representative as a US company processing EU data subjects’ personal data ensures compliance with GDPR Article 27, facilitating communication with EU authorities and data subjects, and upholding legal obligations.

J. Problems faced by multinational corporations

Complying with GDPR presents special difficulties for multinational corporations. Navigating various data protection laws and regulations in various jurisdictions, maintaining uniform data protection practices amongst subsidiaries, and controlling cross-border data transfers are some of these challenges.

  1. Strategies for achieving GDPR compliance across multiple jurisdictions: Multinational corporations should create a global data protection strategy that considers the GDPR’s requirements as well as any other applicable data protection laws in order to achieve GDPR compliance across multiple jurisdictions. This could entail putting in place international data protection regulations, carrying out frequent audits & evaluations, & training staff members in various countries.
  2. Developing trust with EU partners & customers: Adhering to the GDPR can assist US businesses in cultivating relationships with EU partners & customers. In order to stand out in the market and draw in clients who respect data privacy, US businesses should exhibit a commitment to safeguarding personal information and upholding people’s right to privacy. Ensuring GDPR compliance in cross-border data transfers: Under the GDPR, US companies that transfer personal data from the EU to the US must make sure they have a legitimate reason to do so. This could entail putting in place suitable safeguards to guarantee that the data is sufficiently protected during the transfer, like binding corporate rules or standard contractual clauses.
  3. Impact on marketing and advertising initiatives US companies must consider when implementing cookies and other tracking technologies, as well as when obtaining consent for direct marketing initiatives. To make sure they are in compliance with the GDPR’s regulations, US businesses should assess their marketing strategies.

K. Summary of impending data privacy laws

The GDPR is just one illustration of the global trend toward increasingly stringent data privacy laws. Numerous nations, the US among them, are debating or enacting their own data privacy legislation. The United Kingdom has similar law to the European GDPR: The Data Protection Act. It is critical that US businesses keep up with these developments and modify their data security procedures as necessary.