The General Data Protection Regulation, more commonly referred to as GDPR, is a set of laws that govern how the personal data of European residents can be used, processed, and stored by companies.
GDPR compliance for SaaS companies is mandatory for all online products and services that operate within any of the GDPR compliance countries. Failing to comply puts you at risk of fines of up to 10 million euros or 2% of your company’s global turnover, and you risk being banned from the European consumer and business markets.
Who does the GDPR apply to?
It’s important to know which countries the GDPR applies to before entering a new market. The GDPR is enforceable in the European Economic Area (EEA). This automatically covers all permanent residents of these countries, regardless of their nationality.
For US citizens based in any of the EEA countries, their data and information are automatically protected by the GDPR. The same applies to US-owned and US-based businesses if they operate within the EEA.
If any of your clients, customers, or users are based in the protected countries, you’re required to handle their data in accordance with the GDPR. This law, however, doesn’t apply to EU or EEA citizens who choose to relocate to non-GDPR-compliant countries like the US.
Does the GDPR apply to American organizations?
In some cases, yes, the GDPR can apply to American organizations and businesses. This is, however, limited to organizations with users and customers located in the EEA. In addition to hefty fines, businesses that aren’t GDPR-compliant risk being banned from the European market.
You can choose to only apply GDPR rules to the data of users from the affected countries while handling the data of residents according to local regulations. That being the case, the GDPR isn’t the only regulation you should keep an eye on as an international company. That’s because there are many GDPR equivalents in other countries such as:
- Brazil: The Lei Geral de Proteção de Dados (LGPD) is a law that’s nearly identical to its European counterpart that has been in effect in Brazil since September 2020. Not complying with the LGPD can leave you locked out of Latin America’s largest economies.
- Canada: The Digital Charter Implementation Act is a bill that was proposed by the Canadian government in June 2022. It similarly aims to protect the personal data of Canadian citizens and residents against exploitative analysis and use in the development of artificial intelligence (AI) models without their consent.
- Australia: According to the Notifiable Data Breaches (NBD) scheme that took effect in February 2018, organizations with annual revenues exceeding AUD 3 million must disclose data breaches that affect user data within 30 days of discovery.
Is GDPR a US law?
The GDPR is not a US law. It was entirely drafted, proposed, and approved by the European Parliament and Council of the European Union. There are, however, numerous state and federal laws in the US that are concerned with protecting the privacy of user data. One prominent example is the California Consumer Privacy Act (CCPA).
In effect since 2020, the CCPA is a GDPR equivalent that requires some businesses operating within the state of California to notify users and acquire their consent before any data collection.
An example of a federal-level data privacy law is the Health Insurance Portability and Accountability Act (HIPAA) of 1996. HIPAA focuses almost exclusively on the personal information of patients and how it’s stored, transferred, and processed between one or multiple healthcare establishments.
Who does the GDPR not apply to?
The GDPR doesn’t apply to any commercial entity or organization that doesn’t operate commercially in the EU or EEA. You might also be wondering, “Does GDPR apply to individuals?”
Luckily, not in most cases. The GDPR doesn’t apply to individuals as long as their scope of data storage and processing is considered a “purely personal or household activity.” However, individuals offering products or services commercially in the EEA as an independently run small business may still be subject to the regulation.
How do you ensure compliance with GDPR for your business?
Knowing and staying up to date on which laws and regulations apply to your particular commercial activity can get very complicated very quickly. However, that’s no excuse to risk hefty fines, regional bans, and reputational damages to your brand.
You can book a free consultation with a compliance adviser at Trava Security, the go-to industry expert for compliance and cybersecurity advisory services, and we’ll get you started with all the information you need!