GDPR Compliance for US E-commerce: A Comprehensive Guide

You may be wondering how the European Union’s General Data Protection Regulation (GDPR) affects your US-based business. In this blog post, we’ll delve into the intricacies of GDPR compliance for US companies, who is protected by GDPR, and what GDPR compliance means for US businesses.

Understanding GDPR: A Brief Introduction

The GDPR, enacted in 2018, is the most substantial and stringent data privacy law globally. It safeguards EU residents’ personal data and grants them certain rights, including the rights to be informed about data collection and processing, access their personal data, correct and update their data, request the erasure of their data, restrict processing data, object to how their information is used, and opt out of certain automated practices [^1^].

The GDPR operates on seven principles that encompass both protection of personal information and accountability for those handling it. These principles mandate businesses to process personal data lawfully, fairly, and transparently, collect personal data only for specified, explicit, and legitimate purposes, minimize data collection, ensure data accuracy, limit data storage, secure personal data, and demonstrate GDPR compliance [^2^].

GDPR’s Extraterritorial Reach

The GDPR’s extraterritorial reach means that even US businesses need to comply with it under certain circumstances. If your organization offers goods or services to or monitors the behavior of EU data subjects, even if the data is stored elsewhere, you’re covered by the GDPR. If it’s the data of an EU resident, then it’s protected by the GDPR [^3^].

Does the GDPR Apply to US Data Subjects?

The GDPR applies to all EU residents and EU-established businesses. So, a US citizen residing in the EU would still be protected by the GDPR. Similarly, a US citizen residing in the US who accesses the services of a primarily EU-based business would be protected by the GDPR [^4^]. However, an EU citizen visiting the US and patronizing a primarily US-based business is not protected by the GDPR.

GDPR Requirements for US Companies

To comply with the GDPR, US companies need to understand several key concepts, including what personal data is, what a controller or processor is, and more. Here are some of the basic GDPR requirements:

1. Understanding Personal Data: Personal data includes any information relating to an identified or identifiable natural person [^5^].
2. Identifying Controllers and Processors: The GDPR defines two entities that manage personal data – controllers and processors. Controllers determine the purpose for and means of processing data, while processors process data on behalf of the controller.
3. Keeping Records of Processing Activities: Both controllers and processors must keep records of processing activities [^6^].
4. Maintaining a Physical Presence in the EU: If you have to comply with the GDPR, GDPR Article 27 requires you to maintain a physical presence in the EU.
5. Establishing a Legal Basis for Processing Personal Data: Before processing EU residents’ personal data, there must be a legal basis for that processing to occur [^7^].

GDPR Penalties for US Companies

Fines for GDPR noncompliance are serious. Companies that violate the law can be fined 4% of annual global revenue, or 20 million euros, whichever is greater [^8^].

A GDPR Compliance Checklist for US Companies

Here are some steps a US company should complete to comply with GDPR:

1. Understand your company’s data sources and know what your entire digital footprint stores.
2. Create policies and procedures to handle personal data appropriately
3. Tell your customers why you are processing their data and obtain their consent..
4. Implement data protection agreements with your vendors.
5. Determine if your company needs a data protection officer (DPO) and designate one, if needed.
6. Review data breach protocols.
7. Consider implementing solutions that will help you become and stay compliant.

In conclusion, while GDPR may seem overwhelming, with the right knowledge and tools, US companies can meet its requirements and make sure they follow the rules.