PIPEDA vs. GDPR: Key Differences Explained

Both the EU’s General Data Protection Regulation (GDPR) and Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA) are designed to ensure that consumers have control over their personal information and how it’s used by companies.

Although GDPR is widely regarded as the benchmark for data privacy law, the EU has dubbed PIPEDA as “adequate”.

Let’s compare both and understand how they can affect businesses in both Europe and Canada.

» Is your business GDPR compliant? Follow these steps to ensure GDPR compliance

5 Important Differences Between GDPR & PIPEDA

PIPEDA and GDPR share many similarities, from how they define “personal information” to how they impose obligations for breach reporting and the implementation of security measures. Even the roles and functions of their respective supervisory authorities are consistent with one another.

However, there are some significant distinctions:

1. Application, Jurisdiction & Enforcement

GDPR applies to any organization or entity that processes any personal data of any EU residents, whether they have EU offices or not.

It doesn’t apply to “purely personal or household activity” and to organizations with less than 250 employees. GDPR is enforced by data protection authorities (DPAs) from the 27 EU member states. Because the GDPR includes an extraterritoriality provision, it has a widespread impact on companies, even those outside of Europe.

PIPEDA doesn’t mention extraterritoriality. It focuses on organizations in the Canadian private sector that carry out “commercial activities” and collect, use, or disclose personal data.

It doesn’t apply to government entities and some provinces that have their own privacy laws. According to the Office of the Privacy Commissioner of Canada (OPC), PIPEDA could apply in a foreign country if the organization has a real and substantial connection to Canada, such as handling Canadians’ personal data, if its privacy practices affect Canadians, or offering products or services in Canada.

2. Individual & Data Protection

GDPR states that the handling of personal information must guarantee its data security, including protection against unauthorized or unlawful processing, accidental loss, destruction, or damage. To ensure the safety of customer data, businesses must also adhere to Data Protection Principles. They must also have a legal representative in the EU and, in some cases, a Data Protection Officer.

PIPEDA requires organizations to take physical, organizational, and technological precautions to guarantee that personal information is not lost or stolen, accessed without authorization, disclosed to unauthorized individuals, copied, or modified. It also requires the organization to be held accountable and nominate one or more persons to be in charge of privacy compliance.

» What if a data breach occurs? Find out how to avoid data breaches under GDPR

3. Individual Rights

GDPR affords individuals the following rights:

• Right to Data Portability Individuals have the right to acquire data processed based on a contract or permission in a structured, machine-readable manner, and to transfer it without restriction. There is no such right under PIPEDA.
• Right to Erasure Individuals can request the free erasure or deletion of their personal data. Grounds for exercising the right include if the data subject withdraws their consent, there is no other legal reason for processing, or the data is no longer needed for the original intent.
• Right of Access Requests must be responded to within 1 month without “undue delay”. It can be extended by 2 months, but the subject must be notified within 1 month of receiving the request. Unless the requests are unreasonable, excessive, or repetitive, it should be free.
• Right to Be Informed Data subjects should be informed of the purposes of processing in order to validate consent. Other requirements include limiting processing for other purposes, the type of information provided, informing of transfers, automated decision-making, and data retention periods.
• Right to Object Individuals have the right to withdraw consent to personal data processing at any time.

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PIPEDA affords individuals the following rights:

• Right to Erasure PIPEDA requires that if personal information is no longer needed for its original purpose, it must be destroyed, erased, or anonymized.
• Right of Access Organizations must disclose the existence and usage of an individual’s personal information upon request within 30 days, unless the deadline was extended.
• Right to Be Informed Consent is only valid if the data subject understands the nature, purpose, and implications of the collection, use, or disclosure of their personal information.
• Right to Object Individuals can contest an organization’s compliance and require organizations to implement mechanisms to address complaints.

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4. Data Processing Consent & Privacy Requirements

Under GDPR, consent must be explicitly given or affirmed in an unambiguous, oral, or written statement. It must also be clear to the data subject that they have the right to revoke the use of their data at any time through an easy process. Furthermore, data controllers are only permitted to process personal data where there is a valid legal basis for doing so.

PIPEDA requires that organizations collect, use, and disclose personal information only for legitimate purposes. Companies must inform individuals of their privacy practices in a comprehensive, understandable, and unambiguous fashion by highlighting key elements that could influence their privacy decisions.

Additionally, implied consent is deemed acceptable for less sensitive personal information.

5. Penalties & Compensation

Penalties under GDPR can amount to €20 million, or 4% of global revenue. Under PIPEDA, penalties for a data breach can be as high as $100,000, plus costs for the audit and investigation.

» Does your US company need to be GDPR compliant? Learn how to avoid GDPR fines

Conclusion

PIPEDA and GDPR are similar in that they protect users’ information privacy rights. But they each hold businesses accountable for data protection in different ways and impose different requirements. If you’re doing business in the EU or Canada, you need to adhere to their respective data privacy regulations or risk facing heavy fines.

» How does PIPEDA compare with CCPA? Discover the differences between CCPA vs PIPEDA