Does GDPR apply to American companies

Does GDPR apply to American companies?

The GDPR is a European Union data privacy law that compels businesses to keep personal information secure while simultaneously providing individuals more choice over how their information is used.

Noncompliance with the law can result in substantial fines of up to 4% of global revenue or €20 million, depending on the severity and circumstances of the violation.

The GDPR in US makes a significant change in the territorial scope of the new law. The GDPR replaces the 1995 EU Data Protection Directive, which did not apply to companies located outside of the EU.

However, the GDPR may now apply even if a US-based company has no workers or offices within the EU’s borders.

If an US organization handles personal data of an individual located in the EU it is subject to Article 3 of the GDPR. This is the case where the processing relates to the offering of goods or services or the monitoring of behavior that takes place in the EU.

As a result, even if no financial transaction occurs, the GDPR can apply. For example, if your company is based in the United States but has an online presence, sells or markets products via the Internet, or even just conducts a global marketing survey, you may be subject to the GDPR.

Companies based in the United States that do business in the EU but do not have a physical presence in the EU, such as e-commerce, logistics, software services, travel, and hospitality, should already be in the process of ensuring GDPR compliance.

Does GDPR apply to American companies

However, all US-based businesses, particularly those with a large online presence, should determine if their operations fall inside the geographic scope of the GDPR.

GDPR compliance checklist for US companies

  • Conduct an information audit for EU personal data
  • Inform your customers why you’re processing their data
  • Assess your data processing activities and improve protection
  • Make sure you have a data processing agreement with your vendors
  • Designate a representative in the European Union
  • Know what to do if there is a data breach
  • Comply with cross-border transfer laws (if applicable)

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