The European Union’s (“EU”) General Data Protection Regulation (“GDPR”) turned one year old on May 25th. European data protection regulators celebrated by continuing to work through a rising number of complaints and infractions, and by stepping up their monitoring for violations. US companies are directly in the crosshairs. Whether based in the EU or not, a company is potentially subject to the GDPR (and its stiff fines up to 4% of annual global revenue) if it offers goods or services to data subjects located in the EU, or monitors individuals’ online behavior or personal information in the EU. This means that a US company engaged in the common business practice of collecting data from its EU customers must assess and implement business practices to ensure GDPR compliance.

The US and EU engaged in approximately $1.3 trillion dollars in trade last year. With that level of economic activity, and accompanying data flows, many US companies should already have in place the basic structures for GDPR compliance. However, recent surveys suggest that a significant number of companies impacted by the GDPR are still grappling with compliance. In a recent Forrester Research study, “Security Through Simplicity,” over half of the responding IT decision-makers revealed that their companies had not yet carried out even basic GDPR compliance steps such as vetting third-party vendors, hiring data protection officers, training employees, setting up mechanisms for the “72-hour data breach notification” requirement, and collecting evidence and documenting efforts to address GDPR compliance risks. Further, only about 4,650 US companies are currently registered and self-certified with the EU-US Privacy Shield framework (compared to the over 100,000 mid- to large-sized companies in the US, according to business census data). Such certification goes a long way toward permitting a US company to receive certain EU data in a GDPR compliant manner.


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When the European Commission re-approved the Privacy Shield agreement during its first annual review in the fall of 2017, permitting the transatlantic transfer of personal information to compliant U.S. companies to continue, it did so with a number of reservations. As the Privacy Shield agreement fast approaches its second annual review at the end of this week, it remains to be seen if the steps taken by the U.S. government at the close of the summer will be enough to satisfy skeptical European lawmakers.

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