What US-based companies need to know about GDPR
Key GDPR Principles US Businesses Must Follow
The EU General Data Protection Regulation (GDPR) strengthens and unifies personal data protection across the EU. It applies to any company that handles the personal data of EU citizens, residents, or visitors inside or outside the EU. If your US-based business collects, processes, or stores data like names, email addresses, phone numbers, or IP addresses belonging to people in the EU, you must comply with GDPR.
At its core, GDPR demands transparency, accountability, and fairness. You must process data lawfully, limit its use to specified purposes, minimise what you collect, ensure accuracy, and keep it secure. You also need to respect individuals’ rights, such as the right to access, correct, or delete their data.
Does GDPR Apply to US-Based Companies?
Yes. GDPR has extraterritorial reach and applies regardless of your company’s location. If your US business offers goods or services (free or paid) to individuals in the EU or monitors their behaviour, such as tracking browsing habits, you must comply with GDPR.
The regulation doesn’t stop at EU borders. Article 50 of the GDPR outlines international cooperation mechanisms, and foreign governments often support enforcement through mutual assistance treaties and cross-border collaboration. So, even if you operate solely in the US, you’re not out of GDPR’s scope if you handle EU personal data.
GDPR Compliance Requirements for US Companies
US companies must understand and implement several key GDPR obligations to stay compliant. First, they must communicate how and why they process personal data. They must also obtain valid consent where required, respond promptly to data subject rights requests, and maintain detailed records of their data processing activities.
If you don’t have a physical presence in the EU but still process EU personal data, you must appoint an EU Representative under Article 27. This representative is your liaison with EU Supervisory Authorities and affected data subjects. They handle questions, forward complaints, and keep documentation accessible for inspection.
Since Brexit, you must appoint a separate UK Representative if you also have data subjects in the UK. You can’t use the same contact point for both jurisdictions—each region now has its legal framework.
GDPR and US Privacy Laws: How They Compare
While GDPR enforces a comprehensive, rights-based approach to privacy, most US privacy laws take a more sector-specific and risk-based stance. In the US, privacy regulations like HIPAA (for health data), COPPA (for children’s data), and CCPA (in California) protect personal data in specific contexts or industries.
GDPR, however, protects all personal data across all sectors. If you run an e-commerce website, a SaaS platform, or a marketing agency and process EU personal data, you must follow the same strict rules. Consent, transparency, accountability, and individual rights apply universally.
This broad and consistent application makes GDPR significantly stricter and more comprehensive than most US laws. It also means that US businesses must go further than their local privacy requirements when handling EU data.
GDPR Penalties: What’s at Stake for US Companies?
Non-compliance with GDPR is expensive, both financially and reputationally. Supervisory Authorities across the EU can issue fines of up to €20 million or 4% of global annual turnover, whichever is higher. These penalties don’t just hit large corporations. Small and mid-sized companies have also been fined for mishandling, poor security, or ignoring data subject rights.
The risk doesn’t stop at fines. Non-compliance can damage your brand, erode customer trust, and cause your business partners or clients to walk away. Many EU-based organisations won’t work with companies that don’t meet GDPR requirements. So, staying compliant is as much a competitive necessity as a legal one.
How US Businesses Can Stay GDPR Compliant
You need a strategy if your US business handles EU or UK personal data. First, map out your data collection, storage, and processing practices. Identify what personal data you hold, where it’s stored, and how it’s used. Implement clear policies for consent, access requests, and data minimisation.
Next, appoint an EU Representative and, if necessary, a UK Representative. This is a legal requirement under Article 27, and failing to appoint one can lead to regulatory action. Your representative will handle inquiries from authorities and individuals and maintain accessible documentation.
Choosing a knowledgeable, experienced representative is critical. At GDPRLocal, our team supports clients across the USA, UK, EU, and Australia. We help you stay compliant, provide due diligence support, and act swiftly on your behalf.
Beyond representation, we offer services, including Data Protection Officer (DPO) appointments, GDPR training, complete documentation packages, and compliance consulting. You can set up your account with us in under five minutes—and we’ll be with you every step of the way.
If you want to make GDPR compliance simple and stress-free, reach out to us at [email protected] or visit our website for more information.