Data Privacy Compliance: Avoid Fines, Lawsuits, and Regulatory Risk

The GDPR applies to any organization that processes the personal data of individuals located in the European Union, regardless of where the organization is incorporated, imposing obligations on both data controllers and data processors. The CCPA and CPRA apply to for-profit businesses in California that exceed one of three thresholds: annual gross revenues exceeding $25 million, buying or selling the personal data of 100,000 or more consumers, or deriving more than 50 percent of their revenue from selling personal data. Organizations unsure of which data privacy compliance laws apply to their operations should consult data privacy counsel to identify all applicable legal obligations.

A data controller is the entity that determines the purposes and means of processing personal data and bears primary legal responsibility for compliance, including implementing appropriate technical and organizational measures and ensuring that data processors have contractual data protection obligations. A data processor is subject to direct GDPR liability for certain violations, including processing data without a valid controller instruction and engaging subprocessors without authorization. Organizations that share personal data with vendors, cloud providers, or marketing partners should engage cybersecurity governance counsel to review their data processing agreements and ensure that vendor relationships do not create unmanaged compliance exposure.

GDPR requires that every processing activity involving personal data of EU data subjects have a lawful basis, which may include the data subject's freely given consent, the necessity of processing for a contract, or the controller's legitimate interests. Cross-border transfers from the EU to third countries require a valid transfer mechanism, such as the EU-US Data Privacy Framework, standard contractual clauses, or binding corporate rules, and transfers lacking a valid mechanism expose the controller to GDPR enforcement and fines. Organizations that collect or process the personal data of EU data subjects should consult data privacy litigation counsel to assess their lawful basis documentation, data subject rights procedures, and cross-border transfer mechanisms.

The CCPA gives California consumers the right to know what personal information a business collects, the right to request deletion of their personal information, and the right to opt out of the sale of their personal information, and the CPRA further expanded those rights to include the right to correct inaccurate personal information. Businesses subject to CCPA and CPRA must update their privacy policies to include required disclosures, post a conspicuous opt-out link on their website, and honor consumer rights requests within 45 days. Businesses that collect personal information from California consumers should consult data privacy class action counsel to assess whether their privacy policy disclosures, opt-out mechanisms, and consumer rights response processes satisfy CCPA and CPRA requirements.

All 50 US states have enacted data breach notification laws requiring businesses to notify affected individuals within timeframes of 30 to 90 days, and many require simultaneous notification of state attorneys general. Under GDPR, notification to the relevant supervisory authority is required within 72 hours of a personal data breach likely to result in a risk to data subjects. Organizations that experience a data breach or suspect unauthorized access to personal data should immediately engage data breach counsel to evaluate notification obligations and manage communications with regulators and affected individuals.

GDPR enforcement can result in fines of up to 20 million euros or four percent of total worldwide annual turnover for violations including processing without a lawful basis. The FTC enforces data privacy and security requirements against US companies under Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices, and has brought significant enforcement actions against companies that misrepresented their data practices. Businesses that have received an FTC civil investigative demand or a class action complaint should immediately engage cybersecurity class action defense counsel to assess the scope of the claim and develop a coordinated litigation and remediation strategy.

A Data Protection Impact Assessment (DPIA) is required under GDPR whenever a processing activity is likely to result in a high risk to the rights and freedoms of natural persons, including large-scale processing of sensitive data and automated decision-making. Privacy by Design principles require organizations to embed data protection into the design of their products, systems, and processes from the outset, and these principles are codified in the GDPR as a legal obligation for data controllers. Organizations deploying new technologies or launching products that process personal data at scale should engage cybersecurity legal consulting counsel to assess whether a DPIA is required and to ensure that Privacy by Design principles are incorporated into the product development framework.

A data privacy compliance audit begins with a comprehensive data inventory that maps every category of personal data the organization collects, the legal basis for each processing activity, and the measures in place to protect that data. Audit findings should be prioritized by regulatory risk and assigned to responsible owners with remediation deadlines, and the organization should implement a periodic audit cycle that updates the compliance program as new laws are enacted. Organizations seeking to build or strengthen their data privacy compliance function should engage data governance accountability counsel to structure the audit, evaluate remediation priorities, and develop a compliance roadmap that addresses current and future regulatory obligations.