EU Data Privacy Laws & US Businesses: What Companies Must Know (GDPR Guide)
Updates February 10, 2026In an increasingly connected world, data moves across borders at the speed of the internet. For U.S. companies that collect or process personal information from individuals in the European Union, EU data privacy laws like the General Data Protection Regulation (GDPR) can impose real legal obligations — even if the business has no physical presence in Europe. Understanding these rules isn’t just good practice — it’s essential to avoiding enforcement actions, reputational harm, and costly compliance gaps.
What Is the GDPR?
Unlike the United States—where privacy protections are fragmented across sectors and states—the European Union operates under a single, comprehensive data-protection framework. That framework is the General Data Protection Regulation (GDPR), which became enforceable on May 25, 2018, and applies broadly across industries, including to many organizations located outside Europe, such as U.S. companies (See Regulation (EU) 2016/679).
The GDPR governs both data privacy and data security. Data privacy concerns an individual’s right to control how personal information is collected, used, and shared—focusing on governance and lawful processing. Data security, by contrast, centers on safeguarding information from unauthorized access, breaches, or misuse.
The regulation applies to:
Organizations established within the EU that process personal data; and
Organizations outside the EU when their processing relates to
offering goods or services to individuals in the EU, or
monitoring the behavior of individuals located in the EU.
Importantly, mere accessibility of a website from Europe is not enough to trigger GDPR jurisdiction. Regulators look for intent to target EU residents, such as EU-specific marketing, pricing in euros, or localized services. In short, applicability turns on territorial reach and targeting—not citizenship of the user.
What Is Personal Data?
Personal data includes any information relating to an identified or identifiable natural person (a “data subject”). Examples include:
Name or identification number
Location data or IP address
Online identifiers or device information
Factors tied to physical, genetic, mental, economic, cultural, or social identity
The GDPR regulates the entire lifecycle of this information, including:
Collection
Use or processing
Storage
Transfer
Retention and deletion
Who Must Comply With the GDPR?
Entities handling personal data generally fall into two categories:
Controllers - A data controller determines why and how personal data is processed. If your organization decides the purpose and means of processing, it is acting as the controller. Employees handling data internally do so under the controller’s authority.
Processors - A data processor handles personal data on behalf of the controller, often as an external service provider (e.g., cloud vendors, payroll services). Controller-processor relationships must be governed by a data processing agreement meeting GDPR requirements.
Lawful Bases for Collecting and Processing Data
Processing personal data requires a valid legal basis under the GDPR. Recognized bases include:
Consent - Consent must be freely given, specific, informed, and revocable. Organizations relying on consent must allow withdrawal as easily as it was given.
Performance of a contract - Processing is lawful when required to enter into or perform a contract, such as using a shipping address for an online purchase.
Legitimate interests - Organizations may process data for reasonable business purposes (e.g., fraud prevention or certain marketing), but only after performing a balancing test to ensure individual rights are not overridden.
Vital interests - Applies primarily to life-or-death emergencies, such as medical care.
Legal obligation - Processing required by law or regulation, including employment, tax, or security compliance.
Public task / public interest - Processing performed by government bodies or entities acting under governmental authority.
Rights of Data Subjects
Individuals whose data is processed receive extensive protections, including:
Right to be informed about data use
Right of access to their data
Right to rectification of inaccuracies
Right to erasure (“right to be forgotten”) in defined circumstances
Right to restrict processing
Right to data portability
Right to object to certain processing
Rights related to automated decision-making and profiling
These rights impose operational obligations on organizations to respond within statutory timelines.
How Organizations Achieve GDPR Compliance
Compliance typically begins with data mapping—documenting:
What personal data is collected
Where it is stored
Who receives it
How long it is retained
When and how it is deleted
From there, organizations build a structured compliance program aligned with GDPR requirements. Crucially, GDPR compliance is ongoing governance, not a one-time project. It requires continuous attention across:
Policies and procedures
Employee training
Security controls
Vendor management
Technology systems
Risks of Non-Compliance
Failure to comply with the GDPR can result in:
Reputational Harm - Security incidents or regulatory findings often generate negative media exposure, reducing consumer trust.
Loss of Commercial Relationships - Business partners subject to GDPR may refuse to work with non-compliant vendors.
Regulatory Fines - Supervisory authorities may impose fines of up to: €20 million, or 4% of global annual turnover, whichever is higher. Large enforcement actions have included penalties against British Airways and Marriott International, illustrating regulators’ willingness to act.
Civil Claims - Individuals may pursue compensation for damages caused by GDPR violations. While U.S.-style class actions are less common in Europe, collective redress mechanisms are expanding.
Who Enforces the GDPR?
Enforcement is carried out by independent national data-protection authorities within each EU member state, coordinated through the European Data Protection Board (EDPB). For example, the United Kingdom’s Information Commissioner’s Office (ICO) enforces UK GDPR post-Brexit, while EU member states rely on their respective supervisory authorities.
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*This article is provided for informational purposes only, and does not constitute legal advice, counsel or representation.
