Malcolm Rivera
The European Union's General Data Protection Regulation (GDPR) sets a high standard for data privacy worldwide. It applies to organisations that collect, store or hold personal data belonging to EU residents in EU member states. The US data privacy landscape has evolved to align more closely with the EU's approach, but there are still significant differences. Notably, the US lacks a comprehensive data privacy law that applies to all types of data and companies, instead relying on a fragmented approach with various regulations governing different sectors and data types. This includes laws like HIPAA, which protects sensitive patient healthcare information. The California Consumer Privacy Act (CCPA) is the closest US equivalent to the GDPR, applying to California residents. Other state laws, like the Colorado Privacy Act (CPA), also offer stronger protection of personal data for their residents.
| Characteristics | Values |
|---|---|
| US data protection laws | Changed considerably in recent years |
| EU data protection laws | General Data Protection Regulation (GDPR) |
| GDPR | Comprehensive data privacy law |
| GDPR applicability | Organisations that collect, store or hold personal data belonging to EU residents in EU member states |
| Personal data definition | Any information involved in the processing of data that relates to an identified or identifiable natural person (data subject) |
| GDPR compliance | Organisations operating within EU countries, that sell goods or services to EU citizens, or that monitor the behaviour of data subjects |
| US data protection laws | Fragmented approach with various regulations governing different sectors and types of data |
| US data protection laws examples | Health Insurance Portability and Accountability Act (HIPAA) |
| US state-specific data privacy laws | California Consumer Privacy Act (CCPA), Colorado Privacy Act (CPA), Virginia Consumer Data Protection Act (VCDPA) |
| CPA definition of personal data | Information that is linked or reasonably linkable to an identified or identifiable individual |
| CPA applicability | Entities that "conduct business" in Colorado or produce or deliver commercial products or services "intentionally targeted" to Colorado residents |
| CPA scope | Entities must control or process personal data of a minimum number of consumers (thresholds vary) |
| CCPA applicability | Entities that "do business" in California with annual gross revenues greater than $25 million |
| VCDPA applicability | Entities that "conduct business" in Virginia or produce products or services "targeted" to Virginia residents with specific data processing thresholds |
| EU-US data transfers | EU-US Data Protection Umbrella Agreement (2016) provides high privacy safeguards for transatlantic law enforcement cooperation |
| EU-US Privacy Shield Framework | Designed by US Department of Commerce and European Commission to facilitate compliance with EU data protection requirements during data transfers |
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What You'll Learn
The General Data Protection Regulation (GDPR)
The GDPR establishes the obligations of data controllers and processors, who are responsible for the processing of personal data. These obligations include implementing appropriate security measures and providing transparent information to individuals about the processing of their data. Data controllers are required to notify individuals of personal data breaches and may be held liable for infringements of the GDPR, resulting in compensation for affected individuals.
The regulation gives individuals more control over their personal information by providing rules for the collection, processing, and transferring of their data. It also simplifies the terminology and regulations for international businesses operating within the EU and EEA. The GDPR applies to data collected or processed from individuals located within the EU and EEA, but it also governs the transfer of personal data outside these regions.
The GDPR has set a high bar for privacy protection and has influenced data protection laws worldwide. It has been adopted by the United Kingdom as "UK GDPR" and has inspired similar laws in other countries, including the California Consumer Privacy Act (CCPA) in the United States.
Overall, the GDPR is a significant component of EU privacy law and human rights law, enhancing individuals' control and rights over their personal information.
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EU-US Privacy Shield Framework
The EU-US Privacy Shield Framework was designed by the US Department of Commerce and the European Commission to enable companies on both sides of the Atlantic to comply with data protection requirements when transferring personal data from the European Union to the United States. The framework was put in place to replace the International Safe Harbor Privacy Principles, which were declared invalid by the European Court of Justice in October 2015.
The EU-US Privacy Shield went into effect on 12 July 2016 following its approval by the European Commission. The purpose of the framework was to enable US companies to more easily receive personal data from EU entities under EU privacy laws meant to protect European Union citizens. It was designed to provide a mechanism for companies to comply with EU data protection requirements when transferring personal data from the EU to the US in support of transatlantic commerce.
On 25 January 2017, US President Donald Trump signed an executive order stating that US privacy protections would not be extended beyond US citizens or residents. This order was later repealed by President Joe Biden on 20 January 2021. However, on 16 July 2020, the Court of Justice of the European Union issued a judgment declaring the EU-US Privacy Shield Framework invalid, as it did not provide adequate protections to EU citizens from government surveillance. As a result, the framework is no longer a valid mechanism for complying with EU data protection requirements when transferring personal data from the EU to the US.
Despite this, the EU-US Privacy Shield Framework still imposes obligations on its participants. US-based organizations can voluntarily join the framework by self-certifying their commitment to comply with its requirements, which then becomes enforceable under US law. In 2022, the US and EU announced a new data transfer framework called the Trans-Atlantic Data Privacy Framework, which would allow EU citizens to pursue data privacy violations through a new "Data Protection Review Court". This new framework replaces the EU-US Privacy Shield.
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US data protection laws
At the federal level, the US Federal Trade Commission (FTC) is responsible for protecting consumers against unfair or deceptive trade practices, including those related to privacy and data security. The US also has sector-specific privacy and data security laws at the federal level, such as the Health Insurance Portability and Accountability Act (HIPAA), which protects sensitive patient healthcare information. Other federal laws and regulations apply to financial institutions, telecommunications companies, credit reporting agencies, and healthcare providers.
In recent years, there has been a growing trend for US states to introduce their own comprehensive data privacy laws. California was the first state to do so in 2018 with the California Consumer Privacy Act (CCPA), which provides broad individual rights and imposes requirements and restrictions on the collection, use, disclosure, and processing of personal information of California residents. Since then, over 15 other states, including Texas, New York, Rhode Island, Minnesota, Maryland, and Tennessee, have followed suit and enacted their own comprehensive data privacy legislation. These laws aim to provide stronger protection of personal data and greater transparency around how data is shared.
While the US data protection landscape has been changing to align more with the EU's comprehensive approach, significant differences remain. The lack of a comprehensive national privacy law in the US has led to a fragmented legal landscape, with varying levels of protection across states. However, efforts to pass a federal omnibus law have been stifled due to political, industry, and complex privacy concerns. As a result, the US data protection laws continue to be a complex patchwork of regulations, with ongoing updates and amendments to address the evolving nature of data privacy.
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California Consumer Privacy Act (CCPA)
The California Consumer Privacy Act (CCPA) is a law that protects the personal information of California residents. It was introduced in 2018 and is the closest US equivalent to the EU's General Data Protection Regulation (GDPR). The CCPA applies to any business that collects consumers' personal data, does business in California, and meets at least one of the following criteria: annual gross revenues of over $25 million; purchases, receives, or sells the personal information of 100,000 or more consumers or households; or earns more than half of its annual revenue from selling consumers' personal information.
The CCPA grants California residents several rights regarding their personal data. These include the right to know what personal data is being collected, whether it is being sold or disclosed, and to whom; the right to say no to the sale of personal data; the right to access and request deletion of personal data; and the right to not be discriminated against for exercising these privacy rights.
Businesses covered by the CCPA must implement reasonable security practices, provide required public notices, honour consumer rights requests, and ensure non-discrimination in their practices. They must also offer at least two methods for consumers to submit requests to opt out of the sale of their personal information, such as a toll-free number, email address, website form, or hard copy form.
The CCPA also outlines enforcement actions and penalties for non-compliance. Consumers may seek statutory damages between $100 and $750 for each California resident and incident, or actual damages (whichever is greater), by providing written notice and allowing a 30-day period for the business to correct the violations. The California Attorney General's Office has the option to prosecute the company instead of allowing civil suits. Fines of up to $7,500 for each intentional violation and $2,500 for each unintentional violation may also be imposed.
The CCPA has been updated with amendments from the California Privacy Rights Act of 2020 (CPRA), which expanded personal information protection rights and business obligations, particularly around sensitive information. The California Privacy Protection Agency was established to implement, enforce, and educate the public about the CCPA and CPRA.
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Colorado Privacy Act (CPA)
In the United States, there is a lack of comprehensive data privacy laws that apply to all types of data and companies. Instead, data protection rules are governed by various regulations specific to different sectors and types of data. The Health Insurance Portability and Accountability Act (HIPAA), for instance, protects sensitive patient healthcare information.
The Colorado Privacy Act (CPA) is a part of the State of Colorado's Consumer Protection Act, which came into effect on July 1, 2023. The CPA grants Colorado consumers new rights and control over their personal data, including the right to access, delete, and correct their personal data. It also allows consumers to opt out of the sale of their personal data or its use for targeted advertising and certain kinds of profiling.
The CPA applies to entities, including nonprofits, that conduct business in Colorado or provide commercial products or services to Colorado residents. It specifically targets entities that process the personal data of more than 100,000 individuals in a year or derive revenue from the sale of personal data of 25,000 or more individuals. The CPA also applies to service providers, contractors, and vendors that manage or provide services related to this data.
The CPA outlines 13 components of a data protection assessment, addressing the nature, purpose, scope, risks, and governance of personal data processing. It requires entities to conduct these assessments before processing activities that may present a heightened risk to consumers, such as targeted advertising, profiling, or selling data. Additionally, the CPA requires entities to obtain opt-in consent for processing sensitive data, with consent standards similar to those set by the EU's General Data Protection Regulation (GDPR). Consent must be obtained through clear, affirmative action and be specific, informed, unambiguous, and freely given.
The CPA grants the Colorado Attorney General's Office the authority to enforce the Act, with civil penalties of up to $20,000 per violation for non-compliance. These penalties are considerably higher than those in existing frameworks in states like California and Virginia.
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Frequently asked questions
The EU's General Data Protection Regulation (GDPR) is a comprehensive data privacy law that applies across sectors and to companies of all sizes, and sets the standard for data privacy worldwide. The US does not have a comparable comprehensive data privacy law—it lacks a privacy-first approach and instead has a fragmented approach with various regulations governing different sectors and types of data.
The California Consumer Privacy Act (CCPA) is the US law that is most comparable to the GDPR. It applies to consumers who are California residents.
There are also data privacy laws in Virginia and Colorado. The Colorado Privacy Act (CPA) protects the data of Colorado residents, and the Virginia Consumer Data Protection Act (VCDPA) applies to entities that conduct business in Virginia or produce products or services targeted at Virginia residents.
The EU defines personal data as any information involved in the processing of data that relates to an identified or identifiable natural person.
