Gdpr Compliance For Cross-Border Deals.
GDPR and Cross-Border Deals
The General Data Protection Regulation (GDPR) is an EU regulation (Regulation (EU) 2016/679) designed to protect personal data of individuals within the EU/EEA. Cross-border deals—such as mergers, acquisitions, joint ventures, or outsourcing—often involve the transfer of personal data across countries.
Key challenges in cross-border transactions include:
Data transfers outside the EU/EEA
Compliance with multiple jurisdictions
Due diligence on data processing practices
Accountability and liability for data breaches
GDPR applies when:
Processing of personal data occurs in the EU, regardless of where the company is based.
Offering goods or services to individuals in the EU.
Monitoring the behavior of EU individuals (e.g., tracking users across borders).
2. GDPR Compliance Checklist for Cross-Border Deals
Data Mapping & Inventory
Identify all personal data involved in the transaction.
Determine if data will move outside the EU/EEA.
Due Diligence
Evaluate the data protection practices of the target company.
Check for prior data breaches or regulatory fines.
Data Transfer Mechanisms
GDPR restricts transfers outside the EU/EEA unless adequate safeguards exist, such as:
Adequacy decision by the European Commission
Standard Contractual Clauses (SCCs)
Binding Corporate Rules (BCRs)
Contractual Safeguards
Include GDPR compliance clauses in transaction agreements covering:
Roles of controller and processor
Data protection obligations
Breach notification procedures
Notification and Consent
Ensure that consents obtained from EU data subjects are valid for the new processing purposes.
Post-Deal Integration
Harmonize privacy policies and data processing procedures across jurisdictions.
3. Relevant Case Laws
Here are six significant GDPR-related cases that impact cross-border deals:
1. Schrems II (C-311/18, 2020)
Summary: The European Court of Justice (ECJ) invalidated the EU-US Privacy Shield.
Impact: Cross-border transfers to the US require additional safeguards like SCCs and risk assessments.
Lesson: Due diligence must include an assessment of the legal framework in the recipient country.
2. Google Spain SL v. AEPD (C-131/12, 2014)
Summary: Established the “right to be forgotten” for EU data subjects.
Impact: Cross-border transactions must respect data subject rights, including deletion requests.
Lesson: Companies acquiring EU-based businesses must honor prior data subject rights.
3. Facebook Ireland Ltd. v. Data Protection Commission (DPC) (2022)
Summary: Irish DPC fined Facebook for failing to comply with GDPR in cross-border data transfers.
Impact: Highlights supervisory authorities’ powers in cross-border contexts.
Lesson: Acquirers must ensure existing international operations comply with GDPR.
4. Breyer v. Germany (C-582/14, 2016)
Summary: IP addresses can be personal data when combined with other information.
Impact: Companies must identify all types of personal data before cross-border transfer.
Lesson: Data mapping in due diligence must include technical identifiers.
5. H&M v. Hamburg DPA (2020)
Summary: H&M was fined for excessive employee monitoring and data collection.
Impact: Shows risks of processing sensitive employee data during cross-border integrations.
Lesson: M&A due diligence must assess compliance of HR and employee data practices.
6. WhatsApp Ireland Ltd. v. DPC (2021)
Summary: WhatsApp fined for transparency failures in data sharing with Facebook.
Impact: GDPR requires clear transparency in cross-border sharing.
Lesson: Transaction agreements must include disclosure of data flows to avoid liability.
4. Key Takeaways for Cross-Border Deals
Conduct thorough GDPR due diligence for the target company.
Ensure lawful cross-border data transfers using SCCs or BCRs.
Review prior consents and privacy notices.
Integrate compliance programs post-deal.
Document everything to demonstrate accountability to regulators.
RELATED Blog
comments