Many U.S.-based businesses underestimate the impact of the General Data Protection Regulation (GDPR), which took effect on May 25, 2018. Executives often assume that since their operations are based solely in the United States, this European Union (EU) law does not apply to them. While this is true in many cases, there are significant exceptions for businesses with digital operations that process or store the personal data of EU citizens.
For businesses that meet these criteria, GDPR compliance is mandatory. This includes appointing a Data Protection Officer (DPO) to oversee data security policies, ensure compliance, and act as a liaison with regulatory bodies.
If your organization processes data from EU citizens or operates in a regulated industry, understanding GDPR requirements and the DPO’s responsibilities is essential. Below, we provide a high-level overview to help you navigate GDPR compliance.
GDPR Requirements: Ensuring Compliance
The GDPR was established to give EU citizens greater control over their personal data and to create a uniform data protection framework across the EU. Its goal is to simplify regulations while ensuring that businesses implement strong security measures to protect customer data. Non-compliance with GDPR can lead to significant penalties—up to 4% of a company’s global revenue or €20 million, whichever is higher. For instance, in October 2024, LinkedIn was fined €310 million ($335 million) by the Irish Data Protection Commission for breaching data privacy regulations.
Key GDPR Compliance Requirements
Before diving into the specific requirements, it is essential to understand that GDPR aims to standardize data protection across the EU and beyond, ensuring that businesses prioritize security and privacy.
- Data Protection Measures: Businesses must protect customer data from unauthorized access, misuse, or exploitation by implementing strong security protocols.
- Transparency & Consent: Companies must obtain explicit, informed, and unambiguous consent from users before collecting their personal data.
- Data Rights for Individuals: GDPR grants individuals rights over their data, including the right to access, correct, and erase their information.
- Data Breach Notification: Organizations must report data breaches to the appropriate authorities within 72 hours of discovery.
- Legal Basis for Data Processing: Businesses must have a valid legal reason for processing personal data, such as contractual necessity or legitimate interest.
Who Needs to Comply with GDPR?
GDPR applies to any company—regardless of location—that processes the personal data of EU citizens. Industries such as eCommerce, SaaS, travel, hospitality, and financial services are particularly affected. Even if a business is not physically located in the EU, if it collects or processes EU consumer data, it must comply with GDPR regulations.
Data Protection Officer (DPO): Role and Responsibilities
If your company falls under GDPR jurisdiction, appointing a Data Protection Officer (DPO) is critical. The DPO is responsible for ensuring that the organization meets GDPR requirements and maintains secure data protection practices.
Who Needs a DPO?
A DPO is mandatory for organizations that:
- Process large-scale personal data, including profiling and tracking.
- Handle sensitive data (e.g., biometric, health, or financial data).
- Act as a public authority processing personal data.
Even if a business is not required to appoint a DPO, having one can help maintain a strong security posture and reduce compliance risks.
Key Responsibilities of a DPO
A Data Protection Officer plays a crucial role in ensuring that an organization upholds GDPR standards and protects personal data. Below are the core responsibilities of a DPO:
- Overseeing GDPR Compliance: Ensure that all data handling practices align with GDPR standards.
- Employee Training: Educate employees on data protection policies and conduct regular compliance training.
- Risk Assessments & Audits: Regularly review and assess data security risks and internal policies.
- Liaison with Regulatory Authorities: Act as a point of contact between the organization and supervisory authorities.
- Maintaining Records of Data Processing: Keep an accurate record of how the organization collects, processes, and stores personal data.
- Handling Data Subject Requests: Manage and respond to consumer data access, deletion, and modification requests.
Building a GDPR-Compliant Organization
Hiring an Internal vs. External DPO
Companies can either appoint an internal employee or hire an external, contract-based DPO. An internal DPO must have expertise in data protection laws, cybersecurity, and risk management, while also remaining independent in decision-making. However, smaller organizations may find it more effective to outsource the DPO role to a third-party specialist who has in-depth GDPR knowledge and can ensure compliance without internal conflicts of interest.
DPO Expertise and Cultural Fit
A qualified DPO should:
- Have a strong background in privacy law, IT security, and compliance.
- Stay updated with evolving data protection regulations.
- Communicate data security risks and compliance needs to leadership.
- Offer objective recommendations, even when faced with resistance.
A DPO must be independent—not influenced by company executives—and able to enforce GDPR compliance without fear of retaliation. The ideal DPO should seamlessly integrate into a company’s culture while maintaining their regulatory obligations.
Why GDPR Compliance Matters
The reach of GDPR extends beyond Europe, making compliance essential for U.S. businesses with international operations. Appointing a Data Protection Officer (DPO) not only ensures regulatory compliance but also strengthens cybersecurity efforts and builds consumer trust. Even if GDPR does not currently apply to your business, implementing strong data protection measures now can prepare you for future global regulations and reduce your risk of cyber threats.
If you need guidance on GDPR compliance, DPO requirements, or cybersecurity best practices, RSI Security is here to help. Contact us today to learn more about our compliance advisory services.
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