01 February 2018
Are you doing business in the European Union (EU)? Perhaps your business processes personal information of individuals in the EU? If so, then the deadline for compliance with the EU’s General Data Protection Regulation (GDPR) is fast approaching.
The GDPR, which takes effect on 25 May 2018, imposes strict obligations on businesses subject to it, including requirements in relation to governance, consent, profiling and data portability. To avoid the risk of significant penalties for failing to comply, understanding whether the GDPR applies to your Australian business is critical.
The GDPR has a wide territorial scope. It applies to all businesses with an establishment in the EU. It also applies to businesses outside the EU that engage in data processing activities relating to:
While “data processing” has no direct equivalent in the language of Australian privacy laws, it can be considered equivalent to collecting, using and transferring personal information.
Interestingly, the GDPR goes beyond protecting EU citizens, and offers protection to all “individuals in the EU”. As such, if a business knows that its customers will use their services while in the EU, the GDPR may apply.
There are no carve outs for businesses which are already subject to privacy laws in their own jurisdiction – those businesses will be expected to simultaneously comply with applicable local privacy laws as well as the GDPR.
A company may be doing business in the EU where:
All these criteria require some “active” association with the EU. The preamble to the GDPR clarifies that the mere accessibility of a business’s website from the EU is insufficient to establish that it is doing business in the EU.
However, the level of engagement with the EU which can bind an Australian business to the GDPR can arise in subtle and surprising ways. Businesses should consider data flow arrangements with all affiliate entities, and advertising arrangements which may reach individuals in the EU.
The GDPR also applies to businesses that are monitoring the behaviour of individuals in the EU. This includes collecting information about individuals and using it to predict the person’s preferences, behaviour and attitudes. It may capture businesses who use information collection technologies like cookies to build a profile about website guests and deliver targeted content to specific individuals.
Businesses using this technology, especially those in the e-commerce space, should be particularly wary that the GDPR may apply to their collection and use of personal information.
Penalties under the GDPR are significantly higher than in most other privacy and data protection jurisdictions around the world. The obligations of the GDPR are split into two severity categories:
This section briefly sets out some of the key obligations under the GDPR. However, this list is not comprehensive and if the GDPR applies to your business, you should seek comprehensive advice about the obligations imposed by it.
The Office of the Australian Information Commissioner has also published resources to assist Australian businesses to understand obligations under the GDPR.
Businesses should make sure they are across their privacy and information management practices. A comprehensive audit should reveal whether the GDPR may apply and, if so, which practices need to be modified and aligned to the GDPR requirements, and how you will be able to demonstrate compliance.
With the GDPR taking effect on 25 May 2018, assessing GDPR compliance is escalating in priority.
 There are limited exceptions to this obligation for public authorities or bodies, and businesses which do not process sensitive information and whose information and data practices are unlikely to result in a risk to the rights and freedoms of people.
 See https://www.oaic.gov.au/agencies-and-organisations/business-resources/privacy-business-resource-21-australian-businesses-and-the-eu-general-data-protection-regulation.
The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.