“European data protection rules will become a trademark people recognise and trust worldwide”. That is how, in January 2012, Viviane Reding – then Vice-President of the European Commission and EU Justice Commissioner – ended her announcement of the widest reform of privacy and data protection law ever attempted. Six years later, this ambitious aim is becoming a reality. Organisations from around the world and well beyond Europe are grappling with the new European General Data Protection Regulation (GDPR) and its impact on their data activities. From Australian banks and South American insurers to US universities and Asian telecoms companies, determining the applicability of the GDPR to their operations has become a critical business decision. As many global companies ponder over the right strategy to privacy compliance, a key question has emerged: which organisations, and under which circumstances, are subject to the territorial scope of the GDPR?
Part 2 of Future-Proofing Privacy: Scope of the Application of the Law. It is absolutely crucial for organisations to know if they are or are not subject to the Regulation. Since the Regulation strengthens data protection principles, requires organisations to demonstrate compliance and ushers in greater enforcement powers for regulators, it is essential for all organisations, public and private, local, national or global, to understand in what circumstances the Regulation will apply to their use of personal data. Unlike EU ‘directives’, EU ‘regulations’ are by nature directly effective in EU Member States and so do not require further implementation into national laws. Previously, European data protection law was governed by the Data Protection Directive. It was the responsibility of Member States to implement the Data Protection Directive into their national law. When the Regulation becomes law, it will apply immediately throughout the EU due to its direct effect. As a consequence, national data protection acts will cease to be relevant for all matters falling within the scope of the Regulation.