Does the EU GDPR Apply to Your Business? What International Companies Need to Know

The EU General Data Protection Regulation (GDPR) is one of the most comprehensive data privacy laws in the world.

It’s designed to protect the personal data of people in the European Union (EU) and the European Economic Area (EEA), and since taking effect in May 2018, it’s changed how companies handle personal data — outlining strict rules and imposing heavy fines for those who don’t follow them. Ignoring the GDPR can lead to serious consequences. Businesses can face fines of up to €20 million or 4% of their global annual revenue — whichever is higher.

Beyond financial penalties, companies risk regulatory investigations, damage to their reputation, and even restrictions on operating in the EU. Any of these can be catastrophic — and so the need for compliance with the EU GDPR should be a high priority for all businesses that it applies to.

However, given the complexity of the EU GDPR and its scope, understanding whether the law applies to your business is a logical first step. This article helps you understand whether the EU GDPR applies to your business and provides steps you can take to ensure compliance if it does.

Who Needs to Comply with the EU GDPR?

A fundamental complexity of the EU GDPR is that it applies also to businesses outside of the EU. Yes, you read that correctly.

This is owing to something known as “extra territorial” scope, or reach. This means that many businesses from outside Europe can be required to comply with the law, depending on how they interact with EU residents’ data. This global reach has made GDPR compliance an important concern for companies everywhere.

The EU GDPR applies to organizations in two key situations:

1. Businesses based in the EU: If your company is established in an EU/EEA country, you need to follow the EU GDPR for all personal data you handle, no matter where the people you’re dealing with are located.
2. Businesses outside the EU processing EU personal data: If your company is established outside the EU but still interacts with EU residents’ data, the EU GDPR may apply to you. Under Article 3(2) of the EU GDPR, this includes businesses that: a. Offer goods or services to people in the EU (whether free or paid) b. Track or monitor the behavior of people in the EU (such as through online tracking)

Therefore, even if your business has no physical presence in Europe, you may still have GDPR obligations.

What is the Extra-Territorial Reach of the EU GDPR?

Even if your company isn’t based in the EU, you may still need to comply with the EU GDPR if you sell products or services to EU-based customers or track or monitor people in the EU, through activities such as analyzing their online behavior through website analytics.

Your business doesn’t even necessarily need to target the entire EU to be covered by the GDPR - engaging with or tracking customers in any EU Member State can bring your business under its scope.

If your business falls under the extra-territorial scope of the EU GDPR, then it could be that you need to appoint an EU Representative under Article 27 of the regulation.

Do You Need an EU Representative?

If your company does not have a physical presence in the EU but does business in the EU and is therefore covered by the GDPR, you may be required to appoint an EU representative under Article 27. A representative is a person or company appointed by a non-EU business to act as your local contact for EU regulators and individuals whose data you process.

An EU representative is required unless all of the following criteria are met:

• Your EU data processing is only occasional, which is only from time to time and non-systematic; and
• the data you process does not involve significant amounts of special category data (e.g., health, biometrics) or criminal convictions and offences; and
• the processing poses low risk to individuals.

It is hard to meet all of these criteria, in particular the criterion of processing data only occasionally proves to be a big hurdle for most businesses.

When you conclude that your business needs a representative you need to:

• appoint a representative which is based in the EU and
• include the contact details of the representative in your privacy policies.

Regulators may reach out to them for enforcement actions, making this an important step for businesses subject to the EU GDPR.

How to Understand If the EU GDPR Applies to Your Business

To understand whether the EU GDPR applies to you, there are two main questions you should consider:

1. Do You Offer Goods or Services to People in the EU?

Under Article 3(2)(a), businesses outside the EU need to comply with the GDPR if they actively target EU customers. Simply having a website that EU residents can access isn’t enough.

Signs that your company is engaging with the EU market include:

• Offering a website in an EU language (besides English, if you’re outside the EU).
• Displaying prices in euros (EUR) or other EU currencies.
• Shipping products or offering services to EU locations.
• Running ads or marketing campaigns directed at EU users.
• Using domain names associated with EU countries (e.g., .de, .fr, .eu).

If your business meets any of these conditions, the EU GDPR likely applies.

2. Do You Track or Monitor EU Residents?

The EU GDPR may apply to your company if it tracks or profiles EU individuals, as outlined in Article 3(2)(b). This applies to businesses that use personal data for behavioral analysis, targeted advertising, or similar purposes.

Examples of activities that fall under monitoring include:

• Tracking user behavior through cookies, device fingerprinting, or similar tools.
• Profiling individuals for personalized ads or recommendations.
• Analyzing EU website visitors’ interactions using analytics tools.
• Tracking location data through mobile apps.
• Recording browsing habits for risk assessment, fraud detection, or similar purposes.

If you engage in any of these activities with EU-based individuals, you need to comply with the EU GDPR - even if you operate outside the EU.

Practical Steps to Ensure EU GDPR Compliance

If the EU GDPR applies to your business, taking proactive steps is the best way to avoid penalties and disruptions. Key actions include:

• Appoint an EU representative if required under Article 27 to serve as a contact point for regulators and EU individuals.
• Update privacy policies to clearly explain what data you collect, why, and how individuals can exercise their rights.
• Strengthen data security by implementing encryption, access controls, and other protective measures.
• Maintain proper records of how you handle EU data, ensuring you can demonstrate compliance if asked.
• Prepare for data subject requests, such as access, correction, and deletion requests, by having clear internal processes.

Taking these steps helps businesses reduce risks and ensures they can continue engaging with EU customers without unnecessary obstacles.

Take Proactive Steps Towards EU GDPR Compliance Today

Navigating EU GDPR compliance can be challenging, especially for businesses outside the EU that may not realize they need to comply. The regulation’s broad scope, strict requirements, and severe penalties make it crucial for international companies to assess their obligations and act.

For non-EU businesses, appointing an EU representative under Article 27 is often one of the first compliance steps. This is where Prighter can help. We provide EU GDPR Representative services for hundreds of global organizations and can help your business to understand and meet its obligations, removing the complexity along the way.

Don’t leave compliance to chance — schedule a demo today and find out how Prighter can make EU GDPR compliance seamless and stress-free.