5 Steps to Align Data Privacy Across Jurisdictions

Data privacy regulations are growing more complex, and businesses must adapt to stay compliant - especially during cross-border M&A deals. With over 120 global privacy laws and hefty penalties for violations, aligning privacy practices across jurisdictions is critical for avoiding risks, protecting deal valuations, and ensuring smooth operations.

Here’s a quick breakdown of the five essential steps to align data privacy:

1. Map Your Data Flows: Track how data moves within your organization and across borders. Identify sensitive data, systems, and third-party vendors.
2. Research Applicable Privacy Laws: Understand the specific regulations in each jurisdiction, such as GDPR, CCPA, or China's PIPL.
3. Standardize Compliance Mechanisms: Develop unified policies, adopt frameworks like ISO 27701, and implement strong technical safeguards like encryption and access controls.
4. Set Up Cross-Border Data Transfer Solutions: Use approved mechanisms like SCCs, adequacy decisions, or BCRs to manage international data transfers legally.
5. Monitor and Update Compliance Programs: Regularly audit your practices, track regulatory changes, and update policies to stay compliant.

Key takeaway: A structured approach to data privacy not only ensures compliance but also minimizes risks during M&A transactions. By prioritizing privacy alignment, businesses can safeguard their operations and build trust with stakeholders.

Step 1: Map Your Data Flows

Start by mapping out your data flows to determine which jurisdiction laws apply. Document every activity involving data collection, processing, and transfer. This foundational step ensures you’re prepared to address compliance requirements and standardize cross-border data practices later on.

Having a clear picture of how data moves through your organization is critical. Without it, gaps in due diligence can emerge, potentially jeopardizing M&A transactions or leading to regulatory penalties. Many companies only uncover these issues when it’s too late.

Find Key Data Assets and Sources

Begin by identifying all sensitive data in your organization. This includes:

• Personal data: Names, email addresses, phone numbers
• Financial information: Payment details, banking records
• Health data: Medical records, wellness program information

Create a detailed inventory of critical assets and pinpoint the systems where this data resides. Focus on key platforms like servers, databases, and third-party vendors. Pay particular attention to systems that handle cross-border data transfers - such as your CRM, HR tools, payment processors, and cloud storage - since these often face stricter regulations.

Map your business processes to your technical infrastructure to track where data is stored and how it moves. For instance, a European customer’s data might flow from your website to your CRM, billing system, and analytics platform, potentially crossing several jurisdictions along the way.

Classify data streams based on sensitivity and regulatory requirements. For example, customer payment details need stronger protections than marketing analytics. Document security measures for each type of data, including encryption standards, backup protocols, and audit procedures.

Role-based access controls are also essential, especially for international operations. Limit access to sensitive employee data to authorized personnel only, and where possible, keep certain data localized within the country of origin to comply with strict data localization laws.

Build Data Flow Diagrams

Visualizing your data flows through diagrams is an effective way to identify compliance gaps and streamline regulatory planning. These diagrams can be invaluable during M&A due diligence and regulatory audits.

"A data flow diagram offers a visual representation that maps the flow of information within a system, emphasizing processes, data stores, and external entities." - Palo Alto Networks

Break down each processing activity step-by-step to ensure the entire data journey is transparent. Identify all data controllers and processors, including internal teams, systems, and third-party entities involved in handling your data.

Track data movement from start to finish, noting every transfer between internal departments and external partners. For international operations, focus on cross-border data flows, documenting details like data types, recipients, and the purpose of each transfer.

Use consistent symbols and labels in your diagrams to make them easy to interpret. Place your system at the center, with external entities displayed around it. Every arrow and box should have a clear label explaining its role in the data flow.

Organize the diagrams into two levels: high-level overviews for general understanding and detailed process flows for specific functions. This layered approach ensures all stakeholders can access the information most relevant to their roles. These diagrams will also help identify areas that need extra regulatory controls.

Document all cross-border data transfers thoroughly, including the type of data, recipients, and business purposes. Define clear retention periods for international data, ensuring it’s deleted once its purpose is fulfilled. This level of documentation is crucial for demonstrating compliance to regulators and for M&A due diligence.

Finally, align your data maps with compliance obligations like GDPR and CCPA. For GDPR, confirm you have a lawful basis for processing. For CCPA, ensure you can handle consumer rights requests. Proper alignment between your data flows and legal requirements sets the stage for the next steps in your compliance plan.

Step 2: Research Applicable Privacy Laws

Once you've mapped your data flows, the next step is to dive into the privacy laws that apply to your operations. This research is critical for understanding your compliance obligations and spotting any potential conflicts between jurisdictional regulations that might affect your M&A transaction.

Privacy laws now exist in over 120 jurisdictions, reflecting growing global concerns around data collection and usage. Navigating these diverse legal landscapes is key to ensuring smooth cross-border operations and successful M&A activities.

Learn Jurisdictional Regulations

Start by identifying the privacy laws most relevant to your business. Regulations differ widely depending on the region, with some jurisdictions adopting broad frameworks while others focus on specific sectors.

For example, the European Union's GDPR is one of the most extensive data protection laws in the world. It governs how data from EU residents is collected, used, transmitted, and secured. The GDPR applies to any organization handling EU residents' data, regardless of the company’s location, and places a strong emphasis on user rights and explicit data processing rules.

In China, the Personal Information Protection Law (PIPL) prioritizes data localization and requires clear consent for data processing. Meanwhile, India's Digital Personal Data Protection Act allows the government to regulate data transfers to specific countries.

The United States, on the other hand, lacks a unified federal framework. Privacy regulations vary significantly by state, creating a patchwork of compliance requirements. For instance, Nebraska's law applies to all businesses operating within the state, regardless of data volume or revenue, while Tennessee’s law is narrower, targeting companies with over $25 million in revenue. Some states include unique provisions: Iowa’s law doesn’t allow consumers to correct inaccuracies or opt out of profiling, while Minnesota’s law ensures consumers can access the data used in profiling decisions and understand the reasoning behind them.

Changes to children’s privacy laws, such as updates to COPPA set for January 2025, further highlight the rapidly shifting regulatory landscape.

This understanding of jurisdictional laws sets the stage for a deeper comparative analysis, which we'll explore in the next section.

Create Comparison Tables for Analysis

To make sense of the varying regulations, organize your findings into comparison tables. These tables can help you quickly analyze different privacy laws and identify overlapping or conflicting requirements. Focus on key factors like jurisdictional scope, data types covered, consent rules, individual rights, transfer restrictions, and enforcement mechanisms.

For example, while GDPR provides multiple legal bases for processing data, PIPL leans heavily on obtaining consent. Similarly, GDPR enforces strict cross-border data transfer rules, whereas the CCPA doesn’t regulate international transfers of personal information.

When in doubt, apply the strictest requirements across all jurisdictions. Although this might result in more rigorous controls than some regions demand, it ensures compliance everywhere your business operates.

There are also various tools available to help compare global privacy laws, making this process more manageable.

Finally, conduct a detailed legal risk assessment to evaluate cross-border data transfers and identify any conflicting regulations. This is especially important in complex M&A transactions involving data from multiple entities. Document your findings in an accessible format for both legal and technical teams, covering areas like data handling rules, retention periods, individual rights, and breach notification timelines.

For businesses involved in M&A, spotting these regulatory differences early can help you avoid deal-breaking issues and integration challenges. Companies like Phoenix Strategy Group offer M&A support services to help navigate these complexities, ensuring data privacy compliance becomes a strategic asset rather than a roadblock during transactions.

Step 3: Standardize Compliance Mechanisms

Once you’ve familiarized yourself with various privacy laws, the next step is to streamline your compliance efforts by standardizing processes. Instead of juggling separate protocols for different regions, a unified compliance system simplifies operations and ensures adherence to the strictest regulations across jurisdictions.

The goal here is to create frameworks that can flexibly align with multiple regulatory environments without slowing down your operations. This becomes especially important during mergers and acquisitions (M&A), where integrating data from different entities needs to happen quickly and efficiently.

Use Standardized Policies

International frameworks are the backbone of consistent privacy policies across regions. By relying on these standards, you can build systems that meet multiple regulatory requirements at once.

One standout option is ISO 27701, a privacy information management standard that extends ISO 27001. It helps organizations comply with GDPR and other privacy laws by addressing both security and privacy risks in one system. However, ISO 27701 isn’t a standalone certification - it’s an add-on to ISO 27001, offering a unified approach to data protection.

For U.S. organizations handling personal data transfers from the EU, UK, or Switzerland, the Data Privacy Framework (DPF) is a solid choice. It provides clear guidelines for managing cross-border data transfers while staying compliant with European privacy standards.

If your operations span a broader international scope, consider the OECD Guidelines on the Protection of Privacy and Transborder Flows of Personal Data. These guidelines are often referenced in privacy laws worldwide. Similarly, the APEC Privacy Framework supports data privacy while enabling cross-border trade in the Asia-Pacific region.

When crafting standardized policies, focus on covering the entire data lifecycle - collection, use, storage, and disposal - across all jurisdictions. Document these policies in formats that are easy for both legal and technical teams to understand. This ensures everyone involved knows their role in maintaining compliance.

Once your policies are in place, back them up with strong technical safeguards to secure data consistently across all environments.

Add Technical Safeguards

Technical safeguards are critical for protecting data and demonstrating compliance. These measures establish uniform security standards no matter where your data is stored or processed.

Start with data encryption, both in transit and at rest. Use up-to-date algorithms and regularly update encryption keys to meet the technical requirements of most privacy laws. Encryption not only protects sensitive information but also serves as tangible proof of your commitment to security.

Next, implement access controls to ensure only authorized personnel can access sensitive data. Support these controls with detailed logging and monitoring systems to prevent unauthorized access and maintain audit trails across all locations.

Adopt data minimization practices to limit the collection and storage of unnecessary personal information. This reduces your compliance workload by ensuring you only process data essential to your operations. Automated tools can identify and safely delete non-essential data, aligning with the strictest retention rules across jurisdictions.

In 2022, the U.S. experienced over 1,800 data breaches, exposing billions of records. With human error accounting for 74% of these incidents and only 56% of companies having solid response plans, technical safeguards alone aren’t enough. Combine them with employee training to reduce risks further.

In some cases, data localization may be required by specific jurisdictions. While this might seem at odds with standardization, modern technical solutions can route and store data locally while maintaining consistent security protocols.

Finally, keep your systems up-to-date. Regular software updates and proactive cybersecurity measures protect against evolving threats and ensure compliance with changing technical standards.

For M&A scenarios, standardized technical safeguards make all the difference. They provide clear evidence of compliance readiness and streamline the integration of data systems from different entities. Companies like Phoenix Strategy Group specialize in navigating these complexities, turning compliance into a strategic advantage during M&A processes.

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Step 4: Set Up Cross-Border Data Transfer Solutions

Handling cross-border data transfers requires careful planning to stay legally compliant while safeguarding personal information. These transfers are not just about smooth business operations - they also come with significant regulatory risks. For instance, in 2023, the Irish Data Protection Commission fined Meta Platforms Ireland Limited €1.2 billion for GDPR violations tied to data transfers to the U.S. This record-breaking fine highlights how seriously regulators view breaches in cross-border data rules.

Review Transfer Mechanisms

There are several approved methods for legally transferring data across borders, each with its own benefits and requirements. The choice depends on factors like your business model, the volume of data, and the countries involved.

• Adequacy Decisions: These are the simplest option. When the European Commission rules that a non-EU country offers adequate data protection, transfers can happen without extra safeguards. A prime example is the EU‑US Data Privacy Framework, which supports millions of jobs and is cost-effective for EU‑US transfers.
• Standard Contractual Clauses (SCCs): These are pre-approved contract templates for data transfers between different entities. While flexible, SCCs often require Transfer Impact Assessments (TIAs) to evaluate the legal environment of the destination country. Additional measures, like stronger encryption or stricter access controls, may also be needed to meet data protection standards.
• Binding Corporate Rules (BCRs): Ideal for multinational companies transferring data within their group, BCRs offer comprehensive coverage. However, setting them up involves a complex process, including formal regulatory approval and extensive documentation.

For occasional transfers, explicit consent may work, but it’s not practical for routine operations.

When choosing a transfer mechanism, think about your long-term needs. This decision will shape how you document and manage your data transfer processes moving forward.

Document Transfer Processes

Once you’ve selected a transfer mechanism, the next step is thorough documentation. Just as with mapping data flows or standardizing compliance practices, clear documentation is key to maintaining strong cross-border data transfer practices. In fact, detailed records can even become a strategic asset, particularly during mergers and acquisitions (M&A).

Start with data mapping. Identify what data is being transferred, where it’s going, when it’s happening, and the roles of everyone involved. This forms the foundation for all compliance activities.

For each transfer, keep precise records of consent. Document who provided it, when and how it was obtained, and what details were shared with the individual. These records are crucial during regulatory audits or when individuals exercise their privacy rights.

Transfer Impact Assessments should also be documented. Record your evaluation of the destination country’s legal environment, your findings, and any additional measures you’ve implemented. Regularly review these assessments to ensure they stay up-to-date with changing laws and regulations.

Data transfer agreements need to clearly outline data protection responsibilities, security expectations, and dispute resolution processes. Maintaining detailed audit trails - such as timestamps, data volumes, and security measures - can demonstrate your proactive compliance efforts and help you spot potential issues early.

Finally, establish procedures for routine reviews of data transfers, security updates, and regulatory changes. In M&A situations, well-organized documentation can simplify due diligence and integration planning. Firms like Phoenix Strategy Group can help businesses navigate these complexities, ensuring that their cross-border data practices align with both compliance requirements and business goals.

Good documentation isn’t just about meeting legal obligations - it’s about creating scalable systems that ensure consistent data protection across every jurisdiction where you operate.

Step 5: Monitor and Update Compliance Programs

Creating a solid data privacy framework is just the beginning - keeping it effective requires constant monitoring and updates. With regulations and business practices changing regularly, staying compliant demands vigilance. Consider this: by 2025, organizations in the U.S. will need to navigate 19 different privacy laws, and noncompliance fines are projected to hit $1 billion in 2024. Clearly, maintaining oversight is not just important - it’s essential.

Organizations with strong data protection policies are 75% more likely to stay compliant with data protection laws. This highlights the importance of embedding continuous monitoring into your compliance strategy from the very start. Regular audits and updates, paired with well-documented data transfer practices, are key to ensuring your compliance program stays on track.

Run Regular Audits

Think of regular audits as routine checkups for your compliance health. They help catch potential issues early and ensure your organization is prepared for any regulatory scrutiny. Studies show that using automated compliance tools can improve audit efficiency by 72%, making them a smart investment.

At a minimum, internal audits should be conducted quarterly, with monthly reviews for high-risk data activities. Pay special attention to areas where regulations are frequently updated, such as cross-border data transfers or relationships with third-party vendors. Companies that consistently map their data are 60% more effective at identifying and addressing privacy risks.

Start each audit by defining its scope and objectives. Are you reviewing all data processing activities or focusing on specific regions? Assemble a team that combines technical and legal expertise to systematically review policies, assess compliance, and evaluate third-party relationships.

External audits, conducted annually or before major business changes like mergers and acquisitions, bring a fresh perspective. External auditors can uncover blind spots that internal teams might miss.

Documenting your audit findings is just as important as conducting the audit itself. Keep a clear record of issues identified, actions taken, and improvements made. This not only demonstrates your commitment to compliance but also helps track your progress over time. And here’s a critical point to consider: 94% of businesses believe that customers won’t trust them if their data isn’t properly protected. Regular audits help reinforce that trust, which is essential for customer loyalty and business growth.

Once you’ve addressed audit findings, shift your focus to keeping up with new regulatory requirements.

Update for Regulatory Changes

Privacy laws are in constant flux, and keeping up with them requires a proactive approach. Surprisingly, only 70% of privacy professionals feel confident in their ability to track new regulations, which shows just how challenging this task can be.

Instead of reacting to changes as they happen, set up a systematic process for tracking updates. Rely on trusted sources like compliance software, legal advisories, and official regulator websites. Dedicate time each day to staying informed about developments in the regions where your business operates.

Technology can take much of the burden off your shoulders. Regulatory compliance software can monitor changes in real time and send alerts when updates occur. These tools often include features like data discovery, centralized policy management, detailed reporting, and integration with regulatory updates.

When regulations evolve, your privacy policies should evolve with them. Masha Komnenic, Director of Global Privacy at Termly, emphasizes:

"Privacy policies are living documents that you should review and update every few months...But it's particularly important to make changes whenever you modify the types of data you collect from users or adapt how you use that information."

"For proper legal compliance, you must ensure that your privacy policy is always accurate and reflects your current data collection and processing activities."

When implementing major regulatory updates, take a phased approach. Start with high-risk areas and address simpler changes first. Have a clear plan for responding to data breaches or privacy incidents, and maintain a log of past policy versions to show how your compliance program has evolved.

Regularly reviewing your privacy practices is just as important as updating them. Foster a culture of privacy awareness within your organization by conducting regular training sessions and implementing clear, actionable policies. Companies that follow privacy by design principles are 85% better equipped to meet new privacy regulations.

For businesses navigating complex transitions like mergers and acquisitions, consulting experts like Phoenix Strategy Group can be invaluable. Their experience in data engineering and compliance during M&A processes ensures that regulatory changes don’t disrupt your operations or create compliance risks.

Conclusion

Managing data privacy in cross-border M&A requires a well-structured approach to ensure compliance with global regulations. With EY-Parthenon predicting a 12% increase in M&A activity by 2024, the stakes are higher than ever. Organizations must make privacy alignment a priority to safeguard deal value and operational stability.

A thoughtful five-step framework can help navigate these challenges. By mapping data flows, researching relevant laws, standardizing compliance processes, creating solutions for cross-border data transfers, and maintaining ongoing monitoring programs, companies can significantly reduce regulatory risks. The fallout from Marriott's acquisition of Starwood, which revealed costly legacy breaches, serves as a stark reminder of the consequences of neglecting privacy considerations.

In this complex landscape, RegTech solutions have become indispensable for managing compliance across multiple jurisdictions. As Venky Yerrapotu, CEO and Co-Founder of 4CRisk.ai, points out:

"RegTech has become table-stakes for organizations that need to harmonize compliance across privacy rules such as the EU's GDPR, California's CCPA, and Canada's PIPEDA where incidents are exacerbated with the growing use of AI."

The challenge lies in translating regulatory requirements into actionable business practices. Areg Nzsdejan, CEO and Co-Founder of Cardamon, emphasizes:

"Simplifications come from extracting obligations and comparing them. This in essence is translating the rules into the language of the company that it applies to."

These tools and strategies, combined with expert advisory services, can be game-changers for organizations tackling the intricacies of cross-border M&A. Phoenix Strategy Group, with its expertise in data engineering and M&A advisory, supports businesses in navigating these complexities while ensuring compliance doesn't disrupt deal timelines or introduce unforeseen liabilities.

Beyond regulatory adherence, aligning data privacy enhances digital trust with consumers, minimizes operational risks, and sets the stage for smoother future transactions in an increasingly regulated global market. Investing in these measures is not just about compliance - it’s about securing long-term value and resilience in a competitive landscape.

FAQs

How can businesses navigate compliance with global privacy laws during cross-border M&A transactions?

Managing compliance with more than 120 global privacy laws during cross-border M&A is no small feat - it demands careful planning and a strategic approach. Start by conducting thorough data privacy due diligence. This involves auditing the target company's data processing activities and taking a close look at their compliance history. By identifying potential risks early, you can avoid surprises down the road.

From there, make sure to update privacy policies to account for international data transfers. It's also crucial to ensure all processing agreements are properly documented. Putting strong privacy measures in place not only helps minimize legal and financial risks but also builds trust with stakeholders - something that's critical for a smooth and successful M&A process.

What should I consider when selecting a cross-border data transfer method to ensure compliance with privacy regulations?

When choosing a method for cross-border data transfers, it’s crucial to verify if the recipient country ensures an adequate level of data protection as required by regulations like the GDPR. If the country doesn’t meet these standards, you’ll need to adopt safeguards such as Standard Contractual Clauses (SCCs) or Binding Corporate Rules (BCRs). In certain cases, you may also rely on exceptions, like securing explicit consent from the individuals involved.

These decisions are essential for staying compliant with regulations, reducing the risk of penalties, and maintaining smooth operations. For example, the EU no longer recognizes the Privacy Shield framework for transfers to the U.S., making alternative safeguards a necessity. Picking the right approach helps you align with global privacy laws, avoid disruptions, and build trust with stakeholders.

How often should businesses update their compliance programs to keep up with changing privacy regulations, and what tools can help streamline this process?

To keep up with changing privacy regulations, businesses should review and update their compliance programs at least once a year. Additionally, any major shifts in data practices or the introduction of new laws should trigger an immediate review. Regular updates not only help you manage risks but also reinforce trust with your stakeholders.

For a more streamlined approach, leverage tools that automate compliance management and track regulatory updates. Platforms like data privacy management software and compliance monitoring tools can help you stay organized and ensure your privacy practices are current.

Related posts

• Data Privacy Due Diligence for Cross-Border M&A
• M&A Risks: Data Breach Compliance in Cross-Border Deals
• Privacy Impact Assessments in M&A: Key Steps
• GDPR Risks in Cross-Border M&A Deals