Major differences between U.S. privacy laws and those in the EU

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One of the most fundamental differences lies in the comprehensiveness and philosophical underpinnings of their approaches. The EU, through its General Data Protection Regulation (GDPR), adopts a comprehensive, omnibus approach that views data protection as a fundamental human right. The GDPR establishes a single, harmonized set of rules that apply to the processing of personal data of individuals within the EU, regardless of where the data controller or processor is located. This "privacy-first" mindset is enshrined in the EU Charter of Fundamental Rights. In contrast, the U.S. follows a sectoral approach to privacy, with specific laws addressing particular types of information (e.g., health information under HIPAA, children's online data under COPPA, financial data under GLBA) or specific industries. There is no single, overarching federal law equivalent to the GDPR that governs the collection and use of personal data across all sectors. This fragmented landscape often leaves gaps in protection and can lead to inconsistencies in how personal information is handled. While some U.S. states, notably California with the California Consumer Privacy Act (CCPA) and its amendment CPRA, have enacted more comprehensive privacy laws, the overall U.S. approach remains less unified than that of the EU.

A second significant difference lies in the legal basis for processing personal data and the concept of consent. The GDPR operates on a principle of "no processing without a lawful basis." It outlines several lawful bases for processing personal data, with "consent" being a prominent but strictly defined one. Consent under the GDPR must be freely given, specific, informed, and unambiguous, requiring a clear affirmative action from the data subject (e.g., ticking a box). Furthermore, individuals have the right to withdraw their consent at any time. The U.S. approach, particularly in the absence of a comprehensive federal law, often relies on an "opt-out" model. Businesses are generally free to collect and use personal data unless and until an individual explicitly objects. While some U.S. laws like COPPA require verifiable parental consent for collecting data from children, the general principle leans towards allowing data collection with the provision for consumers to opt out of certain uses, such as the sale of their personal information under the CCPA. This fundamental difference in the default setting – "opt-in" in the EU versus "opt-out" in many areas of the U.S. – reflects the differing philosophies regarding individual control over personal data.

The third major distinction lies in the scope of "personal data" and the treatment of sensitive information. The GDPR defines "personal data" broadly as any information relating to an identified or identifiable natural person. This includes not only ¹ obvious identifiers like name ² and address but also IP addresses, location data, cookie identifiers, and biometric data. The definition is intentionally expansive to encompass the evolving digital landscape. While U.S. laws also protect certain categories of information, the definition of "personally identifiable information" (PII) can vary across different sectoral laws. Moreover, the GDPR has a specific category of "special categories of personal data" (often referred to as sensitive data), which includes information revealing racial or ethnic origin, political opinions, religious or philosophical beliefs, trade union membership, ³ genetic data, biometric data for the purpose of uniquely identifying a natural person, data concerning health, or data concerning a natural person's sex life or ⁴ sexual orientation. The processing of this sensitive data is generally prohibited unless specific exceptions apply, such as explicit consent. While U.S. laws like HIPAA provide strong protections for health information, the broader categories of sensitive data outlined in the GDPR do not always receive the same level of comprehensive protection under federal law in the U.S.  

Several U.S. companies have faced legal action in the EU for alleged violations of its privacy laws, particularly the GDPR. Here are three examples:

1. Meta Platforms Ireland Ltd. (formerly Facebook): One significant violation involved international data transfers. In May 2023, the Irish Data Protection Commission (DPC), acting on behalf of the EU, issued a record-breaking €1.2 billion fine to Meta for violating GDPR's international transfer guidelines (Article 46(1)). The DPC found that Meta had failed to provide an adequate level of protection for personal data transferred from the EU to the United States, particularly in light of the European Court of Justice's "Schrems II" decision, which invalidated the EU-US Privacy Shield framework. Meta was ordered to suspend future data transfers to the U.S. and bring its data processing operations into compliance.

2. Amazon Europe Core S.à r.l.: In July 2021, Luxembourg's National Commission for Data Protection (CNPD) fined Amazon €746 million for non-compliance with general data processing principles, specifically concerning the lawfulness of processing for targeted advertising. The complaint, initiated by the French privacy rights group La Quadrature du Net, alleged that Amazon's system for targeted advertising processed personal data without obtaining proper consent and without providing sufficient information to users about how their data was being used for commercial purposes. The CNPD ruled that Amazon needed to revise its business practices to ensure compliance with GDPR's requirements for fair and transparent data processing.

3. TikTok Technology Limited: In September 2023, the Irish DPC fined TikTok €345 million for several violations related to its handling of children's personal data. The investigation found that TikTok had set children's accounts to public by default, failed to provide information to child users in clear and plain language, and did not adequately assess the risks to children's data. These practices were deemed to be in breach of GDPR principles related to fair and transparent processing, data protection by design and default, and the protection of vulnerable data subjects. TikTok was also ordered to bring its processing operations into compliance within a specified timeframe.

Sample Answer

      The digital age has ushered in unprecedented opportunities for data collection and processing, making the protection of personal information a paramount concern globally. While both the United States and the European Union recognize the importance of privacy, their legal frameworks for safeguarding personal data diverge significantly in their foundational principles, scope, enforcement mechanisms, and the rights afforded to individuals. Understanding these differences is crucial for businesses operating in both jurisdictions and for individuals seeking to comprehend their privacy rights in a globalized world. This paper will identify three key distinctions between U.S. and EU privacy laws, and subsequently list three U.S. companies that have faced legal action in the EU for non-compliance, along with the specific violation for each.