The Role of Data Privacy in Cross-Border E-Commerce: Navigating Global Regulations

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For e-commerce businesses with a global customer base, data privacy regulations play a crucial role in your day-to-day operations.

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You may or may not be familiar with the big law that started it all — the General Data Protection Regulation (GDPR), which became enforceable in 2018.

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The GDPR ‘s broad scope immediately impacted businesses worldwide, outlining strict requirements for cross-border data transportation outside the European Union.

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It also inspired similar legislation around the globe. Today, over 130 countries have national privacy laws, and over a dozen U.S. states have enacted comprehensive privacy laws, with new legislation pending in others .

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Below, Masha from Termly, summarises some of these laws and how they impact e-commerce businesses, specifically focusing on parts affecting the international transfer of data, which can include details like full names, addresses, emails, birthdates, and payment details.

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Masha also provide actionable tips and solutions for simplifying compliance with these privacy laws, pointing to essential data privacy solutions like Termly, which were built explicitly by data privacy experts to help e-commerce platforms thrive in this modern digital era.

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1. Data privacy laws impacting cross-border e-commerce

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Arguably, processing data is the lifeblood of ecommerce platforms.

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Every day, you’re processing digital orders, sending newsletters, performing targeted advertising, and tracking user analytics.

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But if your consumers are located in a different country than your business and data privacy laws protect them, you need to comply with those laws, or you could face fines, legal penalties, and damage to your brand’s overall reputation.

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Let’s discuss some of the most notable laws and how they impact e-commerce platforms.

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1.1 The European GDPR and others like it

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The EU GDPR is one of the world's strictest privacy laws, and several other regions have laws based on it.

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It outlines strict requirements for the cross-border transfer of personal information in Chapter 5, Articles 44 - 50, and several of those other laws adopted similar guidelines.

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The European Commission can make ‘adequacy decisions’ to deem third countries or international organizations as ensuring adequate protection over the data, legally permitting the flow of information to those regions.

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For example, the adequacy decision allowing the transfer of data from the EU to the US is the EU/US Data Privacy Framework.

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Otherwise, according to Article 46,

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“In the absence of a decision pursuant to Article 45(3), a controller or processor may transfer personal data to a third country or an international organisation only if the controller or processor has provided appropriate safeguards, and on condition that enforceable data subject rights and effective legal remedies for data subjects are available.”

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In other words, if no adequacy decision exists, data can only be transferred internationally if the controller or processor can prove they’ve:

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Implemented appropriate security measures and safeguards to protect the data in line with the GDPR requirements, and
On the condition that the data subjects can still fully follow through on all of their privacy rights outlined by the Regulation.

This can be achieved by creating standard contractual clauses (SCCs) with international organizations receiving the data, requiring them to honor these GDPR guidelines.

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Below is a list of other laws from around the world that adopted similar data transfer guidelines as the EU GDPR:

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E-commerce businesses subject to these laws must follow all international data transfer requirements.

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Otherwise, you risk getting fined for noncompliance and the cessation of all data processing.

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1.2 North American privacy laws

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Several privacy laws in North America impact how e-commerce businesses process personal data from consumers.

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While some of these laws don’t explicitly address cross-border transfers of data in the same way as the GDPR, they could still apply to your business, making you subject to meeting all legal obligations.

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For example, in the U.S., state-level laws like the California Consumer Privacy Act (CCPA) protect consumers in specific states. These laws can impact your business no matter where you’re located, including outside the U.S.

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The same goes for federal laws like the Children’s Online Privacy Protection Act (COPPA), which apply to any business globally targeting children in the U.S.

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In Canada, laws like the Personal Information Protection and Electronic Documents Act (PIPEDA) and Quebec’s Law 25 dictate how data is collected, processed, and transferred to third countries.

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2. How to navigate compliance with global privacy regulations

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Now for the fun part — there are some simple best practices your e-commerce business can implement to simplify navigating these various privacy law compliance rules.

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While it can seem overwhelming, these steps will help untangle any lingering compliance confusion.

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2.1 Know all laws that apply to your business

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First things first, it’s vital that you know all privacy laws that your business is subject to following.

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While these laws can be similar, there’s a lot of nuance and differences from one piece of legislation to the next, and you don’t want to risk getting penalized.

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The legal threshold for these laws also varies significantly, but it helps to answer the following questions about your business:

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How much data do you collect?
Where are your consumers located?
Where is your business located?
Do you meet monetary thresholds, where applicable?

Once you know this information, you can look into the specific thresholds of different laws to verify whether your business is subject to following them.

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2.2 You need to publish a privacy policy

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That’s right, the privacy policy linked to the bottom of every webpage is an essential legal document, and all websites should have one.

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Every privacy law I’ve mentioned so far requires companies to have a privacy policy to communicate what data is collected from consumers and how it’s used, including the GDPR.

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While the specific details that belong in your privacy policy depend on the laws that apply to your business, most privacy policies should explain the following:

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What data you collect
Why you collect the data
If you share or sell the data to third parties
The categories of those third parties
The rights users have over their data
How they can act on those rights
If you transfer data internationally
Your company contact information

You can write this document yourself, but experts typically recommend using a legally backed Privacy Policy Generator because it helps take the guesswork out of compliance.

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Generators guide you through important questions about your business’s data processing activities so you know you’re including the correct information outlined by different privacy laws.

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2.3 Take advantage of Consent Management Solutions

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Privacy laws also commonly impact how your business collects and manages user consent for different data processing activities.

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Some of these laws require opt-out rights, like the CCPA, which gives users the right to opt out of targeted advertising and the selling or sharing of their information.

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Other laws, like the GDPR, require opt-in consent, and you need to obtain an active agreement from consumers before collecting any of their data.

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This is why you see consent banners with links to cookie and privacy policies on so many websites.

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The easiest way to manage consumer consent and make a legally compliant cookie banner is to use a Consent Management Platform.

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Look for one that is configurable to meet the requirements of the laws that apply to your e-commerce business.

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2.4 Use SCCs when necessary

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If you’re subject to the GDPR but are based in a region where the European Commission has not made an adequacy decision, ensure you’re always using EU standard contractual clauses with any data processors (or controllers) you work with.

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Here are the steps you might plan to take:

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Determine the applicability of the SCC,
Incorporate the SCC into an existing agreement or create a standalone document,
Transparently and clearly outline all obligations of all parties involved in the agreement, and
Address various data transfer scenarios, like controller to processor (C2P), processor to processor (P2P), etc.

For help, you can follow the specific EDPB guidelines, consult a privacy lawyer, or use the set of SCCs available on the European Commission’s website.

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2.5 Keep an eye on evolving privacy frameworks

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Finally, it’s important that you keep up with news about existing adequacy decisions or frameworks that apply to your e-commerce business or consumers, just in case anything changes.

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The privacy legal landscape constantly evolves to keep up with new technologies, industry shifts, and ongoing consumer needs.

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Staying informed gives you time to adapt your data processing protocols to remain in compliance with any new or evolving laws.

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3. Where to go from here

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It turns out data privacy plays a significant role in cross-border e-commerce — and now you know why.

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Data privacy laws directly impact if, when, and how businesses can legally move data from one country to another.

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If those laws apply to you, you must meet other obligations and requirements to avoid getting fined for noncompliance.

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Fortunately, you don’t have to do it alone.

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Resources built by privacy professionals help e-commerce businesses more easily and affordably achieve compliance, like Privacy Policy Generators, CMPs, and other data privacy management solutions.

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