This and many other similar questions are often raised in practice. The territorial scope of application of the GDPR can be a mind-boggling exercise. The territorial applicability of the GDPR is however the first step that needs to be conducted in the GDPR analysis. Aware of the need for guidance on this topic, the European Data Protection Board (“EDPB”, the former “Article 29 Working Party”) has published its “Guidelines 3/2018 on the territorial scope of the GDPR (Article 3)” on 16 November 2018, welcoming comments until 18 January 2019. With these Guidelines, the EDPB focusses on a harmonious interpretation and uniform application of article 3 GDPR by companies active on the EU market, in order to ensure a comprehensive protection of EU data subjects’ rights.
By referring to existing case law of the CJEU and other European legislation, the EDPB extensively interprets the two criteria of article 3 GDPR: i) the establishment criterion, as set out in article 3 (1) GDPR; and ii) the targeting criterion, as set out in article 3 (2) GDPR. In short, the establishment criterion determines whether an entity is sufficiently rooted within the EU, regardless of whether the processing takes place in the EU or not. Any real and effective activity, even a minimal one, in the context of the entity’s activities can be enough to satisfy the establishment criterion. The targeting criterion, on the other hand, sets out whether the GDPR applies when personal data of data subjects in the EU are processed while offering goods or services to the data subjects, or when their behavior in the EU is monitored.
When either the establishment criterion or the targeting criterion is met, the provisions of the GDPR will apply to the relevant entity. Also the processing in a place where Member State Law applies by virtue of public international law (article 3 (3) GDPR) has been touched upon shortly.
Aware of the complexity of the issue given the worldwide data flows and international (e-)businesses, the EDPB stresses the importance of an analysis based on the specific situation. The EDPB develops a multifold approach in determining whether or not one of the two above criteria is applicable and provides many practical examples. In addition, the EDPB has also set out different paths for data controllers and data processors, whether or not in the EU, as the processing by each entity must be considered separately. Lastly, the EDPB also provides clarification on the process for the designation of a representative within the EU for non-EU companies, as set out in article 27 GDPR.
The link to the Guidelines can be found here