Data privacy regulations have created new categories of M&A risk. Non-compliance can result in significant fines and operational restrictions.
Key Regulations
GDPR (EU)
- Applies to EU residents' data regardless of company location
- Fines up to 4% of global revenue
- Right to erasure, portability, access
- 72-hour breach notification
CCPA/CPRA (California)
- Right to know, delete, opt-out
- Applies to businesses meeting thresholds
- Private right of action for breaches
Emerging Regulations
- State-level US laws (Virginia, Colorado, etc.)
- Sector-specific requirements
- International data transfer restrictions
Assessment Framework
1. Data Inventory
- What personal data is collected?
- Where is it stored?
- Who has access?
- How long is it retained?
2. Legal Basis Review
- Consent mechanisms
- Legitimate interest assessments
- Contract requirements
- Legal obligations
3. Rights Fulfillment
- Subject access request process
- Deletion capabilities
- Data portability
- Opt-out mechanisms
4. Security Controls
- Encryption practices
- Access controls
- Breach detection
- Incident response
Key Takeaway: Privacy compliance isn't just legal risk—it affects product capabilities and go-to-market strategy. Understand the implications for the business model.