As regulatory frameworks around personal data become more complex and globally enforced, compliance with data privacy laws has become a top priority in M&A due diligence. Whether you’re acquiring a SaaS company, a healthcare platform, or a direct-to-consumer brand, the way a business handles PII (Personally Identifiable Information) can significantly impact risk exposure, valuation, and deal structure.

This blog post explores three key data privacy regimes—GDPR, CCPA, and DPIAs—that often come into play during diligence and post-close integration.

🌍 GDPR – General Data Protection Regulation (European Union)

What is it?

The General Data Protection Regulation (GDPR) is the EU’s landmark data privacy law, designed to give individuals more control over their personal data and to unify privacy regulations across Europe. It is widely considered the most rigorous and far-reaching privacy framework in the world.

Who is subject to it?

GDPR applies to:

• Any business operating within the EU, and
• Any business outside the EU that:
  • Offers goods or services to EU residents, or
  • Monitors the behavior of individuals within the EU (e.g., through cookies, analytics, or profiling)

This includes U.S.-based ecommerce platforms, SaaS providers, and marketing firms with European users.

Key requirements:

• Consent-based data collection and processing
• The “Right to be Forgotten” (data deletion on request)
• Breach notification within 72 hours
• Appointment of a Data Protection Officer (DPO) (in some cases)
• Data minimization and purpose limitation
• Specific controls for cross-border data transfers (e.g., Standard Contractual Clauses or Binding Corporate Rules)

Enforcement & penalties:

• Fines of up to €20 million or 4% of global annual revenue, whichever is greater

🏛️ CCPA – California Consumer Privacy Act (United States)

What is it?

The California Consumer Privacy Act (CCPA) is the most comprehensive U.S. state-level privacy law. It gives California residents rights over how their personal information is collected, sold, and used by businesses.

CCPA is often viewed as the U.S. counterpart to GDPR, though it has notable differences in scope and enforcement.

Who is subject to it?

Businesses that:

• Operate in California (or serve California residents), and
• Meet any of these thresholds:
  • Annual gross revenue over $25 million
  • Buys, sells, or shares personal data of 100,000+ consumers or households
  • Derives 50%+ of revenue from selling personal data

Key consumer rights:

• Right to know what personal data is collected
• Right to delete personal data
• Right to opt out of the sale or sharing of personal data
• Right to non-discrimination for exercising privacy rights

The California Privacy Rights Act (CPRA), which became effective in 2023, expanded CCPA by adding new protections and establishing the California Privacy Protection Agency (CPPA).

Enforcement & penalties:

• Civil penalties of up to $7,500 per violation
• A private right of action for certain data breaches

📋 DPIAs – Data Protection Impact Assessments (GDPR Requirement)

What is it?

A Data Protection Impact Assessment (DPIA) is a mandatory risk assessment under Article 35 of the GDPR. It is required before undertaking any data processing that may pose high risk to individual rights and freedoms.

Think of a DPIA as a privacy risk “pre-check” for high-impact initiatives.

Who is subject to it?

Any organization—EU-based or not—that engages in:

• Automated decision-making or profiling
• Large-scale processing of sensitive data, such as health or biometric info
• Systematic surveillance, such as monitoring public areas with CCTV

Common sectors where DPIAs are required include:

• Health tech
• Fintech
• HR platforms
• AI-driven SaaS or analytics tools

DPIAs must include:

• A description of the processing activity and its purpose
• Assessment of necessity and proportionality
• An analysis of potential risks to individuals
• Steps to mitigate those risks (e.g., pseudonymization, encryption, access restrictions)

Relevance in M&A:

Failure to conduct a DPIA when required is a GDPR violation. If an acquirer plans to scale or repurpose existing data for new products or services, unaddressed DPIA requirements may lead to regulatory fines or post-close remediation costs.

Why This Matters in M&A

• Non-compliance with GDPR or CCPA can result in millions in fines, reputational damage, and data remediation requirements—liabilities that often transfer to the buyer.
• Incomplete or missing DPIAs can stall post-close expansion plans, especially in AI, healthcare, and analytics-heavy sectors.
• Understanding jurisdictional exposure—even for U.S.-based companies—is critical, as global data flows create legal obligations far beyond the borders of the business.

Final Thoughts

Privacy compliance is no longer optional—and in M&A, it’s a value-impacting factor. Understanding the applicability of GDPR, CCPA, and DPIA obligations can help buyers avoid unexpected liabilities and enable sellers to position themselves as secure, compliant operators.

📩 Want help navigating the data privacy landscape during diligence? Colonnade Advisors works with clients to identify regulatory exposure, assess compliance posture, and prepare for buyer review.