For more than a century, the economic relationship between the United States and the United Kingdom has been nothing short of a success story. Thousands of U.S. companies, large and small, have significant operations in the UK and their business dealings are a major part of the economy, providing services and producing goods in every nation and region of the UK. In fact, according to a report released in December 2021 by the Department for International Trade in the UK government, U.S.-owned businesses supported 1.48 million jobs across the UK in 2019 — in other words, nearly one in 20 UK workers (4.7%) were employed by a U.S.-owned business in that year.
Adding Strength to UK Data Protection Standards
Accordingly, when the UK government recently unveiled proposals to replace the General Data Protection Regulation (GDPR) with more flexible and less stringent laws, the U.S.-based companies that operate in the UK couldn’t help but notice. This legislation — the UK Data Reform Bill — promises to increase financial penalties for spam callers, reduce the volume of cookie pop-ups that users have to deal with and strengthen the UK’s data protection standards.
The UK government claims this bill will reduce compliance burdens and foster better innovation while delivering around £1 billion in business savings. The bill also includes proposals for improved data sharing practices to support the delivery of public services and commits to maintaining the robust standards of data protection vital to protecting the public.
This new bill comes at a good time in the UK, since data-driven trade generates nearly three quarters of the UK’s total service exports, or more than £230 billion for the economy. At present, however, much of the specifics of the legislation and how it will work in practice have been left unanswered, including exactly how this bill will affect companies based in the U.S. that operate in the UK. Let’s take a look at what we know about the new bill and what U.S. companies should expect and prepare for ahead of it being enacted.
Data and User Tracking Differences
The new legislation outlines several changes surrounding data and user tracking that differ from existing practices. This means inevitable changes to the privacy and security standards currently in place in UK and U.S. businesses with significant operations in the UK. Making these changes will require technical investment and careful review.
To ensure a smooth transition, businesses need to proactively take several steps before the bill becomes effective. First, it is crucial to review the roles associated with compliance in the organization and ensure that each role’s responsibilities are clearly defined. Then the organization should identify which business processes are affected by the new regulation and prioritise adjustments to these processes. The next step is documenting and assessing the company’s existing compliance practices: Do they meet or exceed the upcoming requirements? With this data collected, it will be much easier to plan the implementation of the revised standards.
For larger organizations, there will be no one-size-fits-all compliance architecture. Depending on the markets a company sells to, they may have to approach various customers in different ways to both ensure compliance and provide competitive ease of use for each market segment. For example, opting for a stricter approach to cookie handling to ensure EU compliance will likely frustrate UK-based customers who are used to a simpler approach.
The Time to Prepare is Now
U.S.-based businesses with operations in the UK should also be well-prepared to answer customer queries and armed with a documented response to the coming legislation as soon as possible. An official statement should be accessible by everyone in the organization in case any employee receives a request.
One of the main difficulties that will have to be navigated is where the Data Reform Bill does not naturally align with the EU GDPR legislation. Moreover, U.S. organizations with UK operations must anticipate and guard areas of possible vulnerability while the transition takes place.
Nearly one and a half million Britons go to work for American-owned companies every day in the UK, and that number is expected to continue to grow. While there is still much to be determined about the new Data Reform Bill, U.S.-based companies operating in the UK can begin now to prepare for when the bill goes into effect by taking the steps outlined in this article.
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