As American and Canadian companies continue to hire product, design and engineers internationally, it may be interesting to learn how these professionals will handle user data. Quite often, they are bound to also comply with the local regulatory frameworks surrounding Personal Identifiable Information (PII) data handling. Each country in the region has its own set of laws and requirements that govern the collection, storage, and processing of PII. Read on for a brief overview of the PII compliance regulatory landscape per country.
Beginning with the Why: what Happens if Companies Don’t Comply to PII Regulations?
Companies that fail to comply with local PII legislation face consequences that vary depending on the specific jurisdiction and severity of the violation.
6 Potential Outcomes and Consequences
1. Legal Penalties
Non-compliance with PII regulations can result in significant legal penalties, including fines, sanctions, or even legal action. The exact penalties will depend on the specific laws and regulations of the country where the violation occurs.
Such is the case of Telegram, which recently found itself in hot water after failing to comply with a court order in Brazil. The repercussions were severe: the app was blocked for several days and faced a hefty fine exceeding $200,000.
2. Reputational Damage
Failure to protect PII and comply with regulations can lead to severe reputational damage for US companies. This can result in a loss of customer trust, negative publicity, and potential harm to the company’s brand image.
Major US data breaches in the past decade have left key brands like Yahoo, Facebook, and Linkedin vulnerable, exposing millions of users. The ripple effect extends to sinking stock prices and potential losses in the millions or even billions, and of course, it raises concerns when it comes to brand reputation.
3. Data Breach Notification Requirements
Many countries have specific data breach notification requirements, mandating that companies inform affected individuals and relevant authorities in the event of a user data breach. Failure to comply with these obligations can lead to additional legal consequences and reputational harm.
Meta, the social media giant, recently faced a staggering fine of over 390 million euros in the European Union due to breaches in privacy laws. This serves as a stark reminder that the General Data Protection Regulation (GDPR) is one of the most stringent privacy regulations globally. The scrutiny on compliance has intensified, particularly for Big Tech companies.
4. Business Restrictions
Non-compliance with PII regulations may also result in business restrictions or limitations. Regulatory authorities may impose restrictions on data processing activities or even prohibit the company from operating in the country until compliance is achieved.
One of the most recent impositions of business restrictions was exemplified by the threat of a TikTok ban in the United States. The threat stemmed from concerns over ByteDance’s ambiguous utilization of user data, which had the potential to track browsing history and location information.
5. Loss of Market Access
Non-compliance can lead to restrictions on market access in the respective country. Regulatory authorities may impose barriers or limitations on US companies’ ability to conduct business or provide services within their jurisdiction, affecting market expansion and growth opportunities.
6. Civil Litigation
Individuals whose PII has been mishandled or compromised may initiate civil lawsuits against the non-compliant US company. This can lead to financial liabilities, settlements, or damages awarded by the courts.
Given the potential legal, financial, and reputational consequences, implementing appropriate data protection measures, and respecting individuals’ privacy rights is non-negotiable.
Key Points to Address When Building International Teams that Will Handle PII
Be it an in-house team, augmented, or fully outsourced team, the result of their work impacts the company’s ability to remain compliant. To ensure a smooth and compliant expansion, it is crucial to consider the local regulatory frameworks for handling Personal Identifiable Information (PII) data. Here are key aspects your Data Protection Officer (DPO), Data Security team, Chief Information officer (CIO), and Chief Data Officer (CDO) must do their diligence on:
- 1. Understanding PII Regulations: American and Canadian companies must familiarize themselves with the specific PII regulations in the Latin American countries they are expanding into. This includes being aware of the relevant laws, regulatory agencies, and key requirements that govern PII data handling.
- 2. Compliance with Local Laws: To successfully navigate the PII regulatory landscape, companies need to ensure compliance with the applicable laws and regulations in each country. This involves obtaining user consent, implementing security measures, and adhering to principles such as purpose limitation, data minimization, and individual rights.
- 3. Data Transfer and Storage: Companies must also consider the requirements and restrictions related to the transfer and storage of PII data across borders. Some countries may impose specific data localization or data transfer mechanisms that need to be taken into account to maintain compliance.
- 4. Appointment of Data Protection Officers: In certain countries, such as Brazil, the appointment of a Data Protection Officer (DPO) may be mandatory. Understanding the obligations and responsibilities associated with this role is essential for companies operating in these jurisdictions.
Legal teams may also want to be knowledgeable on the subject. To reduce complexity, transferring part of this responsibility to a third party – such as Ubiminds – can be a legal, stress-free way to stay compliant and mitigate risk … but more on that later.
PII Compliance Specificities per Country in LatAm
So what does the regulatory framework look like in each country? Below, is a series of indications on how each country deals with personal and/or sensitive information. For comparison reasons, we’ve added USA and Canada below.
United States 🇺🇸 (for comparison)
In the United States, companies are subject to strict regulations for handling personally identifiable information (PII) data, primarily governed by federal laws such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA).
| User Consent: Consent must be freely given, specific, informed, and unambiguous. | Purpose Limitation: PII can only be collected and processed for specific, explicit, and legitimate purposes disclosed to the user. | Security Safeguards: Organizations must implement appropriate technical and organizational measures to protect PII from unauthorized access, disclosure, alteration, or destruction. | User Rights: Users have rights to access their PII, request rectification or deletion, restrict processing, and object to the processing of their data. |
Canada 🇨🇦 (for comparison)
In Canada, PII data handling is regulated under the Personal Information Protection and Electronic Documents Act (PIPEDA). Companies must adhere to principles such as consent, purpose limitation, security safeguards, and individual access rights.
| User Consent: Organizations must obtain the knowledge and consent of individuals before collecting, using, or disclosing their PII. | Purpose Limitation: PII can only be collected, used, and disclosed for purposes that a reasonable person would consider appropriate under the circumstances. | Security Safeguards: Organizations must implement security safeguards to protect PII against loss, theft, unauthorized access, disclosure, copying, use, or modification. | User Rights: Users have rights to access their PII, request corrections, withdraw consent, and file complaints regarding the handling of their data. |
Brazil 🇧🇷
In Brazil, the General Data Protection Law (LGPD) governs the handling of PII data. It requires companies to obtain user consent, implement security measures, and provide individuals with rights to access, rectify, and delete their data. Companies are required to appoint a Data Protection Officer (DPO) responsible for overseeing data protection practices.
| User Consent: User consent is one of the legal bases for processing PII, and it must be provided through a clear and affirmative statement or action. | Purpose Limitation: PII can only be processed for specific, explicit, and legitimate purposes, and further processing must be compatible with those purposes. | Security Safeguards: Organizations must adopt technical and organizational measures to protect PII from unauthorized access, accidental or unlawful destruction, loss, alteration, or communication. | User Rights: Users have rights to access their PII, request its correction or deletion, object to its processing, obtain information about sharing with third parties, and withdraw consent. |
Chile 🇨🇱
In Chile, PII data handling is governed by the Personal Data Protection Law (LPDP). Companies must comply with principles such as consent, purpose limitation, security measures, and user rights.
| User Consent: User consent is required for the collection, processing, and transfer of PII, and it must be express, informed, and documented. | Purpose Limitation: PII can only be processed for specific and legitimate purposes disclosed to the individual, and further processing must be compatible with those purposes. | Security Safeguards: Organizations must adopt technical and organizational measures to protect PII from loss, alteration, unauthorized access, and any other form of illicit processing. | User Rights: Users have rights to access their PII, request its deletion or correction, oppose its processing, and be informed about the purpose of the processing. |
Colombia 🇨🇴
In Colombia, the Personal Data Protection Regime (RPD) regulates the handling of PII data. Companies are required to implement adequate measures to protect PII data and obtain user consent for data processing.
| User Consent: User consent is required for the collection, processing, and transfer of PII, and it must be obtained in a clear and unequivocal manner. | Purpose Limitation: PII can only be processed for the purposes informed to the data subject, and further processing must be consistent with those purposes. | Security Safeguards: Organizations must implement technical, administrative, and physical measures to protect PII from unauthorized access, loss, alteration, or destruction. | User Rights: Users have rights to access their PII, request its correction or deletion, revoke consent, and be informed about the use and purpose of their data. |
Mexico 🇲🇽
In Mexico, PII data handling is regulated under the Federal Law on Protection of Personal Data Held by Private Parties (LFPDPPP). Companies must adhere to principles such as data consent, purpose limitation, security measures, and user rights. They are required to implement appropriate safeguards to protect PII data and obtain user consent for data collection, processing, and storage.
| User Consent: User consent is required for the processing of PII, and it must be obtained through an express and unequivocal statement or action. | Purpose Limitation: PII can only be processed for the purposes informed to the data subject, and further processing must be compatible with those purposes. | Security Safeguards: Organizations must implement administrative, technical, and physical security measures to protect PII from unauthorized access, use, disclosure, alteration, or destruction. | User Rights: Users have rights to access their PII, request its correction or deletion, object to its processing, and limit the use and disclosure of their data. |
Peru 🇵🇪
In Peru, PII data handling is regulated under the Personal Data Protection Law (LPDP). Companies must adhere to appropriate safeguards to protect PII data and obtain user consent for data collection, processing, and storage.
| User Consent: User consent is required for the collection, processing, and transfer of PII, and it must be obtained through a clear and unequivocal statement or action. | Purpose Limitation: PII can only be processed for specific, legitimate, and informed purposes, and further processing must be compatible with those purposes. | Security Safeguards:Organizations must adopt technical, organizational, and legal measures to protect PII against unauthorized access, alteration, loss, or any other form of illicit processing. | User Rights: Users have rights to access their PII, request its updating or deletion, object to its processing, and be informed about the purpose of the processing. |
Expanding software engineering operations to Latin American countries offers immense opportunities for American and Canadian companies. Yet, if not done properly, it can open the company to the risk of non-compliance with PII regulations.
Want to simplify your expansion process and avoid the risk of failing to comply with local laws? Let’s have a chat!
Guilherme Guimarães connects knowledge, data, and insights that culminate in innovative business planning and solutions. He currently serves as Head of Finance and Administration, overseeing strategic economic and financial management and contributing to tactical decision-making. Guilherme is also deeply involved in Legal and DPO-related matters, ensuring compliance and data protection.
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