The Difference in Applicability between GDPR and CCPA: Challenges for Small Businesses

Data protection regulations, like GDPR and CCPA, present challenges for SMEs, potentially fostering unfair competition. Balancing individual data rights with company realities is crucial for a fair digital ecosystem.


In the current global landscape, digitalisation has become an integral part of daily life, both in terms of social interactions and business transactions. This pervasive digitisation has led to an exponential increase in the generation and sharing of personal data – a phenomenon that raises profound concerns regarding privacy, security, and the rights of individuals over their data. To address these concerns, several jurisdictions have either implemented or are in the process of formulating stringent data protection regulations.

The European Union’s General Data Protection Regulation (GDPR) and the United States’ California Consumer Privacy Act (CCPA) are prominent examples of these regulatory endeavours. While both regulations fundamentally aim to ensure the protection of individual rights over personal data, they have distinct approaches and criteria, especially concerning their applicability to corporations of varying sizes. This Insight aims to highlight these differences, with a particular emphasis on the challenges confronted by small- and medium-sized enterprises (SMEs) and the ensuing implications for competitive dynamics within the market.

1. Distinct Approaches: GDPR vs. CCPA

The imperative to protect personal data has emerged as a paramount concern on a global scale, prompting divergent regulatory strategies across various jurisdictions. The GDPR [ 1] and the CCPA are prominent examples of these regulatory endeavours.

The GDPR, promulgated by the European Union in 2018, delineates a rigorous framework for the safeguarding of personal data. It encompasses any organisation that processes the data of EU citizens, irrespective of its geographical domicile. Its comprehensive stance ensures that entities ranging from nascent start-ups to established multinationals are uniformly subjected to the stipulated regulations and concomitant penalties.

Conversely, the CCPA, which was instituted in  the State of California in 2020, adopts a more stratified methodology. The statute sets forth explicit criteria to ascertain which companies fall under its purview. As per the CCPA, § 1798.140(c) establishes that an enterprise is deemed eligible if it registers annual gross revenues surpassing twenty-five million dollars, procures, obtains, or trades the personal data of 50,000 or more consumers, households, or devices, or accrues 50% or more of its annual revenues from transactions involving personal data. This modulated approach acknowledges the potential impediments that stringent regulations may pose to smaller enterprises, thereby providing a degree of adaptability.

While both regulatory frameworks, albeit with their unique methodologies, converge on the overarching objective of bolstering consumers’ personal data rights, the disparities in their applicability and strategies underscore the distinct challenges and priorities intrinsic to their respective jurisdictions.

2. Operational and Compliance Challenges for SMEs and the Issue of Unfair Competition

Adherence to data protection statutes, such as the GDPR and CCPA, requires a nuanced and multifarious approach. For companies spanning various scales, this often mandates a rigorous examination, and potential overhaul, of extant processes, systems, and contractual agreements. SMEs confront a distinct set of challenges in this arena.

Inherently, SMEs frequently operate within the confines of constrained resources, both monetary and in terms of human capital. The demands of GDPR compliance can be especially taxing for these entities. The regulation mandates unequivocal oversight over every procedure involving personal data, a stipulation that can be arduous for SMEs that rely on rudimentary planning, control systems, and informal operational protocols. The absence of standardised operational procedures, coupled with a paucity of dedicated in-house legal expertise, can exacerbate these complexities.

Conversely, the CCPA’s methodology, which predicates compliance on specific criteria related to a company’s scale and revenue, extends a degree of latitude to SMEs. By demarcating an annual gross revenue benchmark and other distinct criteria, the CCPA tacitly acknowledges the potential burdens that regulatory frameworks may impose on smaller entities.

Beyond operational intricacies, SMEs grapple with technological impediments. Technological advancements, exemplified by tools like knowledge graphs, are instrumental in facilitating enterprises to achieve contract compliance with the GDPR. Yet the accessibility of these technological solutions and the proficiency to deploy them effectively may be circumscribed for SMEs.

This discrepancy in compliance knowledge between big businesses and SMEs may lead to unfair competitive dynamics. Larger organisations, supported by significant workforces and capital, can commit resources to compliance relatively easily, leaving SMEs struggling to attain parity. Due to this gap, SMEs may find it difficult to compete, potentially reducing their market presence or exposing them to harsh penalties.

In summary, while the sanctity of data protection is indisputable in the contemporary digital milieu, it is imperative to discern and address the idiosyncratic challenges SMEs face in their compliance efforts and to consider the consequent ramifications for market competition.


The advent of the digital era has ushered in a plethora of challenges and prospects, with the safeguarding of personal data crystallising as a paramount concern. Statutes like the GDPR and CCPA epitomise concerted global endeavours to redress privacy and security apprehensions. Nonetheless, adherence to these regulations presents intricate challenges, notably for SMEs.

The pronounced divergence in compliance proficiency between large corporations and SMEs highlights a pivotal concern regarding unfair competition within the marketplace. While sizable enterprises possess the wherewithal to channel resources into compliance and technological advancements, SMEs have inherent disadvantages, potentially impinging upon their competitive standing. It is imperative that data protection statutes are meticulously crafted and executed, harmonising the need to uphold consumer rights with the pragmatic challenges that enterprises, particularly SMEs, grapple with. A synergistic collaboration amongst governmental bodies, the private sector, and academia emerges as essential to foster an equitable business milieu and to pave the way for a fortified digital future for all.

The Insights published herein reproduce the work carried out for this purpose by the author and therefore maintain the original language in which they were written. The opinions expressed within the article are solely the author’s and do not reflect in any way the opinions and beliefs of WhatNext.Law or of its affiliates. See our Terms of Use for more information.

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