You're not wrong, but, what internet company doesn't operate within the EU? If you operate in the EU, and handle EU citizen's data, you have to conform to the GDPR.

I don't think there's many internet companies that would not serve the EU because of it. Although, Google did pull out of China due to the censorship demands and the like.

If you have users in the EU, but no actual physical or legal presence whatsoever within the EU, technically you "have to" comply. But if you do not do so, there will not be any consequences.

As such, effectively it is not in scope and does not need to be considered.

However there are cases where you might still run into trouble. For example, if you accept payments from people in the EU, you may well end up being forced to comply via the payment networks' presence in the EU.

Hmm. You just agreed with me and then disagreed me :)

Again, I say this as someone who is implementing GDPR for a US-based company, and is also a EU citizen (Irish) and has sat more meetings with various legal groups than I care to remember (again, stress I'm not a lawyer).

It is all about a companies appetite for risk and how tied the are __PHYSICALLY__ to the EU (offices/employees/parent-companies/subsidiaries).

This also gets into areas of Extraterritorial Jurisdiction. Any country can claim this over any other territory they wish. But, for the claim to be effective (except by use of force), it must be agreed either with the legal authority of the country.

Right now there appears to be none. No one is clearly citing any treaty with the EU as giving them this authority.

The GDPR goes beyond physical presence. It's strange that your legal team would not know this. See my previous comment [1]. My own understanding based on conversations with lawyers (who spoke to regulators in France) is that the law is designed to target any business that targets EU citizens. The territorial scope is formally global but obviously this is very much narrowed to businesses who (1) are pursuing EU customers and (2) are carrying out surveillance of EU customers. Surveillance does not include legitimate business needs btw, but it does include a lot of things that web sites do today without even realizing that it is surveillance (the classic example here is targeted advertising where ads are selected based on personal data).

BTW it's important to understand the real enforcement vector here. It's not like you'll have "EU cops" knocking on doors in America. Nor will anybody waiting for you to get off the plane in Germany. (I've actually seen this nonsense on HN in recent days.) The very real power they do have is over banks and payment processors. It's quite possible that if you're doing business with EU customers and you have bank accounts in EU or work with EU banks or EU payment processors then they'll be able to exert significant leverage against your business. But if you have no direct contact with the EU financial system and your website is hosted in the US in English (or even if it's in French but it's clear you're pursuing US customers) there's little they could do to you even if they wanted to.

[1] https://news.ycombinator.com/item?id=16956123

OK. I think we agree on the core parts. Its a question of being able to enforce and your level of risk.

Right now, everyone is in "wait and see" mode on how this will play out.

Just to clarify, as I learned this the other day, it's not about EU citizenship, but about being "in the Union". A resident alien is covered as are vacationers, but only while they are physically in the EU.

The regulation asserts the scope of data protection as global; it's applicable to all foreign companies processing data of EU residents, whether the companies are based in the EU or not.

It will be interesting to see how the mechanisms of enforcement play out but I imagine there are plans for direct and indirect implementation in situations that warrant the harshest options (ban on processing and/or monetary fine). E.g. getting cooperation from payment or logistics processors to stop processing EU sales of a offending foreign company. A halt on sales or delivery of goods to such a large region could be crippling for a company.