On August 27, 2024, Chile approved the Personal Data Protection Act (CPDP Act), a landmark piece of legislation that strengthens privacy rights and mirrors the European Union’s GDPR. For U.S. businesses that collect, store, or process personal data of Chilean citizens, this law has significant implications. The CPDP Act applies to companies outside of Chile, including those based in the U.S., if they handle the personal data of Chilean consumers. The law will take effect on December 1, 2026, and businesses must start preparing now to comply.
How the Chile Personal Data Protection Act Impacts U.S. Businesses Hosting Chilean Citizen Data
If your U.S.-based business hosts or processes data of Chilean citizens, you must comply with the new regulations under Chile’s Personal Data Protection Act. The law applies to businesses outside Chile under the following circumstances:
- If you process personal data of Chilean citizens – even if your company is based in the U.S.
- If you offer goods or services to Chilean citizens – for example, through e-commerce, legal, or marketing targeting Chilean consumers.
- If you monitor the behavior of Chilean consumers – such as tracking online activity or analyzing purchasing habits.
If any of these apply to your business, you must follow Chile’s new data privacy rules, regardless of where your business is located.
Key Requirements Under Chile’s Personal Data Protection Act for U.S. Companies
Here’s a breakdown of the key points U.S. businesses need to know to ensure compliance:
- Data Consent: You must obtain clear, explicit consent from Chilean citizens before collecting or processing their personal data.
- Data Subject Rights: Chilean citizens will have the right to access their personal data, request corrections, delete their data, and move their data to another service. U.S. companies will need to have systems in place to facilitate these rights.
- Cross-Border Data Transfers: If you transfer Chilean citizens’ data from Chile to the U.S. or any other country, you must ensure that the data is protected. This could involve specific contracts or legal safeguards to comply with the law.
- Data Protection Measures: Businesses must ensure that personal data is securely stored and processed. This includes protecting against data breaches and having proper data management practices in place.
What Happens If U.S. Businesses Don’t Comply?
Non-compliance with the CPDP Act can lead to serious penalties. The law has a tiered system for penalties, with fines based on the severity of the violation. These fines are calculated in Chilean Tax Units (UTM), which can fluctuate over time. As of the most recent data, 1 UTM equals approximately CLP 61,000 (Chilean Pesos), but this amount varies each month.
Here’s a breakdown of potential fines based on the severity of the infringement:
- Minor Violations:
- Penalty: Up to 5,000 UTM (~ CLP 305 million / ~ USD 387,000)
- Example: Failing to provide an email address for communication
- Serious Violations:
- Penalty: Up to 10,000 UTM (~ CLP 610 million / ~ USD 775,000)
- Example: Processing data without legitimate authorization
- Very Serious Violations:
- Penalty: Up to 20,000 UTM (~ CLP 1.22 billion / ~ USD 1.55 million)
- Example: Fraudulent handling of data
Repeat Offenses or violations by larger companies may incur fines that are up to three times the standard amount, with larger companies facing proportional penalties based on their annual revenues.
How U.S. Businesses Can Prepare for Compliance
Here are some simple steps to help U.S. companies comply with Chile’s Personal Data Protection Act:
- Review Your Data Collection and Processing Practices: Ensure that you have a clear, legal basis for collecting and processing personal data of Chilean citizens.
- Update Privacy Policies: Your privacy policy should be updated to reflect the rights of Chilean consumers, including their ability to access, correct, or delete their data.
- Implement Data Protection Measures: Securely store personal data, protect it from breaches, and ensure that it is only used for the purposes you’ve stated.
- Monitor Data Transfers: If you are transferring data from Chile to the U.S., ensure that you have the necessary legal safeguards in place.
- Train Your Team: Make sure your employees understand the new regulations and are trained on how to handle personal data from Chilean citizens.
Conclusion: U.S. Businesses Must Prepare for Chile’s Data Privacy Laws
The Chile Personal Data Protection Act is an important step in data privacy in South America, and it will affect U.S. businesses that host or process personal data of Chilean citizens. By complying with the law, you can avoid hefty fines and penalties, maintain trust with Chilean consumers, and align your business with global data protection standards.
The law goes into effect on December 1, 2026, so it’s important for U.S. businesses to start preparing now. Make sure you understand the requirements, update your data practices, and consult with your legal experts to ensure compliance.
Take action today!
- Get a comprehensive Data Protection Compliance Assessment tailored to your business.
- Ensure your company is ready for the 2026 implementation deadline.
- Contact us with your legal counsel for expert guidance on cross-border data transfers and privacy rights.
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