Privacy and M&A transactions: the dos and don’ts

By Alec Christie

Most mergers and acquisitions (M&A) transactions require parties to exchange at least some personal information, whether it is the seller’s employee or customer personal information. Addressing privacy compliance at an early stage of the M&A transaction allows sufficient time for remedial steps, both in terms of the transaction and the target’s compliance, to be taken.

While privacy concerns are often overlooked in M&A transactions (at least until after the transaction has completed), since 12 March 2014 the new re-invigorated Australian Privacy Principles (APPs) together with the very real prospect of fines for breaches of up to AUD1.7m (£960,000) means that privacy compliance is now an important issue in M&A transactions (and a potentially costly one if not addressed). That is, compliance both in terms of (i) the transfer and collection of personal information as part of the transaction and (ii) the target with privacy law in conducting its business.

If the transaction involves business operations or related entities in other jurisdictions in the Asia-Pacific region, you should note that significant legislative advancement on the privacy/data protection front has occurred in this region over the last two to three years. Advancements such that it will be necessary to consider the privacy/data protection obligations and impacts in each relevant Asia-Pacific jurisdiction. Also, given that the EU has been the leader in data privacy protection and is currently considering fines for non-compliance of up to two per cent of the annual turnover of organisations, any transaction touching on an entity based in or conducting business in Europe should be especially careful to consider privacy/data protection compliance…

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