Data privacy has become a crucial issue for organizations of all sizes, especially with the increasing number of privacy regulations worldwide. To ensure that your organization stays compliant, it is essential to understand the basics of data privacy. Today, we’ll be looking at nine critical privacy questions you should be able to answer.
The first step to determining which privacy regulations apply to your organization is to understand the data that your business collects. This includes not just consumer data but also data from employees, such as government issued id numbers and biometric login information.
The next step is to identify the states and countries where your organization operates, as well as the industry you belong to. Highly regulated industries, such as financial services, healthcare, and insurance, will likely have additional privacy requirements. Organizations operating globally must also be aware of global privacy laws, such as EU’s General Data Protection Regulation (GDPR) and China’s Personal Information Protection Law (PIPL).
Fines and penalties for non-compliance with privacy laws vary greatly, depending on the regulation violated, the severity of the violation, and the number of people impacted. The direct financial costs of non-compliance can be significant, but businesses must also consider the indirect costs of their reputation taking a hit. Recent stories such as the massive Facebook exodus of 2022 shows that customers will not hesitate to leave a company behind if they feel their rights are being violated.
It is important for businesses to prioritize data privacy, not just because of potential legal penalties, but also because it can have a direct impact on their reputation and customer loyalty. Consumers are becoming increasingly aware of companies that abuse their personal data, and many are willing to abandon a brand if their data is used without their knowledge. To avoid this, businesses should take steps to keep personal data private, secure, and used ethically.
Short answer: the whole company is. Everyone in your company uses data in some way, even if indirectly, and thus everyone should assume at least some responsibility for complying with legal requirements.
In other words, responsibility for data privacy in an organization does not belong to just one department. Operations, finance, legal, marketing, and any other company departments each have their own tasks to perform. It is important for privacy to be embedded into every decision across the enterprise, and for every employee to receive ongoing training on company security and privacy practices. After all, one mistake can result in a costly data breach.
Small businesses may still be subject to privacy regulations, even if they are not generating significant revenue or collecting large amounts of data. Privacy regulations in the US often require businesses to meet certain triggers, such as revenue or data collection thresholds, before they must comply. Each law tends to define its own unique triggers, so it’s crucial to consult with an attorney to ensure compliance.
Individual rights are essential for protecting personal data and ensuring that individuals have control over their information. The rights of the data subject, or consumer rights, are commonly referred to as individual rights. A data subject is any person whose personal data is collected, stored, or processed.
The GDPR outlines specific requirements for individual rights management. There are eight individual rights listed in the GDPR, including:
Exercising any of these rights is called filing a data subject access request, or DSAR. (Read more about DSARs here.) Most DSARs require a response within 30-45 days and organizations must be prepared to handle them promptly. And since several US state privacy laws have adopted slightly altered versions of these data subject rights, American companies need to understand and learn how to comply with them.
Data privacy regulations have a significant impact on the marketing and sales industry, particularly in terms of data collection and tracking. Before 2018, marketers relied heavily on detailed tracking through first and third-party cookies to optimize marketing efforts and increase return on investment. However, with the introduction of the GDPR in 2018 and the blocking of tracking by browsers like Safari and Firefox, it’s become more challenging for marketers to collect data.
Organizations are likely to face increased costs and a lower ROI as they shift from privacy-intrusive methods to more privacy-compliant methods of data collection. They now have to convince customers to willingly provide quality data, rather than relying on third-party help to do so. To increase engagement, organizations should focus on personalization and tailor their resources and campaigns to individual preferences.
While privacy-compliant methods may cost more and require more effort, they will lead to stronger, more authentic relationships between the organization and its customers.
Privacy and security are two related but distinct concepts. Privacy pertains to the collection, usage, and storage of data, while security focuses on the protection of an organization’s assets from unauthorized access. To ensure privacy, organizations must adhere to regulations and laws regarding data collection, and be transparent in obtaining consent from individuals. Meanwhile, security aims to prevent data breaches and unauthorized access to systems, networks, and stored data. It’s essential to have both privacy and security in place to keep data safe.
Finally, of course, consult with a lawyer who specializes in privacy law. They’ll be able to help you determine if a vaguely worded law applies to your organization, and how you can handle compliance.
Sensitive data refers to specific types of information that require a higher level of protection due to their confidential or personal nature. Depending on the regulations and laws, the definition of sensitive data may vary, but typically it includes health records, genetic information, biometric data, political views, religious beliefs, and trade union membership.
The GDPR defines sensitive data as “special categories of personal data” that fall under a higher level of protection. According to this definition, personal data is any information related to an identified or identifiable individual, and the processing of sensitive personal data is subject to strict restrictions outlined in more detail here.
Organizations that process sensitive data are required to obtain the consent of the individual or meet other requirements for lawful processing. The specific requirements will depend on the laws applicable to the organization.
While it may seem like data privacy laws are just another complicated set of regulations your organization needs to comply with, many people believe privacy is a fundamental human right. Privacy shouldn’t be an afterthought for organizations. It’s time to embrace the best way to incorporate privacy into your company’s overall structure: privacy by design.
Privacy by design implements privacy and security controls into a product or service at the outset of the planning process, rather than trying to patch it in after the fact. Although there’s no specific set of rules an organization should follow to implement privacy by design, its fundamental principles—including data minimization and full lifecycle security—should be part of your strategy. We discuss privacy by design in more detail here.
Whether selling to businesses or looking for funding, your partners expect proof of compliance with data privacy regulations. Individual consumers are also catching on to companies that use their data irresponsibly—and those companies are paying the price.
Organizations that embrace privacy will avoid fines and gain new customers, vendors, and employees who value privacy as a human right. Ready to make changes and earn your customers’ trust? Get in touch with us today to get started.