Why Is Data Privacy Important?
In a recent Pew Research Survey, 52% of adults in the United States decided not to use a product or service because of data privacy concerns. Growing anxiety over privacy is not limited to brands but also drives consumers away from websites, devices, and social media. Let’s take a look at why data privacy is so important for consumers and businesses alike.
Why Is Data Privacy Important
Data drives an increasing number of businesses in the current market. Personalized experiences, automated marketing messages, and science-driven insights all depend on the quality and amount of data businesses can gather. However, this also suggests that companies have more data assets to manage and protect, which puts data privacy at the forefront of consumers’ concerns.
Data privacy is the practice of controlling how data is collected, used, stored, and shared within legal bounds. For consumers, privacy entails knowing and controlling the extent to which organizations use their personal data. Privacy also includes the right to be forgotten by companies that collect and store users’ personal data.
Still unsure why data privacy is important? Consider the following findings from Pew Research:
- 57% of US adults who personally experienced a data breach were more likely to avoid products and services over concern about their data privacy.
- U.S. adults say they gave up using websites (21%), electronics (11%), and social media (10%) out of concern about the amount of personal data requested.
- The reasons U.S. adults gave for not using these products or services include sharing personal information (15%), lack of trust in a service provider (9%), and being surveilled (8%). Smaller groups cited unease about giving payment information, third-party connections, and spam.
It’s clear that without data privacy, consumers are unwilling to build lasting relationships with brands. Companies need to demonstrate trustworthiness in handling consumer data to earn their trust and loyalty.
Data Privacy Laws
Playing loose with data privacy carries financial consequences as well as legal implications. Take a look at the following data privacy laws and emerging expansions in privacy regulations.
General Data Protection Regulation (GDPR)
The General Data Protection Regulation (GDPR) has a reputation as the strictest data privacy and security law worldwide. It governs data collected on EU citizens and international organizations targeting data related to EU subjects.
The official website, GDPR.eu, states that infringing on the right to privacy or the right to be forgotten puts companies at risk of facing monumental fines—up to €20 million or 4% of the offending company’s global annual revenue, whichever amount is higher. Possible violations include:
- Unlawful, unfair, or non-transparent data processing
- Processing personal data without documented consent
- Violating data subjects’ right to know what data is collected and how it is used
- Unauthorized cross-border data transfers
- Non-compliance with supervising GDPR authorities
In addition to penalties, data subjects can seek compensation from companies whose unlawful use of their private data leads to material or non-material damage. The GDPR’s penalties aim to make non-compliance a painful, expensive mistake for offending companies. It must be noted that the law applies to all businesses, from multinational firms to micro-businesses.
U.S. Privacy Laws
Data privacy laws are also gaining unprecedented momentum in the U.S., with several state laws scheduled to take effect in 2023:
- California Privacy Rights Act (January 1)
- Virginia Consumer Data Protection Act (January 1)
- Colorado Privacy Act (July 1)
- Connecticut Data Privacy Act (July 1)
- Utah Consumer Privacy Act (December 31)
Fines for non-compliance vary by jurisdiction but can range from thousands to millions of dollars. The current Privacy Act (enacted 1974) imposes fines of up to $5,000 for unauthorized disclosure of personal identifiable information (PII) and requesting personal records under false pretenses, among other violations. Offending companies are also liable for litigation and ensuing criminal penalties.
Upcoming Privacy Laws
Several forthcoming laws will expand data privacy rights in the EU. For example, the European Commission has proposed the ePrivacy Regulation (ePR), which will impose ePrivacy rules for the following digital channels:
- Electronic communication services like Facebook Messenger and Skype
- Communications content and metadata
- Cookies and consent requests
- Spam communications through email, text, and automated calls
A draft version of the ePR has already been adopted by the Commission and awaits finalization. The EC also announced the approval of the Digital Services Act and Digital Markets Act, known jointly as the Digital Service Package.
- Digital Services Act: Entered into force on November 16, 2022, it will apply obligations across the EU starting January 1, 2024.
- Digital Markets Act: Entered into force on November 1, 2022, it will apply obligations across the EU starting March 2024.
These two laws aim to make digital spaces safer by protecting user rights for digital services.
The rise of data privacy laws in the U.S., EU, and around the world underlines the growing importance of data security. The ability to guard personal and sensitive data from unauthorized access enables companies to foster consumer trust. More importantly, it keeps organizations out of legal trouble and penalty-free by maintaining compliance with privacy laws.
Keep Data Safe With Treasure Data
Here at Treasure Data, we understand why data privacy is important to business success today. That’s why we developed an enterprise customer data platform that keeps data secure while delivering the best data privacy solutions for your company’s needs.
Treasure Data is compliant with the latest regulations and continually builds on a strong data security foundation to keep your data private and safe.
See what you can do with Treasure Data:
- Collect and centralize customer data from all sources
- Unify customer profiles using online + offline data
- Keep customers’ personally identifiable information (PII) safe
- Automate workflows for DSARs and privacy requests
- Keep global teams privacy-regulation compliant
- Manage permissions by region, organization, role, and more
- Integrate with authentication services for secure identification
- Create premium audit logs for monitoring activity
- And more
To learn more about how you can use Treasure Data to keeps data private and secure, consult an expert today. Want to learn more? Request a demo, call 1.866.899.5386, or contact us for more information.