What Is Data Privacy? How Do You Comply With Regulations?

By Grudi and DāSTOR

Data privacy should be a vital concern for virtually every business and organization in today’s information-intensive environment. It goes beyond security concerns and business best practices, however. Failure to maintain data privacy in compliance with the array of overseeing agencies and organizations could result in stiff fines, penalties and even criminal charges.

A key Grudi partner in helping customers maintain their data privacy and remain in strict compliance is DāSTOR. DāSTOR provides enterprise data center and private cloud solutions that leverage foundational infrastructure and interconnectivity to drive scalable and reliable digital services.

Patrick Brown, DāSTOR’s Director of Business Development, Strategic Partners, has provided invaluable information and excellent recommendations for how businesses can understand and ensure data privacy.

Data is now being created faster than ever before, and it is showing no signs of slowing down. The world is also becoming more technologically integrated, and businesses are increasingly data driven. As a result, it is imperative that data is properly managed at all times. According to Fortune Business Insights, the data security industry was worth over a billion dollars last year and is projected to continue growing exponentially over time.

Data privacy is less about protecting data from being compromised and more about how data is controlled once collected. This branch of data security addresses how data should be handled during collection, usage, and storage.

A key motivation for businesses to comply with data privacy regulations is to avoid fines. Organizations that don’t comply with these regulations can be fined up to tens of millions of dollars and even receive a 20-year criminal penalty. If your organization hasn’t already set up a systematic compliance plan, it’s time to create one right away. It takes time and effort, but it’s something that must be done as soon as possible. 

Data privacy is less about protecting data from being compromised and more about how data is controlled once collected.

There are three main concerns when it comes to data privacy. The first is consent. This relates to how data is shared with third parties or other entities that are on the outside of a data privacy agreement between you and a client. The second focus of data privacy is notice, which addresses the legal collection and storage of data. The third area is regulatory restrictions in data privacy. Restrictions can occur at the national level as well as within individual states. Remaining compliant with these regulations not only helps protect your business from fines and criminal charges, but also helps protect customers’ and clients’ rights to privacy. There are a lot of moving parts when it comes to data privacy, so it is important to implement a complete solution.

No matter where your business operates there are laws that control how data is used, stored and shared. For example, the California Consumer Privacy Act (CCPA) was enacted in 2018 and went into effect in 2020. The purpose of the act is to protect the rights of California residents in regard to having their data sold by companies. While you may not operate your business in California or have any customers or clients there that you know of, this still applies to you.

If your company has a website, people from all over the world can access it, and even one time is enough. It is important to remember that you have a responsibility to be compliant with all privacy laws and regulations that may impact the people who use your business or services, purchase any products you sell and interact with your company. The CCPA outlines which businesses are subject to its regulations.

If your company has a website, people from all over the world can access it, and even one time is enough.

If a for-profit business meets any of the following criteria, it is subject to the CCPA:

  • The business has a gross annual revenue of $25 million or more.
  • The business purchases, receives or sells personal data from 50,000 sources or more. Sources include individuals, households or devices.
  • The business earns 50% or more of its annual revenue through the sales of personal data.

Beyond these criteria, the language of the CCPA suggests that any business that handles personal data from at least four million people may face additional obligations in the future. The act outlines the rights of Californians and includes a substantial list of obligations for businesses it covers. Once again, non-compliance could result in thousands of dollars in fines.

Under the CCPA, every business must do the following:

  • Notify customers in advance when personal data will be collected.
  • Make it easy for customers to opt out of having their data sold.
  • Respond to consumers exercising their rights under the act in a specific timeframe.
  • Verify the identity of consumers who make requests under the act.
  • Disclose any financial incentives for collecting and selling the data. In addition, they must disclose how the value of the data was calculated and the reason that these incentives should be permitted under the act.
  • Keep records of any requests and responses from consumers that are exercising their rights under the act.
  • Maintain an inventory of data and track the flow of that data.
  • Disclose all data privacy policies and how they are applied in practice.

Clearly, data privacy is something that lawmakers and consumers take seriously. The scope of the regulations will very likely continue increasing. An effective approach to data privacy is the best way to protect your business and remain in line with current and future regulations.

Clearly, data privacy is something that lawmakers and consumers take seriously.

The History and Current State of Data Privacy Laws

Privacy laws exist to protect the right to privacy for individuals and businesses. This right has been widely upheld as one of the foundations of freedom. It is important to understand these laws and the regulations they impose on your business as you take steps to ensure and preserve data privacy in the long term.

The first data privacy law was the US Privacy Act of 1974, which addressed data held by government agencies. Since then, there have been a number of acts passed into law, which include:

  • The Health Insurance Portability and Accountability Act of 1996: Commonly known as HIPAA, this act protects patient information in a medical setting.
  • The Gramm-Leach-Bliley Act of 1999: Abbreviated as the GLBA, this act protects financial information that is considered nonpublic personal information.
  • The Children’s Online Privacy Protection Act of 2000: COPPA was created to protect data belonging to children under the age of 12.
  • The Privacy Rule of 2000: This was an addition to HIPAA that served to create extra layers of safety for the private health information of individuals.
  • The Sarbanes-Oxley Act of 2002: This act was created to protect people against the fraudulent practices of corporations across a variety of industries. It is commonly known as SOX.
  • The Federal Information Security Management Act of 2002: FISMA was enacted to order federal agencies to protect the data that they collect and store.
  • ISO 27001 of 2013: This futuristic-sounding piece of legislation provided an outline for how information security management systems should work.
  • The General Data Privacy Regulation of 2018: The GDPR applies to citizens of the European Union and seeks to protect their personal data.
  • The California Consumer Privacy Act of 2020: The CCPA was created in the state of California to protect the data of its residents.

All these laws combine to help protect and preserve the data privacy of both individuals and businesses. Each of them is a very important piece of the larger puzzle.

All these laws combine to help protect and preserve the data privacy of both individuals and businesses. Each of them is a very important piece of the larger puzzle. However, none of the privacy laws that have been enacted over the past several decades truly define data privacy.

Data privacy is a very complex issue, and there is no true definition of it under the law. Instead, each of these acts provides an outline of best practices to be followed and details the rights of the individuals or corporations that it protects. The lack of an explicit definition is one reason why it is very important to understand privacy laws and how they apply in your industry and to your individual business.

Another thing to understand about data privacy legislation is that it is less important where your business operates from and more important where your clients and customers live. They are the ones who are being protected under these laws, so you need a data privacy approach that acknowledges and addresses their proximity.

In addition, data privacy laws are not complete. The more data-driven the world becomes, and the more data production increases, the more laws we are going to need to make sure that data privacy is being protected from all angles.

As an accountable business, it is vitally important that you establish and effectively implement a sound data privacy initiative. Grudi is here to help. Working with partners like DāSTOR and Patrick Brown, we can help you stay in compliance, protect your business and ensure your customers’ privacy. > GET HELP NOW!

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