What is Data Privacy? Definition and Compliance Guide


The area of data management known as data privacy is responsible for processing personal data in accordance with all applicable laws, rules, and best practices for privacy.

In order to secure data from unauthorized parties, access restrictions must be put in place. When required, authorization from data subjects must also be obtained, and data integrity must be upheld. Data privacy should be a top priority for businesses. Failure to comply with data privacy rules can cause major losses. Think of legal action, heavy financial penalties, and brand damage. Data governance requires organizations to know what data they have, where it is stored, how it flows through their IT systems, and how it is used. Data Administration best practices allow organizations to maintain data integrity and trust in their data.

Personal data protection

Any data can be sensitive, from company earnings information to sales figures or product roadmaps. The most sensitive data includes information about people, personal data about an identified or identifiable person. PII is not always as clear as the name or Social Security number. Sometimes, it is another identifier such as an IP address or cookie information. If it is possible to identify a person based on a data field or record, that data is personal data.

The importance of data privacy in today’s business world cannot be underestimated. In most parts of the World, personal data such as credit card information or personal health information is subject to data privacy laws.

GDPR and other data regulations

Data collection, storage, and disclosure practices are described in data privacy regulations. The rules relating to data privacy that are the subject of the most heated discussion include:

The General Data Protection Regulation (GDPR) of the European Union is, in fact, the most comprehensive data privacy regulation. This applies to EU citizens and all companies doing business with them, including countries that are not located in Europe. The GDPR empowers individuals to determine what data organizations store, request that organizations delete their data, and receive notifications of data breaches. Non-compliance can result in heavy fines and legal action.

CCPA: In the United States, the California Consumer Privacy Act (CCPA) is a state-level law. It permits citizens of California to seek the deletion of any personal information that organizations may have on them as well as information about what information has been shared with outside parties. These measures apply to consumer data collected within the state.

Data privacy regulations include data sovereignty

Data sovereignty is the concept that data is subject to the laws of the place where it is collected. For example, in July 2020, the Schrems II verdict decided that, according to the GDPR, consumer data for customers in the EU should be hosted on servers within EU borders. Think of data sovereignty as a way to ensure that user data stays close to home for its own security. By determining where data can be stored and processed, governments aim to protect their citizens ‘ data from getting into the wrong hands.

Data sovereignty becomes important when looking at cloud service providers. 

Data laws and acts worldwide

While discussion of General Data Protection Regulation in the EU has brought information privacy to light for businesses and consumers around the world, privacy laws have far deeper roots than most people realize. In fact, the right to privacy was incorporated into the UN Universal Declaration of human rights in 1948. Data privacy laws are being enacted all the time, and so far most countries around the world have passed data laws and acts. What rules you need to follow will depend on where your company operates, what boundaries you trade across, and what industry you are in. Although the majority of service providers are subject to some sort of data restrictions, it is commonly known that healthcare providers, financial institutions, and the insurance industry are heavily regulated. Even if your business is not in a highly regulated industry, regulatory compliance is an essential part of doing business with customers in those areas.

Data privacy depends on data health

Data privacy runs alongside data health. Data is healthy if it is available throughout the organization to everyone who needs it when they need it, and they can rely on it to provide value in their analysis or decision-making processes. If your customer data is glitchy, or your data is secret and inaccessible throughout the organization, you are probably not complying with the data rules. Unhealthy data cannot be managed with enterprise-wide data governance, so you won’t be able to meet deadlines for GDPR or CCPA search requests. The good news is that data health can be achieved through a combination of preventive care, supportive treatment and supportive culture. You can evaluate data health with data quality metrics and by evaluating the commercial value of your data, even though data health measurements will appear different for every firm.

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