Data Privacy Explained: Its Relevance and How It Works to Secure Your Information
The digital age has made access to information a breeze but has also lowered privacy standards. Digitally stored data needs to be protected from external and internal threats, and it needs to be determined how and with whom it can be shared.
An essential aspect of data privacy is the control over data sharing with third parties, the storage of that data, and the specific regulations that apply to those processes. Here, we will explore the different elements that conform to data privacy and learn about the main data privacy regulations in the US.
What is Data Privacy?
To get started, it is essential to understand the concept. According to the Storage Networking Industry Association (SNIA):
"Data privacy, sometimes also referred to as information privacy, is an area of data protection that concerns the proper handling of sensitive data including, notably, personal data but also other confidential data, such as certain financial data and intellectual property data, to meet regulatory requirements as well as protecting the confidentiality and immutability of the data."
As we can see, data privacy refers to adequately handling and holding personally identifiable information. This includes names, addresses, social security numbers, health records, and financial information. The idea behind data privacy is to protect the privacy of individuals and ensure that the data is only available to approved parties.
What's the Difference Between Data Privacy and Data Security?
Data privacy and data security are critical concepts essential to protecting personal information and sensitive data in today's digital age. Both concepts are closely related, but they have distinct differences that are important to understand.
Due to their similarity, data security and data protection are often confused. Understandably, people would get the two terms mixed up since many believe that protecting data is the same as keeping it secure. However, these terms have distinct meanings that are not interchangeable.
With the rise of big data and the Internet of Things, personal information is collected from various sources, including social media, online shopping, and even smart home devices. As a result, organizations need to be transparent about how they collect, use, and share customer data, and for individuals to have control over their personal information.
Examples of data privacy practices include:
Obtaining consent from individuals before collecting their personal information
Providing clear and concise privacy notices that explain how personal information will be used
Implementing security measures to protect personal information from unauthorized access or breaches
Providing individuals with the ability to access, correct, or delete their personal information
Complying with data protection laws and regulations such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA)
When it comes to digital information, data security is the process of preventing its loss, misuse, or alteration at any point in time. It's an idea that incorporates administrative and access controls, the logical security of software applications, and the physical security of hardware and storage devices. The policies and procedures of the organization are also included.
Examples of data security practices include:
Encrypting sensitive data to protect it from unauthorized access
Implementing firewalls and intrusion detection/prevention systems to prevent hacking and data breaches
Regularly updating software and security systems to address new threats
Conducting regular security audits and penetration testing to identify vulnerabilities
Providing security awareness training to employees to help them identify and prevent security threats
Why Is Data Privacy Important for People and Companies?
Nowadays, data is considered the "fuel" of many businesses. This is because many operations and business decisions are made based on the data gathered by companies. If your company's information, for example, is taken by third parties, it can affect your operations, put your customers or users at risk, and even cause you to lose money.
Protecting information is vital for most people to guarantee their privacy and security. Information about finances, health, and other private consumer or user data can put people in danger if it falls into the wrong hands. Individuals may risk fraud and identity theft due to a lack of access control over their personal information.
Companies and individuals alike are becoming more aware of the monetary value of data and how important it is to protect it. At the same time, the general public is only beginning to grasp this concept: data functions as a commodity and has intrinsic value. Thus, it should be protected and preserved for the betterment of everyone.
Challenges Businesses Face When Protecting User Privacy
Like individual users, companies are constantly battling with Data Privacy, but on a much larger scale. Since they handle information regarding thousands of clients, they must be very careful and use top-notch security measures to keep that information safe.
The most common data privacy issues faced by businesses include the following:
Insufficient Data Privacy Plans: As you store more information, you should consider every new piece of data as a possible vulnerability in your privacy policies. You can strengthen your privacy by encrypting your data, backing it up on a cloud server, and routinely deploying monitoring software to track data access and security.
Proliferating devices: This is similar to the previous item. You have more data to manage when you bring more devices into the workplace. To handle this issue, your organization must manage compliance and data privacy from any source, across different operating systems, and across multiple apps.
Location Tracking: Hackers can access the location data of your employees to sell or leak trade secrets, sensitive consumer information, supply chain details, and business growth initiatives.
Data Trading: Consider one of the most pernicious problems in the digital sphere—data trading—when figuring out how to resolve data privacy problems unique to your business. It covers the access and theft of your private data by a third party, the sale of such data to other parties, and the ongoing sale and resale of data until the relevant leaks are fixed.
What Challenges Do Users Face When Protecting Their Online Privacy?
One of the main challenges consumers face when protecting their online privacy is a lack of trust between themselves and the company they interact with. However, many tools are available to consumers to help protect their online privacy. These include built-in cookie blockers, ad-blocking software, and incognito browsers.
According to Neeva.com, risks to data privacy include:
Lack of transparency: It is only possible to know whether your information is kept private if you know exactly how it is used, stored, or shared.
Impenetrable privacy policies: Most websites have a privacy statement at the bottom of specific pages. Many of these policies require additional reading time since they are so lengthy and full of jargon. As a result, you might consent to practices that breach your privacy.
Ad-supported business models: The majority of free services on the Internet are ad-supported. This creates an inherent conflict of interest between user privacy and monetization since users' data benefits advertisers.
Tips for Implementing Data Privacy and Data Security When Working Online
One of the most talked-about aspects of the new normal of working from home is the topic of data security for remote workers. Simply put, most public and private connections are not as safe or secure as businesses' encrypted network systems.
By following these tips, you can enhance your security and privacy when working remotely:
Use a virtual private network (VPN) to encrypt your internet connection.
Use strong and unique passwords for all accounts and enable two-factor authentication.
Be cautious when clicking on links or opening attachments from unknown sources.
Keep your computer and mobile devices up to date with the latest security updates and patches.
Use anti-virus and anti-malware software to protect against malicious software.
Only use secure and reputable cloud service providers to store sensitive data.
Use a firewall to protect your computer or network from unauthorized access.
Be aware of phishing attempts and avoid sharing personal information online.
Keep an eye on your account activity and be on the lookout for any suspicious activity.
Monitor your network activity and use intrusion detection software to detect and respond to potential threats.
What Are the Laws That Govern Data Privacy?
In the United States, various laws regulate data privacy. Some of the laws are federal, while others are state-specific. The California Consumer Privacy Act and California's Privacy Rights Act (CPRA) are examples. Other states have laws that regulate online businesses, like the Maryland Online Consumer Protection Act (OMCPA).
Federal Trade Commission
The Federal Trade Commission (FTC) is a privacy authority. It recommends privacy-by-design practices, which implement reasonable limitations on how long companies keep data. For example, data may only be retained for a reasonable time if it is no longer needed for a legitimate purpose.
The Federal Trade Commission has several laws to protect the privacy of your personal information. These laws govern data use in commercial activities and restrict companies from selling or using this data for non-essential purposes. They also give you the right to access and correct the information companies collect about you.
The FTC is exploring new laws to address the misuse of personal information through commercial surveillance. Its Advanced Notice of Proposed Rulemaking, or ANPR, opens a 60-day public consultation period during which the FTC will collect public comments about the harms of commercial surveillance and the need for new rules to protect your privacy.
California Privacy Rights Act (CPRA)
In California, a new data privacy law is called the California Privacy Rights Act (CPRA). The CPRA remodels the CCPA, adding additional traffic regulations and new end-user safeguards. Unlike other states, where data privacy laws are often inconsistent, California has a single law that governs data privacy.
The CPRA allows consumers to limit how businesses use their personal information. They can ask companies to delete or restrict the use of their data or to stop using it to make decisions about them.
They also have a right to be informed before collecting this information and can request notification at the collection point. In addition, businesses are not permitted to discriminate against California residents who exercise their rights under the CPRA.
American Data Privacy Protection Act (ADPPA)
The American Data Privacy Protection Act (ADPPA), recently introduced in Congress, would give individuals certain privacy rights. These rights include accessing, correcting, and deleting covered personal information. It would also require that companies maintain oversight over data privacy practices, which would apply to data collected by businesses, government agencies, and even individuals.
The ADPPA is a bipartisan effort to protect the privacy of American consumers. It includes considerations for third-party collecting entities and additional privacy protections for children under 17. Additionally, the ADPPA would establish a delayed private right of action for consumers when companies violate their privacy. Although it is unlikely to pass this year, the act could be adopted.
Maryland Online Consumer Protection Act
The Maryland Online Consumer Protection Act (PIPA) protects Maryland residents' personal information from unauthorized access and misuse. The law requires businesses to provide consumers with notice and choice regarding the use of their personal information and to take reasonable steps to keep the data secure. Violators of these laws face severe penalties.
Maryland has expanded its data privacy law to cover more businesses. Under the law, a company that collects personal information must notify the individual who was impacted by a security breach and immediately take the necessary steps to prevent any further misuse.
How Can I Make Sure I Comply with Data Privacy Laws?
Effective management of privacy requires the right people and processes. Privacy technology cannot make an organization compliant overnight, and privacy policies alone cannot address all privacy concerns. Instead, organizations must create a privacy culture and assemble a team of privacy specialists who know the law and the details of an operational compliance program.
Many privacy laws have many requirements, and the rules are constantly changing. Businesses must prioritize them based on their resources, business focus, and risk profile. Fortunately, there is a new resource to help companies navigate these complex laws. The Determann Field Guide to Data Privacy Law provides a concise and helpful overview of privacy law worldwide. It also includes practical tips and helpful suggestions for achieving compliance.
Even with the GDPR in place, it is hard for companies outside the EU to comply with all the requirements. As GDPR prohibits the transfer of personal data to third parties, a company must comply with EU laws to keep the data in its possession. GDPR also requires a company to keep records of processing activities, separate justifications, and a breach notification to the EU's data protection authority. Compliance with GDPR requires many resources and is very complex.
There are several legal obligations for people and companies regarding data privacy. These obligations include the minimization of data and the accurate and timely provision of personal data. They also require that personal data be kept for no longer than is necessary for the purposes for which it was collected. Furthermore, they must maintain data integrity across formats and time.
Changing privacy laws can be confusing and complicated to navigate. For example, GDPR requires many infrastructure changes, and many organizations may need to learn how to comply.
Fair Information Practices
Also known as the Fair Information Practice Principles (FIPPs), they are important for protecting individual privacy. The Organization for Economic Cooperation and Development (OECD) published them in 1980, and many countries generally agreed with them. Many organizations use them as guidelines for how to handle personal data.
The electronic marketplace has made it more critical than ever to ensure that businesses operate within these laws. They represent the consumer's right to privacy and protect online consumers' interests.
The Eight Fair Information Practice Principles
1) The Collection Limitation Principle: There should be limits to the collection of personal data, and any such data should be obtained by lawful and fair means and, where appropriate, with the knowledge or consent of the data subject.
2) The Data Quality Principle: Personal data should be relevant to the purposes for which they are to be used and, to the extent necessary, should be accurate, complete, and kept up-to-date.
3) The Purpose Specification Principle: The purposes for collecting personal data should be specified during data collection. The subsequent use is limited to fulfilling those purposes or others as long as they are not incompatible with those purposes and are set on each occasion of change of purpose.
4) The Use Limitation Principle: Personal data should not be disclosed, made available, or otherwise used for purposes other than those specified, except a) with the consent of the data subject or b) by the authority of law.
5) The Security Safeguards Principle: Personal data should be protected by reasonable security safeguards against such risks as loss or unauthorized access, destruction, use, modification, or disclosure of data.
6) The Openness Principle: There should be a general policy of openness about developments, practices, and procedures concerning personal data. Means should be readily available for establishing the existence and nature of personal data and the primary purposes of their use, as well as the identity and usual residence of the data controller.
7) The Individual Participation Principle: An individual should have the right:
a) to obtain from a data controller, or otherwise, confirmation of whether or not the data controller has data relating to them;
b) to have data relating to them communicated to them within a reasonable time, at a charge, if any, that is not excessive, in a reasonable manner, and in a readily intelligible form.
c) to be given reasons if a request made under subparagraphs (a) and (b) is denied and to be able to challenge such denial; and
d) to challenge data relating to them and, if the challenge is successful, to have the data erased, rectified, completed, or amended;
The Accountability Principle: A data controller should be accountable for complying with measures that affect the principles stated above.
What Are Some Examples of Data Privacy Risks?
A company data system breach could reveal sensitive, confidential information. A breach at a hospital or school could give access to personal identification information; a breach in financial institutions can affect consumer data; and a breach in a government institution can even reveal the top secrets of a nation.
Companies are also required by law to protect personal information. This means taking internal measures and making efforts to de-identify data. Companies must understand data privacy's legal, logistical, and ethical foundations to protect their information.
Lack of Encryption
Data privacy risks are a real issue in the modern business world. Most breaches involve end-user negligence, but they can also occur through technical misconfigurations. Data that is not encrypted represents a goldmine for hackers. Not only does it put your organization at risk financially, but it can also affect your reputation.
Social engineering is a cyberattack that targets vulnerable people on the Internet. These social engineers may use their skills to trick their victims into divulging critical information about their identities.
Organizations should implement solid policies and procedures to limit the impact of such attacks. Regular risk assessments and good threat intelligence will help organizations identify and respond to attacks on their networks and personal data.
One example of social engineering is the RSA data breach, which occurred in 2011. Hackers sent phishing emails to groups of RSA employees, posing as customer service executives or technical experts, to obtain personal and sensitive information.
The emails included an Excel file containing malicious code that installed a backdoor through a vulnerability in Adobe Flash. Although hackers never disclosed precisely what information they were after, RSA could recover from the attack and regain complete control of its computer systems.
What Are The Compensation Costs Associated With a Data Breach?
When a data breach occurs, the compensation costs can be staggering. The charges can be incurred in the immediate aftermath and even years later when regulatory fines are levied and lost sales are accounted for. T-Mobile, for example, recently paid out $500 million to settle a class action lawsuit following a data breach in 2013.
Data breach costs include lost revenue and customer turnover. Nearly 40% of the average total cost of a data breach is related to lost business. This amount can be higher for industries with higher regulated standards, such as healthcare and financial services. Companies also incur legal fees, advertising costs, and customer reporting costs. These costs can cripple a midsize organization.
Data Security Technology
Tools and regulations for data protection are available to limit access to the data. Companies must take steps to protect sensitive user data, and compliance requirements help ensure that users' privacy requests are honored by businesses. However, users can also employ practices to safeguard their data's security.
These are the most common methods to protect data:
1. Firewalls: They are made to prevent unauthorized sources from getting access to corporate data. A firewall acts as a bridge between a private or business network and the open Internet. Firewalls prevent malware and other unauthorized traffic from connecting to devices on a network by using pre-configured rules to check all packets entering and leaving the network.
2. Data encryption: To secure data at rest and transmitted between authorized parties, it is encrypted into coded ciphertext. Encrypting data may ensure that only individuals with the proper decryption key can read the information in its original plaintext form. In the hands of attackers, encrypted data is useless.
3. Data masking: It hides data so thieves cannot understand what they have taken, even if they exfiltrate it. Contrary to encryption, which stores the information using encryption methods, data masking involves swapping out accurate information for identically false information. The business can also use this information when utilizing real data, such as software testing or user training, which is unnecessary.
4. Backup: Make copies of the data and store them independently, enabling later data restoration in the event of loss or alteration. If the original data is lost, damaged, or destroyed—intentionally or unintentionally—backups are crucial for maintaining business operations.
5. Authentication and authorization: These controls support credential verification and guarantee that user privileges are appropriately applied. Role-based access controls often use these precautions as part of an identity and access management (IAM) solution (RBAC).
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