Protecting User Data: Privacy and Security Regulations

Data Compliance Is Essential

As data breaches continue to make headlines, businesses are more aware than ever of the importance of data privacy and security.

Every day, businesses are collecting and storing more and more sensitive data. And, if data falls into the wrong hands, it can be used to do a lot of damage. That's why it's so important for businesses to understand the various data privacy and security regulations that are in place.

Let’s discuss some of the most important data privacy and security regulations: PCI DSS, GDPR, and CCPA, how they differ, and what businesses need to do to comply with them.

Why Do We Need Privacy Acts?

People used to keep their most valuable things in physical safes and vaults. Today's data is stored in the cloud or on devices. Depending on the type of data it is and how it’s stored, it may be more or less available to others with a computer-literate background.

And data that are available are often readily distributed or sold to others with or without our consent. Such data are often collected using website tracking, and include things like website behavior, your IP address, and the browser you’re using.

Oftentimes, these data collection methods are used to make things more convenient for people.

For example, when you search for grocery stores in your area, the search engine can use your IP address to determine your approximate location and give you more relevant results.

If you see a list of recommended products on an eCommerce platform, that’s because it knows what you’ve bought or viewed on that website before, so it can form a list of related products.

This added convenience makes you more likely to continue using the service and interact with the website and marketing attempts. If businesses know how you interact with their website, they can personalize the content so it’s more useful to you.

However, issues arise when companies aren’t forthcoming about the data they collect, how they use that data, and who else has access to it.

There are often many third-party trackers within webpages that users are not aware of. These can track browsing history, how you interact with their emails, what links you click on, your time zone, the device you’re using, and much more. Businesses can also sell your data to other companies.

This data tracking is used to send you targeted ads, and it’s debatable how useful some of these targeted ads really are for end users. But regardless, the fact of the matter is that these unknown entities gather information that people may not want them to have, and it’s taken without our knowledge or consent.

So while there are useful features that data tracking offers, and to some degree tracking is expected (such as when your Netflix account displays recommended shows based on what you’ve watched before), there needs to be a limitation in who can access our data and what data they can collect.

Data privacy and security regulations, or privacy acts, are designed to limit access to data and prevent abuse of personal information.

If your business collects data from users, it’s vital that you understand and comply with data privacy and security regulations to respect and safeguard your users’ data. Being transparent about your privacy terms also helps build trust with customers, which is an important component of customer loyalty.

Data Privacy and Security Regulations

Here are the most important data privacy and security regulations you need to know.

GDPR

The European Union's general data protection regulation is a sweeping privacy act approved in April 2016 and enforced in May 2018. It grants European Union citizens control over their data stored by different organizations.

GDPR doesn't only protect your name, address, picture, payment information, and IP address. Besides that, there are 99 separate articles under GDPR.

Below are the four most important articles:

• You need to notify your users of a data breach within three days (72 hours)
• You need users' permission before collecting their data without using hidden clauses or complex legal terms.
• At each user request, you need to explain to users the information you are collecting, how you will use it, and with whom you will share it.
• You must erase past collected information at each user's request.

The breadth of GDPR's reach sets it apart from previous privacy laws. Unlike those in the past, the EU's data protection regulations apply to all EU citizens no matter where they reside or do business. This means that GDPR applies to eCommerce businesses in the United States that do business with or sell to Europeans.

Such a wide regulation would harm many company models, but that's the goal. The creators of GDPR believe that secretly gathering, sharing, and monetizing personal data should not be a viable business strategy. With many additional countries—from Canada to Argentina to Australia—enacting their own versions of GDPR, this message is already spreading far.

CCPA

The California Consumer Privacy Act of 2018 (CCPA) is a data privacy law that gives California residents the right to know what personal information businesses collect about them, how it is used, and with whom it is shared.

The CCPA also gives Californians the right to delete their personal information upon request. This act became effective on January 01, 2020.

The CCPA applies to any business that:

• Collects personal information from California consumers.
• Does business in the state of California.
• Has annual gross revenues over $25 million.
• Annually buys, receives for commercial purposes, and sells products or services.

The law also applies to any business that sells personal information, regardless of its size or revenue. Under the CCPA, personal information is defined as any information used to identify a consumer. It includes names, addresses, IP addresses, cookies, email addresses, and more.

Rather than targeting all firms for collecting personal information, the CCPA focuses on the worst offenders (i.e., Facebook, Amazon, and Google). These businesses must disclose the types of personal information they collect and the purposes for which it is used.

They must also identify the categories of third parties with whom they share this information and any consumer rights that have been waived. Californians will be able to file a complaint if they feel their rights have been violated.

PCI DSS

The PCI DSS is a set of security standards to protect cardholder information. It was created by major credit card companies (Visa, MasterCard, American Express, Discover, and JCB) to help businesses securely accept and process credit card payments.

PCI DSS applies to any business that accepts, stores, or transmits credit card data. It includes online businesses, brick-and-mortar stores, and mail order/telephone order businesses. PCI DSS is not a law but rather a set of security standards that must be followed by businesses that accept credit card payments.

PCI DSS is made up of 12 requirements, divided into six security objectives:

• Build and Maintain a Secure Network
• Maintain a Vulnerability Management Program
• Apply Access Control Measures
• Monitor and Test Networks
• Maintain an Information Security Policy
• Protect Cardholder information

PCI DSS compliance is required by all businesses that accept credit card payments. Failure to comply can result in hefty fines from the credit card companies, as well as a loss of the ability to accept credit card payments.

PCI DSS compliance is not a one-time event; it is an ongoing process. Businesses must continually monitor their networks for vulnerabilities and implement security updates as new threats emerge.

What Do Data Privacy and Security Regulations Mean for Your Business?

You didn't go into business to deal with the mysterious world of privacy regulations; you went in to sell items and services to consumers. However, noncompliance has a steep price tag.

For example, under the current GDPR framework, fines can be as high as four percent of the offending firm's worldwide revenue for that year.

All of these data security and protection regulations aim to give businesses and consumers a better understanding of how their personal data is being used and shared. These regulations also give consumers the right to delete or protect their personal information upon request.

If you are a business owner, it’s important to familiarize yourself with these regulations and take steps to ensure your business is compliant. For situations like these, it’s best to work with experts so you don’t have to worry.

That’s where Clarity can help. Our eCommerce platform and integration solutions will make sure your business is data compliant, even as technology and data tracking methods continue to evolve.

Related Articles to Explore

• Have Reliable Auction eCommerce
• B2B Data Insights with eCommerce Integrations
• How Marketplace Innovations Will Benefit Your Company
• ACH Hold, Transfer, and Transaction Time
• How Custom Website Design Helps You Win Customers