As organizations collect an ever-growing amount of data, governments have begun taking major steps to protect consumer data privacy. The need for robust data privacy measures has been reflected in a wide range of recent laws and regulations, which strike a delicate balance between protecting individual rights and facilitating economic growth.
The result is a complex landscape with a number of overlapping data protection laws. From France to Florida, Croatia to California, consumer data privacy is now highly regulated — and highly complicated. For businesses, this means an ever-evolving set of compliance requirements.
In this blog post, we dive into the data privacy compliance landscape, exploring the most important reasons for staying up to date with regulations and summarizing some of the most important data privacy laws.
As companies grapple with mounting pressures to safeguard sensitive information, it’s crucial that they understand the intricacies of data protection laws, the role of regulatory bodies, and the penalties for noncompliance as well as the rewards of strong data privacy policies.
Avoiding fines and civil suits is perhaps the most obvious reason to stay well apprised of changes in data privacy laws. Financial penalties can be steep, with violations assessed at up to 2% or 5% of the offending organization’s annual global revenue under several major data protection laws. Actual fines have topped €1.2 billion under the EU’s General Data Protection Law and €1.1 billion under China’s Personal Information Protection Law.
Safeguarding sensitive data is another key reason why regulatory compliance for data privacy matters. Personal information like financial account numbers, healthcare records, and even email addresses can hold significant value, and unauthorized access to this data can lead to identity theft, financial fraud, and other severe consequences. Compliance with data privacy regulations is one of the best ways for organizations to reduce the risk of these consequences.
Which leads to the final reason that data privacy compliance is crucial: maintaining a good reputation. By demonstrating a commitment to compliance standards, organizations signal to their customers, partners, and other stakeholders that they take data protection seriously. Building customer trust has real financial payoffs, too: One Ponemon Institute survey of global data breaches estimated the cost of reputational damage at $1.57 million per incident.
It’s clear that data privacy compliance is essential. But what does it actually entail in different jurisdictions? Below, we’ll discuss several of the most important data privacy regulations in the global landscape.
The European Union’s General Data Protection Regulation (GDPR) is one of the most notable and stringent data privacy laws in the world. Adopted in 2016, it gives EU individuals greater control over their personal information.
The regulation also unifies the data privacy practices of all EU member countries and provides expanded rights and protection to individuals. To do so, the GDPR mandates specific data handling practices from organizations, including:
Understanding and remaining compliant with the GDPR is essential for many organizations, as even companies outside the EU may be subject to its requirements. On the bright side, adhering to the GDPR’s foundational principles of privacy by design and data minimization can help organizations be more proactive in their approach to data protection and more prepared for compliance with similar laws.
Unlike the EU, the United States lacks a comprehensive federal data protection law. Its closest attempt, the American Data Privacy and Protection Act, would have echoed several key provisions of the GDPR. It would have given consumers the right to access, correct, and delete their personal data. It also would have strengthened individuals’ control over their own data by requiring universal opt-out mechanisms and “do not collect” mechanisms, and it would have required companies to adopt robust data minimization and data security practices.
Still, the United States isn’t entirely lacking in data protection laws. Below are three key pieces of federal legislation that govern data processing practices around specific types of data and for specific types of organizations.
HIPAA. The Health Insurance Portability and Accountability Act safeguards sensitive health information to preserve the privacy and security of individuals’ medical data. Specifically, it regulates the use and disclosure of Protected Health Information (PHI), which includes a broad range of data: medical records, treatment history, billing information, and health insurance details. HIPAA ensures data privacy by establishing strict standards for the handling of PHI, requiring covered entities to implement strong data security measures, notify individuals in the event of a breach, and obtain patient consent before sharing data.
FERPA. The Family Educational Rights and Privacy Act is designed to protect the privacy of student records in the United States. The law applies to all educational institutions that receive federal funding and governs the handling of personally identifiable information (PII) within educational records, including grades, transcripts, and attendance records. FERPA ensures data privacy by granting students and their parents the right to control the disclosure of their education records as well as request corrections to inaccurate information. It also prohibits educational institutions from sharing students’ records without explicit consent.
GLBA. The Gramm-Leach-Bliley Act works to safeguard the privacy and security of US consumers’ financial information — specifically, nonpublic personal information (NPI) related to financial transactions. Under the GLBA, financial institutions like banks, credit unions, and insurance companies are required to maintain comprehensive information security programs that protect the confidentiality and integrity of customer data. GLBA also mandates that these institutions offer the right to opt-out of certain data sharing practices and provide clear privacy notices explaining how customer information is collected, used, and shared.
In response to the lack of a comprehensive federal data privacy law, 14 out of 50 states in the US have passed their own data privacy legislation. These laws cover at least 40% of the country’s population and, with some exceptions, apply to large companies doing business in that state.
The 14 data privacy laws can generally be sorted into two camps: a) more consumer-friendly laws with provisions like a private right to action and an opt-in consent policy, and b) more business-friendly laws. The Virginia Consumer Data Protection Act and the Utah Consumer Privacy Act fall into the former category; the California Consumer Privacy Act falls into the latter. Below, we’ll explore five of the most notable state data privacy laws.
California. Passed in 2018, the California Consumer Privacy Act (CCPA) was the first US state data privacy law. It applies to all companies that earn more than $25 million in gross annual revenue annually and that either process the personal information of 100,000+ consumers or derive more than 50% of their annual revenue from selling or sharing consumers’ personal information. The California Consumer Privacy Act is also one of the few state laws that offers a private right of action, making it one of the most consumer-friendly pieces of legislation. It was strengthened even further by the California Privacy Rights Act (CPRA), which was voted into place by California residents in 2020.
Colorado. Signed into law in July 2021, the Colorado Privacy Act (CPA) is another consumer-friendly state privacy law. Although it does not have a gross revenue threshold, it applies to businesses that process the personal data of as few as 25,000 Colorado consumers. It also requires organizations to obtain consumers’ consent before processing their sensitive data, and it establishes significant penalties of up to $20,000 per violation. Additionally, the CPA requires that companies’ data protection assessments (DPAs) “thoughtfully consider” the risk posed to individual consumers and to the general public by data processing activities.
Florida. One of the most recent state data privacy acts, the Florida Digital Bill of Rights (FDBR) has a uniquely high threshold for applicability and covers only certain tech giants that generate more than $1 billion in gross annual revenue. Florida’s law is also unique in prohibiting state government entities from contacting social media platforms to remove or moderate content, and in requiring major search engines to disclose how their algorithms operate. As a result, some critics note that, although it does offer some basic individual rights, it is less concerned with consumer data privacy issues than with regulating major tech companies.
Tennessee. Another recent law, the Tennessee Information Protection Act was passed in spring 2023 and is generally quite business-friendly, with no private right of action and a lengthy 60-day cure period. That said, it does still offer consumers the usual rights to access, correct, delete, and obtain copies of their personal data, and it allows them to opt out of data processing for the purposes of sale, profiling, or targeted advertising. Similar to a few other state data privacy laws, the TIPA allows organizations to defend themselves against violations if they maintain a privacy program that conforms to the current privacy framework of the National Institute of Standards and Practices (NIST).
Texas. The Texas Data Privacy and Security Act (TDPSA) stands out for the large shadow it casts. Rather than applying only to businesses above a certain annual revenue threshold or a certain amount of data processing, the TDPSA applies to almost any organization that is not defined as a small business by the United States Small Business Administration (SBA). The law also requires universal opt-out mechanisms, making it surprisingly consumer-friendly.
Whether they’re implementing required opt-out mechanisms or future-proofing their practices against individual consumer lawsuits in private right of action states, businesses will have to remain up to date and compliant with these individual state data privacy laws.
The EU and the US are far from the only governments to implement data privacy regulations. Around the world, 137 out of 194 countries have passed their own data protection laws. Most of these laws require informed consumer consent, strong organizational and technical safeguards, and transparency from data processors — and most can levy multi-million dollar fines.
The Asia-Pacific Economic Cooperation (APEC) has developed a voluntary set of data privacy principles known as the APEC Privacy Framework. Its goal is to promote data privacy while stimulating cross-border trade and economic growth in the APEC region.
Brazil’s General Data Protection Law (LGPD) unified several dozen different Brazilian laws to create a single regulation for the processing of personal data. It is fairly similar to the data protection laws in the EU and California, although it requires the widespread appointment of Data Protection Officers (DPOs) and can create separate guidelines for small businesses and startups.
Canada’s proposed Consumer Privacy Protection Act (CPPA) has not yet been implemented, but it would replace the older Personal Information Protection and Electronic Documents Act (PIPEDA) and raise the standards for privacy protection. Like its counterparts around the world, the CPPA would establish more privacy rights for consumers and create clear rules for how businesses can handle personal information.
China’s Personal Information Protection Law (PIPL) requires businesses to implement privacy notices and conduct data protection impact assessments. It also requires that consumer consent be gained before transferring PII to third parties, cloud service providers, or recipients outside of China.
India’s Digital Personal Data Protection Act (DPDPA) was passed just a few months ago and creates a framework for processing personal data. It has not yet been implemented, and it’s anticipated that supplementary rules will be passed to flesh out the requirements for businesses processing information in India.
Saudi Arabia’s Personal Data Protection Law (PDPL) regulates the processing of personal data and establishes certain individual data privacy rights. Much like other data protection laws, it includes the rights to access, delete, and request copies of information collected by data controllers.
Whether you’re just getting started with regulatory compliance or you’re a seasoned pro, your organization will likely benefit from improving its data privacy and security measures. Your individual compliance program is best decided with a legal expert, but here are a few basic suggestions.
Implement smart frameworks. We might sound like a broken record, but it bears repeating: data minimization and privacy by design are crucial for compliance with most data privacy regulations. Limiting the amount of data that’s collected and stored, as well as proactively implementing data privacy safeguards into a company’s apps and internal processes, goes a long way toward achieving compliance.
Employ cutting-edge technologies. Robust cybersecurity solutions are also essential to maintain data privacy. At minimum, companies should implement strong access controls (including RBAC), end-to-end encryption, and monitoring systems that can identify major threats and vulnerabilities.
Consider ShardSecure. Our platform for data security, privacy, and resilience protects data wherever it resides — in the cloud, on-prem, or in hybrid- and multi-cloud environments. Our innovative, agentless approach to end-to-end encryption provides separation of access from infrastructure admins, cloud service providers, and other unauthorized parties. We also address data sovereignty and residency concerns by letting companies store data in the geographic locations and jurisdictions of their choice to mitigate data transfer risks.
To learn more, visit our resources page or take a look at our other articles on compliance.
How Much is Your Personal Data Worth? | Trend Micro
Calculating the Reputational Cost of Cybersecurity Breaches | Barclay Simpson
Does the GDPR Apply to Companies Outside of the EU? | gdpr.edu
Health Insurance Portability and Accountability Act of 1996 (HIPAA) | CDC
FERPA Summary Page | CA Dept of Education
Gramm-Leach-Bliley Act | Federal Trade Commission
Consumer Privacy Protection Act | Government of Canada