Why Privacy is a Corporate Responsibility IssueAs GDPR and its hefty fines loom, it is time for organizations to really look at their privacy policies. You can't just cut and paste the language from a template anymore.
Many organizations have Corporate Responsibility programs that focus on social issues and philanthropy. Especially in today's Big Data era, why is privacy not part of the program?
Today's companies are promising to lower their carbon footprints and save endangered species. They're donating to people in developing countries who have far less than we do, which is also noble. But what about the fact that American citizens are a product whose information is bought, sold, and obtained without consent? In light of recent events, perhaps the privacy policies deserve more consideration than just two linked words at the bottom of a website home page.
Problems with Privacy Policies
There are three big problems with privacy policies, at least in the US: what's in them, how they're written, and how they're ignored.
Oh, and what's stated in the documents may or may not be true, either because the company changed the policy since you last read it or they're ignoring the document itself.
"After May 2018 when the new GDPR [General Data Protection Regulation] goes into effect, it's going to force many companies to look at their privacy policies. their privacy statements and consents and make them more transparent," said Sheila Fitzpatrick, Data Governance & Privacy counsel and chief privacy officer at data services for hybrid cloud company NetApp. "They're going to have to be easily understandable and readable."
Businesses Confuse Privacy with Security
Privacy and security go hand-in-hand, but they're not the same thing. However, the assumption is, if you're encrypting data then you're protecting privacy.
"Every company focuses on risk, export control trade compliance, security, but rarely you find companies focused on privacy," said Fitzpatrick. "That's changing with GDPR because it's extraterritorial. It's forcing companies to start really addressing areas around privacy."
It's entirely possible to have all kinds of security and still not address privacy issues. OK, so the data is being locked down, but are you legally allowed to have it in the first place? Perhaps not.
"Before you lock down that data, you need the legal right to have it," said Fitzpatrick. "That's the part that organizations still aren't comprehending because they think they need the data to manage the relationship. In the past organizations thought they need the data to manage employment, customer or prospect relationships, but they were never really transparent about what they're doing with that data, and they haven't obtained the consent from the individual."
In the US the default is opt-in. In countries that have restrictive privacy policies, the default is opt-out.
The Data Lake Mentality Problem
We hear a lot about data lakes and data swamps. In a lot of cases, companies are just throwing every piece of data into a data lake, hoping it will have value in the future. After all, cloud storage is dirt cheap.
"Companies need to think about the data they absolutely need to support a relationship. If they're an organization that designs technology, what problem are they trying to solve and what data do they need to solve the problem?" said Fitzpatrick.
Instead of collecting massive amounts of information that's totally irrelevant, they should consider data minimization if they want to lower privacy-related risks and comply with the EU's GDPR.
"Companies also need to think about how long are they're maintaining this data because they have a tendency to want to keep data forever even if it has no value," said Fitzpatrick. "Under data protection laws, not just the GDPR, data should only be maintained for the purpose it was given and only for the time period for which it was relevant."
The Effect of GDPR
Under the GDPR, consent has to be freely given, not forced or implied. That means companies can't pre-check an opt-in box or force people to trade personal data for the use or continued use of a service.
"Some data is needed. If you're buying a new car they need financial information, but they'd only be using it for the purpose of the purchase, not 19 other things they want to use it for including sales and marketing purposes," said Fitzpatrick.
Privacy may well become the new competitive advantage as people become more aware of privacy policies and what they mean and don't mean.
"Especially Europeans, Canadians, and those who live in Asia-Pacific countries that have restrictive privacy laws, part of their vetting process will be looking at your privacy program," said Fitzpatrick. "If you have a strong privacy program and can answer a privacy question with a privacy answer as opposed to answering a privacy question with a security answer, [you'll have an advantage]."
On the flip side, sanctions from international countries can destroy a company from reputational, brand and financial points of view. The sanction under the new GDPR regulation can be as high as 4% of a company's annual turnover.
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