Data Compliance for International Digital Enterprises: Five Things To Know

Regardless of the online channel used to communicate with consumers, you often need to leverage personal data to generate revenue. Effective marketing campaigns may require consumers' sensitive information to deliver personalized messages. Such information may involve addresses, phone numbers, or email addresses. Naturally, the sensitive nature of this data worries consumers as they fear their data will be misused. 

To regulate the use of personal information, governments require strict data compliance laws. Yet, not all data compliance laws are the same. To begin with, different laws have different definitions of data privacy. More often than not, these definitions are region or country-specific. Given these variations, you have to know which data privacy laws apply to you if you’re an international business.

To help you navigate these differences, this article will delve into data compliance, how data compliance laws differ, and what you need to know about the privacy laws that apply to you.

What Is Data Compliance?

Data compliance laws aim to protect sensitive data from misuse, loss, or theft to protect both you and your customers. These laws dictate how you manage users’ online information, stipulating how data should be organized, collected, and stored. 

Why Is Data Compliance Important?

Data compliance builds consumer trust and increases sales. According to a survey by IBM, 78% of consumers deem a company's ability to keep their data private very important. Meanwhile, 77% of respondents factor in whether a company can keep their information safe in their purchase decision.

Beyond generating a positive perception of your brand, data compliance can reduce costs. A study by IBM and the Ponemon Institute revealed that data breaches result in an average loss of $3.86 million. This loss results from the harm done to personally identifiable information (PII), as PII is one of the most expensive information losses you can incur as a business.

Global Privacy Principles

Despite the variety of data compliance legislations worldwide, there are several things all privacy laws have in common. These principles involve:

1. Notifying users: all users, visitors, and readers should be advised to read the privacy policies stipulated by a business.

2. Choice and consent: all users choose whether they want a business to use their data or not. If they approve, explicit consent of some form is required.

3. Organized access: businesses should only allow certain personnel to access users’ information.

4. Security: companies should store data in a way that forbids unauthorized access.

5. Enforcement: data privacy laws are imposed on businesses. This ensures that companies have to comply with regulations.

Differences in International Data Compliance Laws

Despite these overarching commonalities, there are no standard privacy laws that all global businesses must follow. Regulations regarding personal data vary depending on where your company operates. For example, the EU enforces GDPR (General Data Protection Regulation), Canada imposes PIPEDA (Personal Information Protection and Electronic Documents Act), and California applies CCPA (California Consumer Privacy Act). These laws differ in how they view data gathering, data processing, and non-compliant use of data, amongst other things.

Obtaining Data

• EU (GDPR): GDPR laws refer to data subjects as an "identified or identifiable natural person." These people have to be EU residents or reside within the EU to be protected. Moreover, GDPR requires all EU organizations to protect users' information, irrespective of whether they are for-profit organizations or not.

• Canada (PIPEDA): PIPEDA accounts for all "information about an identifiable individual" obtained through commercial activity. Any private, for-profit company in Canada that collects personal information has to follow PIPEDA regulations.

• California (CCPA): A consumer protected under CCPA regulation is a "natural person who is a California resident." Moreover, CCPA only accounts for for-profit organizations based in California. Yet, not all Californian organizations have to abide by CCPA. Californian organizations only have to follow CCPA if yearly revenues surpass $25 million and derive more than 50% of these revenues from personal data.

Data Contents and Data Processing

• EU (GDPR): The EU's GDPR rules apply to the "processing of personal data." However, these rules don't include data processing handled by non-automated tools or done for personal purposes.

• Canada (PIPEDA): PIPEDA doesn't apply to all personal data. For example, data handled by governmental organizations and information related to business contacts isn't accounted for. Moreover, PIPEDA doesn't cover data collected individually, nor does it cover data gathered for personal or artistic use.

• California (CCPA): CCPA law excludes certain types of data from its regulation. Medical information, information collected as part of a medical trial, and information exchanges between consumer reporting agencies are excluded from CCPA.

Fines and Penalties

• EU (GDPR): A lack of data protection under GDPR law is subject to hefty fines. Depending on the violation, the penalty is 4% of the entity's global annual turnover, or €20 million, depending on which one is higher.

• Canada (PIPEDA): Penalties with PIPEDA can reach up to $100,000 for each violation.

• California (CCPA): Under CCPA, non-compliance can result in $2,500 per violation and $7,500 for an intentional violation.

Things You Need to Know About Privacy Laws

As exemplified above, data protection laws differ depending on where your business is operating. These various laws can make it challenging to know precisely which rules apply to your business. While these laws seem complex and convoluted, there are five key questions you need to answer to help you navigate these regulations. These questions reveal the most important things you need to know about your regional privacy laws.

1. What Laws Apply to Who?

Before extensively abiding by specific laws, address which rules apply to you. To do this, note where your business operates, where your users or consumers live, what type of organization you are, and whether a minimum income level is essential. Answering these questions should give you an idea of which laws apply to your business.

2. What Data Do Privacy Laws Cover?

It's important to know what type of data your regional privacy laws regulate. Different privacy laws have different definitions of what constitutes 'personal information.' For example, while PIPEDA classifies income and blood type as personal information, GDPR does not. Therefore, you need to have a close look at what data these laws cover.

3. How Is Consent Obtained?

While data compliance laws need user consent, how you receive this consent can vary from law to law. For example, some privacy laws need overt user consent, while others only need implied permission. Knowing what consent requirements apply to you can help you address users accordingly.

4. What Does Non-Compliance Mean For Your Business?

When breaking down what you need to do to comply with data privacy laws, you also have to address what non-compliance looks like. Additionally, you have to become aware of what the consequences of non-compliance are.

To understand these better, research into the factors that contribute to non-compliance. Aspects such as the gravity of the situation, intentionality, and damage mitigation can significantly impact fines.

5. How Do You Notify Breaches?

Depending on the data compliance law, there are different requirements for notifying data breaches. For example, conditions may detail specific ways you should send notifications, the time window for reporting a violation, and the appropriate recipients of these notifications. Knowing these will provide you with the necessary steps for addressing a data breach.

In Conclusion

As an international business, the jurisdiction you work in has various implications for handling your data. With an increasing number of cross-border data transfers, it's essential to look into relevant data laws in your jurisdiction. Additionally, you have to make sure you are up to date with current legislation. By acknowledging ongoing changes in data laws, you avoid the possibility of breaking them. As such, you are ensuring that both you and your consumers are protected against the consequences of data breaches.

Eager to reach your target customers in an effective and data-compliant way? Chat with our team to see how iwinBACK can help!