Data Protection Laws : Is your business compliant ?

Did you know over the past 10 years, there have been 300 data breaches involving the theft of 100,000 or more records? 71% of these breaches were financially motivated. Data Breach can cause losses worth millions of dollars to your business if you do not do the good part of protecting your customer’s data.

Data Protection Laws or Data Compliances are primarily applicable to all businesses that are into selling and storing personal information of citizens locally or across the globe.

What is Data Protection?

“If you fail to protect your customers’ privacy, you might lose every customer you ever acquired”

Did you know that more than 1.6 million people across the globe buy goods and services online on a daily basis? In the process, they are letting out personal information like address, email id, bank details and much more. This data, if not protected well, can get lost, stolen or misused. It is the responsibility of every company to protect this data and guard it against any kind of breach.

Data compliance or Data protection refers to any regulation that a business must adhere to or follow in order to ensure the protection of any sensitive digital data like personally identifiable information and guard against breaches.

What is Data Protection Laws?

Data breaches can cause companies significant damage to their brand image and bring along heavy penalties resulting in huge losses. This is where Data Protection laws come into the scene. These laws are necessary to ensure fair and consumer-friendly commerce. Apart from general data protection rules that every business should be aware of, there are certain international privacy laws that every company should comply with when running a business in the digital world.

International Privacy Laws

GDPR – General Data Protection Regulation

The European Union’s regulation or comprehensive data privacy law, GDPR, is applicable to all companies selling or storing information about European citizens. It doesn’t just apply to companies based in Europe but also includes companies on other continents who are working directly with individuals in the EU’s jurisdiction. The regulation gives individuals of the EU , complete control of how their personal data is collected, stored and handled. GDPR protects EU citizens through this law and non- compliance or data breach can attract heavy penalties.

Simply put, if your business website is dealing with EU citizens then you must comply with the laws of GDPR to save your business from huge penalties.

COPPA – Children’s Online Privacy Protection Act

If your business website has a target audience below 13 years of age, then this law is applicable to you. Children’s Online Privacy Protection Act will not allow your site to collect any personal information from children under the age of 13. If your business is about selling a product or service to a young audience, then you must comply with this law.

CCPA-California Consumer Privacy Act

California’s equivalent of GDPR, CCPA is one of the toughest laws of consumer protection that businesses face and applies to businesses involved in collecting personal information of California residents. CCPA compliance is applicable to most medium and large size companies that have gross annual revenues above $25 million; those that buy, receive or sell the personal information of 50,000 or more consumers or businesses that derive 50% or more of their annual revenue from selling the personal information of residents in California.

CCPA gives the right to the consumers to be informed of all the data that the business collects; the right to ask for the deletion of data or be informed from where the data was acquired or shared. Under this act, consumers can rightly ask the business the reason for collecting their personal information and take legal actions if the company fails to take the necessary steps to protect their data.

Penalties for non-compliance are extremely high.

LGPD-Brazilian General Data Protection Act

Drawn on the lines of GDPR, the Brazilian General Data Protection Act has been in effect since February 2020 and applies to any business or organization that processes the personal data of people in Brazil, irrespective of where the business or organization might be located. The rights that data subjects have as part of the LGPD Act include the right to access the data, correct incomplete or outdated data, delete personal data and the right to revoke consent to name a few. Penalty system for non-compliance with LGPD ranges from warnings to fines up to 2% of annual turnover in Brazil.

Don’t overlook these rules for your business online

Besides knowing all about the data protection laws that your business needs to comply with, it is also important to understand a few more basic rules for doing an online business. Knowing these ahead of launching your website for sales will save you from unwanted obstacles in the future.

Taxation: Every state or country has different tax expectations based on the type of goods or service you are selling. It is important to know your target demography and understand their tax laws that may affect your product or business and work in compliance.

Shipping restrictions: Shipping companies have their set of restrictions on products that they can ship locally or internationally. It is always a good option to have a clear understanding of these restrictions and have the right paperwork in place.

Brand Legality: Depending on the product or service you want to sell, it is necessary to apply a trademark, patent or copyright on your product or business to prevent infringement into other businesses and subsequent legal hassles.

Payment Gateways: When evaluating options for payment gateways for your website, be sure to check with their restrictions pertaining to certain products as well as their fees. It is essential to comply with PCI-DSS (Payment card industry data security standard) to avoid irreversible damage to your business.

Business License: Your business may be on the cloud but you would still require a business license or permit depending on your state and local laws. Get this in place before you increase your sales to maintain business authenticity and prevent cease on operations.

How to ensure your business adheres to these compliances?

Determine the regulations that apply to your business

Stay abreast of regulatory changes and work with internal data privacy experts or legal experts to help you determine which compliances are applicable to your business and hence your website.

Establish a data privacy policy

  • Determine what data you need to collect from users and how your business would use the data
  • Determine the sensitivity of the collected data
  • Determine how your revenue model will utilize this consumer data
  • Put in place security measures to ensure only relevant teams have access to this data
  • Ensure all the services you use for your website to adhere or comply with data protection policies
  • Put procedures in place to handle scenarios where user consent is required to acquire data, the user wants to avail service without revealing personal information and so on and so forth
  • Conduct dedicated regular internal audits to audit your compliance process to prevent disasters like a data breach

Violating rules or laws pertaining to running a business online can land your business website in a soup. It is a good business practice to maintain a document on your website that can clearly talk about your business compliance policies and create transparency with your users. This can help build a lasting trust with your customers.

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