With the help of cookies, trackers, and crawlers, online entities have a greater insight into who we are and what we’re doing on the internet. This is why, even today, we wouldn’t have an ounce of privacy without data protection laws.

Still, is the mere existence of the law enough? How and why do data protection laws protect consumer privacy? How are these laws enforced, and what happens to those who fail to comply? Read more to find out!

1. They exist for a reason

Is the business you’re dealing with disclosing how they’re using your personal information? Data protection laws bind them, so they better be.

Still, why does the law mandate this?

First of all, the law functions on the lowest common denominator. It has to. Otherwise, it would expect every single consumer to possess the knowledge of an average solicitor (which is beyond realistic). Even people who don’t understand all the risks of exposing their data need to have their privacy and autonomy protected.

On the one spectrum, you have people who are not afraid enough (which we’ve discussed in the previous section); however, you also have people who are afraid of everything. These people look over their shoulders when typing in their password, taping over their webcam (even when not using it), and more. They need to know that the law protects them from malicious online parties. Sure, this won’t make them change their habits by 180 degrees, but it will give them peace of mind.

Lastly, consumer relations are such a huge part of our society that it needs to be regulated by law. The rules must be set so everyone has guidelines on addressing this burning topic.

Another thing to remember is that while there are already some active laws, there are different jurisdictions to keep in mind. This is another challenge. For instance, GDPR is supposed to protect EU citizens even when doing business with non-EU-based entities. The same goes for CCPA.

Most importantly, you must acknowledge that while trust is important, having a legal framework is far more reliable.

2. There’s no excuse for avoiding data protection laws

With the growth of the digital world and the fact that almost the entirety of humanity is now online, there’s a constant need for updating data regulations. This is what has made compliances difficult to manage in the past. Still, even when things were more difficult, those with the will always managed to find the way.

With the right tools handling your approach to data protection laws, you no longer have to be a lawyer to keep up with everything. In other words, there are only two excuses why someone is avoiding the practice of abiding by data protection laws:

• They’re malicious
• They’re negligent

Either way, as a consumer, you don’t want to have anything to do with them. Sure, one could argue that some avoid compliance due to a lack of awareness, but this is like running a factory and not knowing that you’re not supposed to pour waste into the local creek.

Others do this to gain a competitive advantage. This means they’re trying to exploit the fact that others are sticking to the law. This is like pocketing higher profit by saving money by not paying your taxes. It may make some sense in the short term, but there’s no scenario where this goes unpunished. Moreover, the punishment will drastically overtake any savings/profit you’ve made this way.

Finally, you could argue that since different regions have different laws, some use this as a loophole. It doesn’t work this way. GDPR is not just for EU-based enterprises. Anyone who does business with parties from the EU (virtually everyone) must abide by them.

3. Minimizing data

Because most data protection laws are so strict, businesses sometimes cannot afford to ask for more than they’re allowed to. This means the amount of personal information they’ll require will be so low that they minimize the risk.

Sure, they may know more about you than you’re comfortable with, but they don’t know it all. They’re limited to the information they need for lawful purposes. Using this data for other purposes is against the law, which is a significant limitation. Even with all your security measures, you cannot lose data you don’t have.

Minimization of data also increases trust. Even in person, you would be suspicious of someone asking too many questions. Therefore, you're being more transparent when you restrict your question on a need-to-know basis and even disclose what information you need (and why you need it) in your terms of services (even though people won’t read them).

While modern document management systems are incredibly potent, handling a smaller amount of data is much easier. Moreover, suppose you restrict the data you’re handling to structured data. In that case, producing any of it on demand or analyzing it in the simplest BI (business intelligence) tools will be easier.

The harm your customers can be exposed to also depends on the nature of the information. With each information you include, there’s another potential way a malicious third party could harm a customer. For instance, there are different things that hackers can do with one’s credit card number and their social security number. While neither of the two is harmless, they’re different. This makes risk assessment more difficult. We’ll talk more about this in the next chapter.

4. Notification about the breach

According to data protection laws, you will always be notified if there’s a breach.

According to GDPR, a data loss could cause a risk to your rights and freedoms as a citizen, which is why you need to be notified as soon as your data is:

• Lost
• Stolen
• Compromised

However, this is not exclusive to GDPR or the EU. These same rules apply according to the CCPA (California Consumer Privacy Act).

Sure, companies invest millions to prevent this, but it won’t always be possible. For you as a consumer, the company in possession of your data must have a contingency plan.

This is incredibly important since, as a customer, you may be using these passwords, emails, and more for other platforms. While this is definitely not smart, it’s a common practice, and you deserve… no, you’re entitled by law to get a notification when your privacy is compromised.

The biggest problem with this concept lies in the criteria that must be met for data to be considered compromised. This is a complex process that involves factors like:

• The sensitivity of data
• The number of affected users
• The potential risk of harm

In other words, the company usually starts by making a risk assessment (to determine if they should notify users). Since this relies on risk assessment (which isn’t 100% accurate) and sometimes even personal judgment, there’s room for error and misinterpretation.

5. Legal consequences

To trust someone, you have to understand their motivation. Due to the existence of data protection laws, customer privacy will always be a priority for most businesses. Why? Mostly because they want to avoid legal consequences.

Right off the bat, if you ignore data protection laws, you risk having lawsuits and legal claims filed against you. If you’ve failed to protect their data, customers can take legal action against your organization.

Then, there are regulatory penalties that you’ll pay. This may be expressed in the percentage of your turnover or a fixed fee per violation. Either way, it’s an unnecessary expense that any serious company would try to avoid.

Also, keep in mind that you may be investigated at any point. If it turns out that you aren’t doing things in compliance with data protection laws, you’ll be in serious trouble, and further investigations may be raised.

This is not where your problems end. In today’s world, all it takes is a single data breach to brand you as an unreliable partner. With all the malicious online activity and everything at stake, people have the right to be afraid. In other words, you’ll suffer significant damage to your reputation after a breach.

Sometimes, there are greater industry-related consequences that you may be facing. For instance, you may face serious sanctions if you’re in the financial industry. In many scenarios, you’ll even revoke your license (perhaps even be blacklisted from working in this field again).

Data protection laws incentivize organizations to protect the privacy of their consumers even harder

First of all, in the age where all our sensitive private data is connected to the internet (via one means or another), data protection laws are essential for the survival of our society. Second, in 2023, it’s so easy to abide by them (via specialized tools and agencies) that there’s no excuse to avoid doing so. Lastly, sticking to data protection laws protects both the consumer and the organization.

About the Author

Veteran content writer, published author, and amateur boxer. Srdjan is a Bachelor of Arts in English Language & Literature and is passionate about technology, pop culture, and self-improvement. His free time he spends reading, watching movies, and playing Super Mario Bros. with his son.