What is data privacy and why is it important?

Published on 4. elokuuta 2023

Data privacy means keeping your personal data to yourself and controlling who you share it with.

From social media to search, shopping, and streaming, we all share vast amounts of personal data daily in the digital economy. As AI becomes integrated into consumer products, we’re set to share loads more.

Data privacy has never been more critical to reduce the risk of identity theft(new window), fraud, and other crimes and abuse. But privacy is also a fundamental right that’s essential to preserve your personal freedom in a democracy.

Learn what data privacy is, why it’s important, the laws and regulations governing it, and ways to protect your personal data online.

Data privacy definition
Why is data privacy important?
What regulations protect data privacy?
The EU’s GDPR
US data privacy laws
Privacy policies
What are the challenges to data privacy?
How to protect your personal data
Protect your business data
Final thoughts

Data privacy definition

Data privacy (also known as information privacy) refers to protecting personal and sensitive data from unauthorized access, disclosure, or misuse, including enabling individuals to control who can access their personal information.

Data privacy is governed by laws and regulations that state how this data should be collected, stored, managed, and shared.

The exact definition of personal data varies depending on specific laws in different countries or regions. But they typically cover any information that relates to an individual, including but not limited to:

Personally identifiable information, such as your name, address, Social Security number, etc.
Obvious confidential information like health records, financial details, criminal records, racial information, and sexual orientation.
Less obvious info like biometric data (like fingerprints or face scans), geolocation data (from your phone), internet usage data, and online identifiers (like IP addresses, cookies, etc).

Why is data privacy important?

Data privacy is vital to protect personal data and uphold freedom in an increasingly interconnected digital world. Here are some reasons why:

Uphold your rights: You have a fundamental right to privacy, as we discuss below. Data privacy laws exist to safeguard your rights.
Protect your personal information: Data privacy is essential to maintain the confidentiality of your sensitive information, like your name, address, financial details, health records, etc.
Beat data breaches: As data breaches are on the rise(new window), your data is increasingly vulnerable. Data privacy measures can protect your personal information from being leaked.
Prevent cyberattacks: Malicious hackers and cybercriminals target personal data for fraud, identity theft(new window), and other crime. By prioritizing data privacy, organizations can stop you from falling victim.
Block Big Tech surveillance: Tech giants like Google and Facebook collect as much personal information about you as possible to target you with ads(new window). Data privacy measures can stop Big Tech from invading your privacy.
Stop harassment: If your personal details are revealed, you can be a target for abuse. Data privacy can shield you from cyberbullying, cyberstalking, and other forms of harassment.
Ensure compliance: Data privacy measures are essential to comply with data protection laws and regulations in different countries.
Maintain trust: Businesses and other organizations rely on trust to function. If they handle our data transparently, we can trust them and use their services.
Defend your civil liberties: In the age of mass government surveillance(new window), data privacy measures can protect you from unwarranted monitoring by government agencies.
Protect freedom: Being able to express your opinion privately and have your own private space without being monitored or censored is vital in a free society. Data privacy is fundamental to maintaining truth and empowering citizens(new window) in a democracy.

That’s why there are regulations to protect data privacy.

What regulations protect data privacy?

Data privacy laws and regulations differ worldwide, and there is no single legal definition of data privacy. But many recent regulations recognize data privacy as a fundamental right.

Published in 1948, the Universal Declaration of Human Rights(new window) sets out your right to privacy in Article 12:

No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honor and reputation. Everyone has the right to the protection of the law against such interference or attacks.

With the rise of the internet and the data economy(new window), governments worldwide have passed legislation regulating the use of personal data — what data you can collect from people and how it should be stored and protected.

Leading the way in data privacy regulation in recent years has been the European Union.

Enacted in 2018, the General Data Protection Regulation (GDPR)(new window) is the EU’s data protection law. It sets out how companies should collect and process the personal data of EU citizens, including but not limited to:

The right of individuals to access, correct, transfer, or delete their personal data
The right of individuals to decide whether their personal information be sold or used for targeted advertising

The GDPR also lays out general principles that organizations should follow, such as:

Data transparency: Organizations should explain the legal grounds for processing your personal data, the two most common being:
- Consent is when you agree to something, for example, to receive marketing emails.
- Legitimate interest refers to the organization’s and third parties’ interests. They range from ones most people would expect, such as the need to protect customers or prevent fraud, to less obvious ones, such as commercial interests or wider societal benefits. They must be balanced against the individual’s interests, rights, and freedoms.
Data minimization: Organizations should store only the personal information required and only long enough to serve its purposes.
Privacy by design: Data management systems should be designed to protect data users’ privacy with appropriate security.

Any organization that handles EU citizens’ personal data must comply with the GDPR, no matter where the organization is based.

Although now outside the EU, the UK has its own version of the legislation known as the UK GDPR(new window), which is implemented by the Data Protection Act of 2018(new window).

One of the toughest data privacy regulations in the world, the GDPR has inspired recent data privacy legislation in the US.

US data privacy laws

Unlike the EU, the US has no single federal law regulating data privacy. Instead, a patchwork of federal and state laws regulates how organizations should handle personal data.

Many US federal data privacy regulations address the demands of particular industries or sectors, as shown in the sample of significant legislation below.

Federal law	Year enacted	Scope
Fair Credit Reporting Act (FCRA)(new window)	1970	Regulates the privacy of consumer information in consumer credit reports
Privacy Act of 1974(new window)	1974	Governs how federal agencies can collect, use, and share data about individuals
Electronic Communications Privacy Act (ECPA)(new window)	1986	Covers wiretapping and data stored electronically, including email and telephone calls
Health Insurance Portability and Accountability Act (HIPAA)(new window)	1996	Protects individuals’ sensitive health information
Children’s Online Privacy Protection Act (COPPA)(new window)	1998	Limits what organizations can do with data collected about children under 13 years of age
Gramm-Leach-Bliley Act (GLBA) (new window)	1999	Controls how financial institutions deal with personal data

Major US federal data privacy laws

However, the US data privacy landscape has shifted significantly in recent years as states have started passing their own comprehensive privacy laws.

Inspired by the GDPR, California enacted the California Consumer Privacy Act (CCPA)(new window) in 2018, which was amended by the California Privacy Rights Act (CPRA) passed in 2020.

Following California’s lead, Colorado(new window), Connecticut(new window), Virginia(new window), and Utah(new window) began enforcing their own privacy laws in 2023. Other states are set to follow suit(new window).

While the details of these laws differ, they all enforce some of the fundamental rights of individuals to control their personal information set out in the GDPR.

Privacy policies

Knowing your basic rights set out in data privacy laws enables you to read and understand privacy policies before you sign up for online services. For example, an organization subject to California’s CCPA should clearly state that you have the right to access and delete the personal information it holds about you.

If a company fails to comply with the CCPA, it can be fined $2,500-7,500 for each violation. While such sums seem small for big corporations, they can add up. As millions of Californians(new window) may be affected by a single data breach, fines could run into billions of dollars.

All the above regulations come in response to growing public concern about the challenges facing data privacy.

What are the challenges to data privacy?

As technology evolves and more and more data is collected and shared, threats to your data privacy have also multiplied. Among the significant threats to data are:

Data breaches: Data breaches expose the data of millions of individuals every year, often leading to identity theft, fraud, and other crimes.
Other cybercrimes: Cybercriminals target sensitive personal data by hacking, ransomware attacks, phishing, and other social engineering scams.
Poor data protection: Many organizations fail to implement data protection methods, such as strong encryption and secure storage, leaving personal data vulnerable to unauthorized access.
Mass data collection: Governments, Big Tech companies, and other online services collect masses data. This can be used for mass surveillance, targeted advertising, or other invasive profiling.
Third-party data sharing: As personal data has become a commercial asset, companies can share your data with vendors, partners, and data brokers. Once shared, you have no control over it.
Proliferation of devices: With the rise of the Internet of Things (IoT), more and more devices are connected to the internet. But far from all device manufacturers prioritize data privacy.
Social media sharing: Posting constant social media updates, we share masses of data online, threatening our data privacy.
Workplace monitoring: Employers may need to monitor employees’ activities. However, these monitoring measures are usually defined or limited by national laws and must not be abusive.
International data transfers: Cloud services may store your data in different countries or legal jurisdictions. This can make ensuring compliance with data protection regulations difficult without additional appropriate safeguards.
New technologies: The rise of technologies like facial recognition, biometrics, and AI has led to more sensitive personal data being generated and stored online. This data is vulnerable to hacking, theft, or other abuse by criminals or nation-states.

How to protect your personal data

Protecting your personal data is essential to prevent it from being stolen or abused.

Ultimately, the defense you need depends on your threat model, but here are some basic steps you can take to keep your data private.

1. Don’t overshare online

Think before your post or share personal data online, whether on social media or any other online form. And check your privacy settings to make sure you know who you’re sharing with.

If you sign up for something online, minimize the personal data you share by only filling in the required fields.

2. Opt out where you can

Don’t click “Accept all” when websites ask whether you want to accept cookies. Select “Reject all”, “Manage cookies”, or whatever the option is to stop advertising and other cookies(new window).

And when you buy something online, don’t agree to direct marketing. That should limit who your personal data is shared with.

3. Encrypt your data

Use encrypted services to secure your personal information. Get private email, like Proton Mail, and secure cloud storage, like Proton Drive, which use zero-access and end-to-end encryption. Only you and those you authorize can access your data.

Turn on full-device encryption on your computer, phone, or tablet to secure your data. If you’re using USB drives to store personal information, make sure they’re encrypted with a strong password.

4. Use strong passwords and 2FA

Secure your online accounts with strong, unique passwords. We recommend using an end-to-end encrypted, open-source password manager, like Proton Pass, which generates and stores passwords for you.

And enable two-factor authentication (2FA) wherever you can. That way, if your usernames or passwords are ever leaked, your accounts will remain secure.

5. Use privacy-focused apps

Switch to privacy-focused apps that respect your privacy. Instead of Gmail or WhatsApp, switch to private email like Proton Mail and a secure messaging service.

To browse the internet, get a privacy-focused browser and set a private search engine as the default.

6. Beware of phishing

Phishing scams try to trick you into revealing personal data or downloading malware, often leading to identity theft, credit card fraud, or other crimes.

Learn how to prevent phishing and block malware(new window) to keep your data secure.

7. Install antivirus

Install reputable antivirus or internet security software to keep your devices secure. Many subscriptions cover desktop and mobile operating systems. Keep it updated with the latest virus/malware definitions.

8. Keep your devices up to date

Keep your computer or phone operating systems and all apps updated to the latest versions with security patches. This helps to keep your device secure against hacking and malware, such as ransomware.

9. Back up your data

Make regular backups of your personal data, including offline backups. That way, you can easily restore your valuable information if it’s ever lost in a data breach or ransomware attack.

10. Use a VPN

A virtual private network (VPN)(new window) encrypts your internet connection, hiding what you do online from your internet service provider (ISP) or anyone else that gains access to your network, legally or otherwise.

However, your VPN provider can still see what you do online, so choose a VPN you trust(new window).

11. Stay secure on WiFi

Some public WiFi hotspots use insecure encryption or lack strong passwords, making them vulnerable to attack. Use a VPN to encrypt your connection.

At home, make sure you change the default administrator username and password. Set a strong password with WPA2 or WPA3 encryption(new window).

12. Check privacy policies

Privacy policies explain how an organization collects, stores, and uses the personal information you provide. Check to see how they protect your data and the legal regulations that apply before you register with a website or service.

Don’t be daunted by all the legalese. There are ways to quickly check a privacy policy before signing up.

Protect your business data

If you run a business, you must protect your data to safeguard personal and confidential business information, comply with the law, and maintain the trust of your customers and partners.

Here are some essential steps to protect your business data:

Encrypt critical data: Encrypt your business data to stop sensitive details from being disclosed if you’re hacked or hit by ransomware. One easy solution is Proton for Business, which protects all your data with end-to-end encryption.
Back up your data: Make regular backups of your company’s critical information, including offsite backups, so you can quickly restore your data if it’s lost or stolen.
Control access: Make sure third-party providers and partners secure and limit access to your data. Restrict employees’ access to sensitive data to those who need to know.
Enforce strong passwords and 2FA: Enforce a policy of strong passwords and two-factor authentication (2FA) on your team’s computers and mobile devices.
Run corporate antivirus: If you have more than a couple of people on your team, consider getting enterprise internet security software, which focuses on endpoint security to secure whole networks.
Be compliant: Take steps to comply with the data privacy regulations that apply to your business. For example, if you’re based in Virginia but export to Europe, you must comply with Virginia data privacy legislation(new window) and the GDPR(new window).
Educate your team: Run regular training about data privacy procedures and basic cybersecurity measures, like how to spot phishing emails.

In a recent survey, 76% of consumers said they wouldn’t buy(new window) from a company they don’t trust with their data. So protecting your customers’ personal data is vital for success in an increasingly privacy-conscious consumer market.

Final thoughts

Data privacy is essential to protect your personal and sensitive information in an increasingly interconnected world. It’s also vital to uphold your fundamental right to privacy and ensure your freedom in a democracy.

Ultimately, ensuring data privacy as technology evolves will be a collective effort involving data protection regulation and action by individuals, organizations, and governments.

But there are things you can do right now:

Follow the guidelines above to protect your personal data or safeguard your business.
Stand up for your data privacy rights, and check the regulation that applies before signing up for an online service.

Switching to Proton is an easy first step. Sign up for a free Proton Account and get end-to-end encrypted Proton Mail, Proton Calendar, Proton Drive, Proton VPN,(new window) and Proton Pass.

Get a free Proton Account

Or secure your sensitive business data with end-to-end encrypted Proton for Business.

No one but you and those you authorize can access your data, not even Proton. And we’re based in Switzerland, so your data is protected by strict Swiss privacy laws.

In short, Proton is data privacy by default, so join us and stay secure!