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What Is Privacy Compliance, And Why Is It Important

Paige Harris May 2, 2022 8:30:00 AM

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Why Is Privacy Compliance Important?

Companies collect user data to understand how their customers behave online. This data is vital in allowing them to keep innovating their products according to their audience’s needs. 

But to do this legally, companies must protect customer information, which can be done with the help of privacy compliance software. This article will discuss the definition of privacy compliance and why it is a must for any business.

Privacy Compliance Software 

What Is Privacy Compliance?  

Privacy compliance simply means conforming to the laws that regulate data privacy. 

Just as being compliant with traffic laws means you are obeying traffic laws, abiding by data privacy laws is called privacy compliance. 

These laws outline specific standard operating procedures and processes that organizations must follow while collecting, managing and sharing personal information gathered from users. 

Here are two crucial privacy laws that all businesses should be familiar with:

California Online Privacy Protection Act (CCPA)

This law empowers Californians by giving them the right to request that businesses delete or disclose their collected data. According to CCPA, Californians can also opt out of third-party data sales, meaning users can stop companies from collecting, reselling and using their information.

General Data Protection Regulation (GDPR) 

GDPR controls how different platforms, organizations and companies need to handle sensitive user data. This information could include anything from full names to email addresses to the physical location of users. This law is applicable to online transactions if you have customers or website visitors from the European Union (EU), so it’s important to make sure you are GDPR compliant. If you’re unsure of everything thats required to be compliant, we cover a General Data Protection Regulation compliance checklist at this link.


Why Is Complying With Privacy Laws Important? 

Privacy compliance is vital because privacy laws protect consumer interests and restrict business freedom. Also, noncompliance can result in heavy fines and sanctions against your company. 

Here are a few reasons for why privacy compliance is necessary. 

Protecting Users’ Right To Privacy

Can you force the person sitting next to you on the subway to tell you their name? No, you can’t. Similarly, you can’t push or trick people on the Internet into giving you their personal information.

Even when they allow you to store their information, it must be for proper and legal reasons. For example, you can’t record someone’s details and sell them to a third party without the person’s consent.

This fundamental right to privacy is highly coveted worldwide, and complying with privacy laws ensures that you respect this right. 

Maintaining Your Brand Image

Imagine you bought something online. While making your purchase, the website asked for your name, email address, contact information and location. The business promises to only use this information to update you about their upcoming products, according to the website.  

However, ever since you gave them your information, you’re being bombarded with excessive advertisements and other things you don’t want. You’re receiving marketing calls, texts and emails from numerous brands. 

What is the best response in this situation? You most likely will never allow that website to collect your information again and may even file a complaint against them.

To avoid this happening to your brand, you must respect and follow international privacy laws and show your customers you are a trustworthy business.

Preventing Data Breaches

A data breach is a security violation whereby sensitive information is stolen and misused. You’ll lose customer trust if this happens, and recovering the stolen data could cost a lot.

Privacy compliance requires you to have strong data security measures in place. By complying with data privacy laws, you can avoid data breaches and the damage they cause to your business. 

Noncompliance Isn’t Cheap  

What happens if you don’t follow laws? You can expect to receive a fine—and maybe even face arrest. If your business does not comply with data privacy laws, you can assume the same will happen.

In 2018, Facebook paid a whopping $18.6 billion in fines because it violated the EU’s General Data Protection Regulation (GDPR).


Key Takeaways   

Privacy compliance has numerous benefits. It protects customers’ right to privacy, improves your brand image, helps you gain trust from customers, and gives you a competitive edge. 

On the other hand, noncompliance only leads to trouble. You can face heavy fines and legal action against your company if you don’t follow privacy laws.

So, it’s essential to be transparent about how you collect and use personal data. One way to do this is to write and publish a comprehensive privacy policy on your website. Be as transparent and truthful as you can, and your brand will thank you in the long run.


Read more in our guide to GDPR, where we discuss the law and its applicability for businesses and individuals. 


Paige Harris

Paige is the growth marketing lead at Enzuzo and host of The Living Lab podcast.

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