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10 Overlooked Intricacies in Online Privacy Regulations: a Lawyer’s Perspective

— February 13, 2024

An often-neglected aspect is data minimization. The principle here is simple: Collect only what you need. However, companies often collect more data than necessary, increasing the risk of non-compliance and security breaches. ~ Loretta Kilday, DebtCC Spokesperson, Debt Consolidation Care

In the intricate web of online privacy regulations, we’ve gathered insights from top legal minds, including partners and attorneys, to pinpoint common oversights businesses make. From addressing consent fatigue legally to mitigating vendor privacy risks, explore the nuanced advice from ten legal experts on navigating the complexities of online privacy for businesses.

  • Address Consent Fatigue Legally
  • Understand Data Minimization Impact
  • Clarify Active Consent Requirements
  • Ensure Explicit Informed Consent
  • Implement Data Retention Policies
  • Navigate Data Transfer Complexities
  • Comprehend Global Privacy Reach
  • Enforce Data Subject Rights
  • Manage Cross-Border Data Transfers
  • Mitigate Vendor Privacy Risks

Address Consent Fatigue Legally

One intricacy in online privacy regulations that is often overlooked by businesses is the concept of ‘consent fatigue’ among users and its legal implications. To comply with laws like the GDPR and CCPA, many businesses have implemented frequent and detailed consent requests for data processing. However, this often leads to “consent fatigue”—a phenomenon where users, overwhelmed by the constant barrage of consent notifications, agree without fully understanding or reading the terms. 

This behavior undermines the spirit of informed consent that these regulations aim to uphold. From a legal standpoint, businesses might mistakenly consider these rapid consents as compliance, but in reality, they could be at risk if the consent obtained is not based on a clear and comprehensive understanding by the user. 

Thus, businesses need to balance legal compliance and user experience by designing consent processes that are not only legally sound but also user-friendly, ensuring that the consent obtained is both informed and meaningful.

James Miller, Partner, GDPR Advisor

Understand Data Minimization Impact

One commonly overlooked intricacy in online privacy regulations is the nuanced requirement of data minimization and its impact on business operations. Many businesses, in their quest to harness the power of big data, collect extensive personal information, often more than what is strictly necessary for their immediate operational needs. 

Data minimization principles, a key aspect of regulations like the GDPR and the CCPA, dictate that companies should only collect and process data that is directly relevant and limited to the specific purpose for which it is processed. This principle is frequently underestimated in its complexity and scope. Businesses often fail to regularly review and adjust their data collection strategies, leading to potential non-compliance. They overlook that adhering to data minimization can not only comply with legal requirements but also reduce data storage costs and mitigate risks associated with data breaches. 

Thus, it’s crucial for companies to continually evaluate the data they collect, ensuring it aligns closely with their actual service or product delivery needs, while also instilling greater trust in their consumer relationships.

Michael Edwards, Partner, Michael Edwards Solicitors

Clarify Active Consent Requirements

One intricacy in online privacy regulations that businesses frequently overlook is the requirement for active consent and transparent data-handling practices under laws like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). Many businesses, in their digital operations, gather customer data without fully comprehending the legal necessity of obtaining explicit consent for data collection and processing. 

This oversight isn’t just about having a checkbox on a website; it’s about clearly communicating what data is being collected, for what purpose, and how it will be used or shared. Additionally, these regulations mandate that businesses offer users easy options to access, correct, or delete their personal data. Often, businesses underestimate the complexity of these requirements, leading to non-compliance risks. This aspect of privacy law is crucial yet frequently missed, reflecting a gap between digital business practices and the evolving landscape of privacy rights and consumer expectations.

Steve Jensen, Attorney, Parker & McConkie

Ensure Explicit Informed Consent

One intricacy that I often see businesses overlook is the requirement for explicit and informed consent, especially under regulations like the GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act). 

Many businesses assume that using pre-checked boxes or vague language in their privacy policies is sufficient to obtain consent. However, these regulations require clear, affirmative action by users to signify consent. Businesses must ensure that their consent mechanisms are unambiguous and provide comprehensive information about how personal data will be used. 

Neglecting this can lead to significant legal risks and penalties. It’s crucial for businesses to regularly review and update their consent practices to comply with evolving privacy laws and maintain user trust.

Jonathan Feniak, General Counsel, LLC Attorney

Implement Data Retention Policies

Having worked on both sides of the courtroom as a prosecutor and now as a defense attorney, I’ve gained valuable insight into online privacy regulations. A critical factor that businesses tend to overlook relates to data retention and minimization, which is crucial given the vast amount of sensitive client information law firms deal with, from intellectual property to personal financial information.

While employing advanced encryption methods and robust cybersecurity measures are essential, the issue of data retention often gets less attention. Many firms are unaware of how long they should keep client data or when it is appropriate to remove it. For instance, as revealed in a recent ABA Tech Report survey, just 33% of solo practitioners have a data retention policy in place. Firms should have, and more importantly, adhere to, a clear data retention policy which ensures that customer data is retained only as long as necessary.

The intricacies of this regulation extend to where this data is stored. In my practice, we utilize methods like external hard drives and off-site storage, each carrying their own unique privacy and security considerations that have to be managed. This kind of comprehensive data strategy that goes beyond the usual focus areas of encryption and password protection is often missing in many businesses’ approach to online privacy regulations.

Lastly, besides technology, human aspects such as training colleagues about cybersecurity best practices and ensuring compliance with set policies are also vital, yet often overlooked, components of information privacy.

Justie Nicol, CEO, Colorado Lawyer Team

Navigate Data Transfer Complexities

As a lawyer who owns a legal process outsourcing (LPO) company, I have seen several intricacies in online privacy regulations that businesses often overlook, especially those handling sensitive data. One of them is the hidden complexities of data transfer and residency requirements. Businesses, including LPOs, often assume that complying with the data privacy laws of their own country is sufficient. But when handling data from other countries, things often get muddled up. 

Many regions, like the European Union with its General Data Protection Regulation (GDPR) and California with the California Consumer Privacy Act (CCPA), have strict data transfer and residency requirements. These can dictate where data can be stored, processed, and transferred, often requiring explicit consent from individuals for cross-border transfers. This creates several challenges. LPOs often receive data from various sources, and the origin and legal requirements applicable to each dataset might not be readily apparent. Misidentifying the origin or overlooking regulations specific to that region can lead to hefty fines and reputational damage. 

I have seen businesses rely on subcontractors or third-party vendors for data processing. However, responsibility for data privacy breaches lies with the initial controller. Failing to conduct thorough due diligence on vendors’ data security practices and ensuring their compliance with relevant regulations can put a business at significant risk. I believe different regulations have diverse and sometimes conflicting requirements for data transfer, encryption, and notification in case of breaches. Staying updated and ensuring compliance across all applicable laws can be a complex and resource-intensive task. 

In my opinion, we can navigate this intricacy by prioritizing vendor management, which is conducted through due diligence on potential vendors, assessing their data security practices, and ensuring they comply with relevant privacy regulations. Contractual clauses should delineate data security responsibilities and hold vendors accountable for breaches. 

So, by proactively addressing the complexities of data transfer and residency requirements, LPOs can ensure compliance, mitigate risks, and build trust with their clients and the individuals whose data they handle. This, I believe, is essential for any business operating in today’s globalized and data-driven world.

Aseem Jha, Founder and Head of Customer Delivery, Legal Consulting Pro

Comprehend Global Privacy Reach

Businesses often overlook the jurisdictional and global reach of online privacy laws. There are several companies that operate all over the world. They collect personal information from their clients living in various countries. What they forget is that there are different privacy laws in various countries.

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Photo by Ron Lach from Pexels

A prime example is the General Data Protection Regulation (GDPR) in the EU and the California Consumer Privacy Act (CCPA). The most challenging part is figuring out how these laws work beyond your own country.

A US-based business must abide by the GDPR laws for their European clients and the CCPA for their California clients, each having different requirements.

Lyle Solomon, Principal Attorney, Oak View Law Group

Enforce Data Subject Rights

The concept of data subject rights and the procedures for enforcing them is one complexity of internet privacy laws that companies frequently ignore. Several privacy laws, like the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR) of the European Union, provide individuals with certain rights regarding their data, including the ability to access, erase, correct, and transfer their data. 

Companies may be unaware of how difficult it is and how much work goes into answering these requests. They often neglect to set up effective procedures and systems for responding to these requests within the allotted time frames, which may lead to non-compliance and potential legal repercussions. 

Furthermore, companies might fail to sufficiently train their data management and customer service teams on these rights, which could result in requests being handled incorrectly. Businesses should fully comprehend and plan for how they will address data subject rights and establish clear protocols for promptly and accurately responding to such requests to ensure compliance with online privacy laws.

Neil Davies, Founder and Senior Partner, Caddick Davies Solicitors

Manage Cross-Border Data Transfers

I have seen that one of the most common business compliance oversights is managing cross-border data transfers. With specific requirements regarding international data transfer, businesses often neglect regulations, such as the GDPR and the CCPA. This involves local compliance and concerns about data crossing borders where other rules might apply. It requires mechanisms such as standard contractual clauses to protect information consistently.

An often-neglected aspect is data minimization. The principle here is simple: Collect only what you need. However, companies often collect more data than necessary, increasing the risk of non-compliance and security breaches.

Well-defined privacy policies are also important. Even though most businesses prefer to focus on legality, they often make their policies too complicated for an average individual, thereby sponsoring user confusion.

Lastly, explicit consent and elaborately designed mechanisms for data processing are normally poorly implemented. However, a simple “I agree” button does not suffice, as the law demands specific information regarding which data is collected and how it will be used.

Loretta Kilday, DebtCC Spokesperson, Debt Consolidation Care

Mitigate Vendor Privacy Risks

Businesses are often responsible for the actions of their vendors and third-party service providers. Privacy regulations may require businesses to conduct due diligence on these entities, ensuring they meet privacy standards and have appropriate safeguards in place. 

Additionally, customers and clients trust businesses with their personal information, and if a small business’s vendors experience a data breach or violate privacy regulations, it can negatively impact the small business’ reputation. Trust is crucial for customer loyalty, and a breach of trust because of a vendor’s actions can be damaging.

Privacy regulations are subject to change and may become more stringent over time. Therefore, businesses need to stay informed about evolving regulations and ensure that their vendors can adapt to these changes, minimizing the risk of compliance gaps.

By considering vendor and third-party risks, businesses can take proactive steps to protect customer data, maintain compliance with privacy regulations, and build a trustworthy reputation in their respective markets.

Meghan Freed, Managing Co-Partner, Freed Marcroft

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