Privacy Principles by Design

"Privacy by design" is a concept that has been tossed around a lot lately, and it’s one that's becoming increasingly important in our data-driven world. It essentially means that when you're creating a new product, service, or system, you should consider and integrate privacy protections from the very beginning, rather than treating it as an afterthought, so really, it’s more like “privacy integrated into the design.”

Think of it like this: instead of building a house and then trying to add a security system later, you're incorporating things like strong locks, alarm systems, and maybe even a moat with sharks (okay, maybe not sharks) into the initial blueprints.

In the context of data privacy, this could mean things like:

• Minimizing data collection: Only collect the data you absolutely need.

• Giving users control: Allow users to access, correct, or delete their data.

• Building in security: Use encryption and other security measures to protect data.

• Being transparent: Be open about how you collect, use, and share data.

By incorporating privacy from the get-go, you can build trust with your users and avoid potential privacy issues down the road.

Now, let’s go even deeper into the concept of Privacy by Design, with a particular focus on a practical, risk-based approach that I created and refer to as “Privacy Principles by Design.” This approach is particularly well-suited for startups, SMBs, and entrepreneurs who are navigating the complexities of data privacy regulations, such as the General Data Protection Regulation (known more commonly as GDPR).

Understanding the GDPR Challenge

The GDPR, as you may know, is a substantial piece of legislation. It's 261 pages long with 99 articles. That's a lot to digest! Traditionally, privacy by design meant building your entire data processing system with every single one of those GDPR requirements in mind. That's a daunting task for any organization, let alone a smaller, growing business. The sheer volume and complexity of the requirements can be overwhelming, leading to potential delays, increased costs, and the risk of non-compliance.

Introducing “Privacy Principles by Design”

This is where the “privacy principles by design” approach comes in. Instead of getting bogged down in the minutiae of specific requirements, we focus on the core principles of the GDPR. These principles, which are at the heart of the regulation, include:

• Lawfulness, fairness, and transparency: Processing personal data in a lawful, fair, and transparent manner.

• Purpose limitation: Collecting personal data only for specified, explicit, and legitimate purposes.

• Data minimization: Collecting only the minimum amount of personal data necessary for the intended purpose.

• Accuracy: Keeping personal data accurate and up-to-date.

• Storage limitation: Limiting the storage of personal data to the necessary period.

• Integrity and confidentiality (or security): Ensuring the security of personal data through appropriate technical and organizational measures.

• Accountability: Demonstrating compliance with the GDPR principles.

By aligning your data processing activities with these principles, you're essentially building a strong foundation of compliance. It's a more achievable goal, especially for businesses with limited resources. And the risk-based approach that we apply in our strategic consulting process allows you to demonstrate a reasonable level of compliance early on, which is crucial for attracting investors, getting business from customers (especially enterprise customers), satisfying regulators, and avoiding the "technical debt" of non-compliance down the line.

Building a Strong Foundation

Going back to that house analogy, the GDPR requirements are like the detailed blueprints with all the tiniest details annotated, but without a key to interpreting all those symbols you’re looking at, while the principles of GDPR are the fundamental building codes - the rules that you follow in construction to make sure your final product is fundamentally safe. Focusing on the principles ensures that your foundation is strong, even if you haven't added all the finishing touches yet.

Advantages of the Privacy Principles by Design Approach

• Sustainable Competitive Advantage: By proactively addressing privacy concerns and demonstrating compliance, we can help you differentiate yourself from competitors and build trust with customers.

• Mitigation of Regulatory Risk: While startups and smaller businesses may not face the same level of scrutiny as large corporations, compliance is still essential. A principles-based approach helps reduce the risk of penalties.

• Avoid a Regressive Tax.  Unfortunately, GDPR applies to all businesses equally, with no allowance for differences in size or revenue. The financial cost of compliance for startups and SMBs can represent a much larger investment relative to their overall operating budget compared to large corporations. A principles-based approach enables you to maximize the “I” in your compliance R.O.I. and avoid paying for compliance with a lower “R.”  In our house-building analogy, it’s like if your town had one electrician who charged a flat rate no matter how big the building is or how long the work would take - you’re building a bungalow, but you’re paying the same amount as the giant construction conglomerate downtown that’s building a skyscraper.

• Positive Impression for Investors and Customers: Demonstrating a commitment to privacy principles can attract investors and reassure customers, especially enterprise customers, that their data is being handled responsibly. Companies who demonstrate privacy compliance see significant increases to their valuations, especially where that compliance is related to their core business activities.

• Solid Foundation for Future Growth: As your business grows and evolves, we can build upon this foundation and develop a more comprehensive privacy program that adapts to changing regulatory requirements - especially as you expand and are subject to new regulations - and business needs.  While GDPR applies to all businesses equally, the bigger your business gets, the more scrutiny you’ll attract from regulators, and those regulators often hold larger businesses to a higher standard and expect greater sophistication in their privacy compliance.

GDPR's Global Impact

Remember, GDPR is not just European regulation. It has global implications.  First, due to what’s known as “extraterritorial application,” even if you’re not located in the EU or UK, GDPR’s rules still apply to your business as soon as you process the personal data of any EU or UK citizen. Also, by adopting our Privacy Principles by Design approach, you're not just complying with GDPR, you're preparing your business for a global landscape of data privacy laws. Many other countries and regions have implemented or are implementing or considering similar regulations based largely on GDPR. The principles enshrined in the GDPR already are, or are likely to be, reflected in these laws.

Strategic and Proactive Approach

In essence, Privacy Principles by Design is about being smart and strategic. It's about understanding the spirit of the law, not just the letter of the law. It's about building a culture of privacy within your organization. And it's about positioning your business for success in a world where data privacy is increasingly important.

We can work with your business to embrace the principles of privacy by design.  Returning to our house analogy, even if you are a general contractor yourself, you can’t just decide to break ground on a new building one day - you need experts like engineers, architects, people to check that everything is up to code so you have a solid plan and path forward to make sure what you’re building will stand the test (or tests) of time.

By working with Aetos to create this strategic blueprint for your company, you're taking a proactive step towards protecting your business, your customers, and your future by building a foundation for sustainable growth in a privacy-conscious world. Remember, privacy is not just a compliance issue; it's a business opportunity.

By prioritizing privacy, you can:

• Enhance Customer Trust: Demonstrating a commitment to protecting customer data fosters trust and loyalty. In an era where data breaches and privacy concerns are prevalent, prioritizing privacy can be a key differentiator for your business.  Enterprise customers, in particular, are sensitive to introducing risks from vendors or other businesses into their own privacy and security ecosystem, and your business’s ability to demonstrate a savvy level of compliance can provide you with a significant advantage in winning those deals.

• Mitigate Legal and Financial Risks:  Proactive privacy measures help you navigate the complex and rapidly evolving regulatory landscape, reducing the risk of legal disputes, fines, and reputational damage.

• Gain a Competitive Advantage:  Businesses that prioritize privacy position themselves as leaders in their industry, attracting customers and investors who value their data security and privacy. This is especially true for your core business activities. Regulators have turned to a new deterrent for businesses that are built on data that was processed in non-compliant ways - they’re calling it “algorithmic disgorgement,” which is a scary not-safe-for-work-sounding way to say that they have required businesses who have built their products, code, AI systems, algorithms, etc. by processing data (even a little bit) in violation of privacy laws to delete not only that data, but also the resulting products, code, AI systems, algorithms, etc. that they created using that data. This type of penalty could quickly bring about the collapse of a business or scare away potential investors who don’t want to inherit that risk.

• Foster Innovation: A privacy-centric approach encourages innovation by promoting the development of new technologies and business models that respect and protect user privacy.

If you embrace privacy as a core business value and integrate it into your strategic planning, you can build a resilient and successful organization that is well-prepared for the future. Remember, privacy is not just a checkbox to tick; it's a fundamental aspect of building a sustainable and trustworthy business in the digital age.

Don't Get Tripped Up: Global Privacy Control (GPC) and Your Business

In today's data-driven world, respecting user privacy isn't just good manners – it's increasingly a legal requirement and a cornerstone of customer trust. One of the important developments you need on your radar is the Global Privacy Control (GPC).

If you're a startup or a small to medium-sized business (SMB), you might be wondering, "Another acronym? What does this one mean for me?" Let's break it down.

What Exactly IS Global Privacy Control?

Think of GPC as a universal remote for online privacy preferences. It's a signal sent from a user's browser or device that automatically communicates their desire to opt out of the sale or sharing of their personal information online. The official GPC website explains it as a way for users to "notify businesses of their privacy preferences" (Global Privacy Control). Instead of users having to manually click "Do Not Sell My Information" on every website they visit, GPC allows them to set this preference once at the browser or extension level, as detailed by privacy-focused organizations like Termly.

Why Should Your Business Care About GPC? (Especially if you're a Startup or SMB!)

1. It's Becoming Legally Mandatory: This is a big one. Several U.S. states with active privacy laws now require businesses to recognize and honor GPC signals as a valid opt-out request.

   • California: The California Attorney General's website explicitly states that under the CCPA (as amended by CPRA), GPC must be honored as a valid consumer request to opt-out of sale/sharing (State of California - Department of Justice).

   • Colorado: The Colorado Attorney General has confirmed that GPC is a recognized Universal Opt-Out Mechanism (UOOM) under the Colorado Privacy Act (CPA) that businesses must honor (Universal Opt-Out and the Colorado Privacy Act).

   • Connecticut: The Connecticut Data Privacy Act (CTDPA) also requires businesses to recognize opt-out preference signals like GPC, with these provisions effective as of January 1, 2025 (Understanding Connecticut's Enhanced Data Privacy Measures).

   • Ignoring these requirements could lead to non-compliance and potential penalties. For instance, CCPA violations can result in fines of $2,500 to $7,500 per violation (CCPA Fines & Penalties).

2. Builds Customer Trust: In an era of heightened privacy awareness, consumers are looking for businesses that respect their choices. Honoring GPC signals demonstrates that you take privacy seriously. Statistics show a high level of consumer concern about data privacy; for example, Usercentrics reports that 86% of Americans say data privacy is a growing concern for them, and 84% of users are more loyal to companies with strong security controls (Usercentrics). This transparency can be a powerful differentiator and foster loyalty.

3. Reduces Friction for Users (and You!): By automatically recognizing opt-out requests via GPC, you streamline the process for your users. This can lead to a better user experience compared to navigating complex cookie banners or privacy settings on every site. For you, it can simplify one aspect of managing user consent.

4. Stay Ahead of the Curve: The privacy landscape is constantly evolving. GPC is part of a broader movement towards giving users more control over their data. Adopting it early shows foresight and positions your business as a responsible data steward.

What Do You Need to Do About GPC?

• Understand Your Obligations: First, determine if the privacy laws requiring GPC recognition apply to your business. This usually depends on factors like your revenue, the amount of personal data you process, and where your users/customers are located.

• Technical Implementation: Your website needs to be configured to detect the GPC signal from browsers that send it. The GPC website itself offers some guidance for developers, and resources like TrustCloud provide overviews of technical integration (TrustCloud Community). Once detected, your systems must treat it as a valid request to opt out.

• Update Your Privacy Policy: Your privacy policy should clearly explain how you respond to GPC signals, informing users that you recognize this method of opting out.

• Test and Verify: Ensure your GPC detection and response mechanisms are working correctly.

Navigating Compliance Doesn't Have to Be a Headache

We get it. As a startup or SMB, you're juggling a million things. Adding another compliance requirement to the pile can feel overwhelming. The good news is you don't have to figure it all out on your own.

At Aetos Data Consulting, we specialize in helping businesses like yours understand and implement data privacy and compliance measures in an affordable and manageable way. Whether it's assessing your GPC obligations, updating your policies, or building a broader compliance framework, we're here to provide expert guidance.

Respecting user privacy through tools like Global Privacy Control isn't just about avoiding fines; it's about building a sustainable, trustworthy business.

Data Processing: The Heartbeat of Data Privacy (And Why You Should Care)

Ever wonder what really goes on behind the scenes when you hand over your email address to that online store? Or when you share your location with a ride-hailing app? It's all about data processing, the unsung hero (or sometimes villain) of the data privacy world.

In the realm of data privacy, "data processing" isn't just about number crunching or complex algorithms. It's a broad term that encompasses virtually any action performed on personal data, including just storing the data. Think of it as the lifecycle of your information from the moment it's collected to the day it's deleted (and every step in between).

Data Processing: A Definition That Goes Beyond "Computing"

The GDPR and other data privacy laws cast a wide net when it comes to data processing, whether it's done manually or through automated systems.

This means that even activities like:

• Collecting customer information on a paper form.

• Storing employee records in a filing cabinet.

• Sharing data with a partner organization via fax (yes, some people still use those!)

... all fall under the umbrella of data processing.

Why Data Processing is the Heart of Data Privacy

Data privacy regulations like the GDPR place strict obligations on organizations when it comes to processing personal data. This is because data processing activities can have a significant impact on individuals' privacy rights.

Here's why data processing is at the core of data privacy:

• It's where the risks lie. Data breaches, unauthorized access, and misuse of information and personal data often occur during processing activities.

• It's where control matters. Individuals have rights regarding how their personal data is processed, including the right to access, correct, and delete their information.

• It's where transparency is key. Organizations need to be transparent about how they process personal data (throughout its life cycle), inform data subjects about their rights with respect to their personal data - such as the right to object to processing - and obtain proper express consent before processing data when necessary.

Examples of Data Processing in Action 

Data processing is happening all around us, every day. Here are a few examples:

• Online shopping: When you enter your credit card details to buy that new gadget, the online store is processing your data, including personal data,  to complete the transaction.

• Social media: Every time you like a post, share a photo, or send a message, the social media platform is processing your personal data to provide its services and also to monetize your personal data, typically for advertising purposes.

• Healthcare: When you visit a doctor, your medical records  and personal data are processed to provide you with appropriate care.

• Marketing: When you receive a personalized email promoting a product you might be interested in, your personal data has been processed for marketing purposes.

The Legal Implications: Why You Need to Get it Right

Data privacy regulations impose specific requirements on organizations that process personal data. These requirements often include:

• Obtaining consent: Getting express permission from individuals before collecting and processing certain personal data where legally required.

• Ensuring data security: Implementing appropriate technical and organizational measures to protect personal data.

• Adhering to specific processing purposes: Only processing personal data for the purposes it was collected for, being transparent about those purposes to the data subjects, and not using it for any incompatible purposes.

• Providing transparency: Informing individuals about how their personal data is being processed and  informing them of their rights.

• Data minimization: limiting personal data collection and retention to the bare minimum necessary to accomplish the intended purpose 

Failure to comply with these requirements can lead to hefty fines, reputational damage, loss of customer trust, and legal challenges.

Aetos: Data Privacy Principles by Design

Navigating the complexities of data processing can be tricky, but you don't have to do it alone. Aetos Data Consulting is here to help you understand your obligations, implement best practices in a practical, business-friendly way, and ensure your data processing activities are compliant and ethical.

Contact us today to learn more about how we can help you protect your customers’ personal data and build trust with your customers.

The NJDPA Takes Effect: A New Era of Data Privacy in New Jersey

The New Jersey Data Protection Act (NJDPA) officially comes into force on January 15th, 2025. This legislation marks a significant step in safeguarding the personal information of New Jersey residents and brings the state in line with a growing number of states enacting comprehensive data privacy laws.

Understanding the NJDPA's Core Principles:

The NJDPA centers around several key principles:

• Consumer Control: Empowering New Jersey residents with greater control over their personal data.

• Business Accountability: Placing clear obligations on businesses to handle personal data responsibly and transparently.

• Risk-Based Approach: Requiring businesses to assess and mitigate the risks associated with their data processing activities.

Key Provisions for Businesses to Note:

• Consumer Rights: The NJDPA grants New Jersey residents various rights, including the right to access, correct, delete, and obtain a copy of their personal data.

• Data Security: Businesses must implement reasonable security measures to protect personal information from unauthorized access, use, or disclosure.

• Sensitive Data: Processing sensitive data, such as health information or biometric data, requires explicit consumer consent.

• Targeted Advertising and Profiling: Businesses engaged in targeted advertising or profiling must conduct data protection assessments to evaluate and mitigate risks.

• Universal Opt-Out: Starting July 15th, 2025, businesses must recognize a universal opt-out mechanism, allowing consumers to easily opt out of the sale or sharing of their personal data.

Preparing for the NJDPA:

Businesses subject to the NJDPA should take proactive steps to ensure compliance, including:

• Reviewing and updating privacy policies.

• Implementing data protection measures and conducting risk assessments.

• Establishing procedures for responding to consumer rights requests.

• Staying informed about the latest guidance and interpretations of the NJDPA.

White & Case has a great article that goes into additional detail, which you can read here.

By understanding and complying with the NJDPA, businesses can demonstrate their commitment to protecting consumer privacy and fostering trust in the digital marketplace.

CCPA Compliance in 2025: Updates to fines & Penalties

As of January 1st, 2025, businesses subject to the California Consumer Privacy Act (CCPA) must be aware of significant updates to the potential fines and penalties for non-compliance. These adjustments, mandated by California law and tied to the Consumer Price Index (CPI), reflect the state's ongoing commitment to protecting consumer data privacy.

Key Changes:

• Increased Administrative Fines: Fines for non-compliance have increased to $2,663 per violation.

• Higher Penalties for Intentional Violations: Intentional violations or those involving the mishandling of data from minors (under 16) now carry a penalty of $7,988 per violation.

Implications for Businesses:

These increased penalties underscore the importance of prioritizing CCPA compliance. Businesses that handle the personal information of California consumers should review their data privacy practices and ensure they have the necessary safeguards in place to protect consumer data.

What Businesses Should Do:

• Perform compliance audits

• Review policies, and how they are being implemented

• Educate your employees on CCPA requirements and best practices

• Engage in incident response planning

Read more on the subject here.