Over 780,000 records are lost to hacking daily, and 70% of businesses are forced to close after a significant data loss. With major headlines of data breaches appearing almost every day that include leading brands such as T-Mobile, Forever 21, and Verizon announced the exposure of the data of millions of users, it has become crucial for businesses to understand the different data privacy and data security laws that have been put in place to protect consumers. Since data security laws are complex, it is the shared responsibility of the regulatory authorities, compliance and security teams of businesses, and even data protection officers (DPOs) to ensure businesses follow the relevant regulations and protect consumer data.
Why Data Protection Laws and Regulation Laws are Important
Without proper data protection laws in place to protect consumer data, they run the risk of getting hacked, having their data stolen or exposed, and falling victim to a data breach, fraud, or identity theft. When consumers feel that their data is safe, however, it helps build trust in the brand and become loyal consumers.
Businesses that fail to follow data privacy legislation run the risk of having sensitive information such as IPs and other trade secrets exposed, damaging their brand and reputation and causing them to lose their competitive advantage. They may also be more susceptible to cyberattacks, especially ransomware and fraud. In addition, when consumers have their data exposed or stolen, they are legally entitled to pursue legal actions against the business responsible for the breach. Many businesses are legally required to pay fines to their consumers following a data breach. In the event that your business does experience data loss or a data breach, purchasing cyber insurance can help you navigate the legal process, notify the parties involved, and help cover the legal and financial fees required in the event of a cyberattack.
Which Countries Have the Best Data Protection Laws?
In light of the damage data breaches cause, different countries have responded to protect their citizens with legislation. Europe and the United States are known for having strong data protection laws to protect consumers. In contrast, only 61% of Asian and African countries have adopted data protection and privacy laws. Other regions, such as the developing world, have fewer resources dedicated to regulatory enforcement and have made less effort to protect consumers, making them a more susceptible and attractive target to fraudsters, hackers, and scammers. While the vast majority of European countries have online privacy laws, for example, several African countries do not have any legislation in place for online consumer protection.
3 Main Types of Data Protection Laws
Data protection laws should cover basic protections such as data collection and sharing rights (e.g., which companies are sharing your data), opt-in consent (e.g., companies need to obtain your consent to share or sell your data with third parties), data minimization (e.g., a company collecting only what it needs), and no data-use discrimination (e.g., no discriminating against consumers who want to exercise their data protection rights).
Data protection and data privacy laws can typically be classified into three main categories:
- Federal or country-wide versus state-wide data privacy laws
Some countries, such as those in Europe, are able to have one general law related to data protection and privacy. In Europe, that law is the General Data Protection Regulation (GDPR), which requires businesses to ask customers for permission to use their data. Other countries, such as the U.S., have many different laws pertaining to different types of data, locations of consumers, or industries. Instead of one unified law regarding data protection and privacy, the U.S. has many different laws that protect the data of citizens in different states, such as the Virginia Consumer Data Protection Act (VCDPA) and the California Consumer Privacy Act (CCPA). Since data is unregulated in most states, however, it means that businesses can sell consumer data to third parties without their agreement.
- Data privacy laws for different types of data
Other data protection laws, such as HIPAA and the Family Educational Rights and Privacy Act (FERPA), focus on protecting different types of data. For example, HIPAA, the Health Insurance Portability and Accountability Act, includes the protection of confidential health information. At the same time, FERPA protects a child’s education records and personally identifiable information (PII), permitting their disclosure only with the permission of the student or parent and under extenuating circumstances. COPPA, the Children’s Online Privacy Protection Act, regulates websites and operators that deal with data of children under the age of 13.
- Data privacy laws for different types of industries
In addition, there are data protection and privacy laws focused on different industries. For example, the Gramm-Leach-Bliley Act (GLBA) requires financial institutions to explain to their customers how they obtain information, as well as how they protect consumer data. This includes allowing customers to opt out of sharing their personal data with third-parties. The Payment Card Industry Data Security Standard (PCI DSS) regulates companies that collect data from financial industries that handle credit card data.
Leverage the Benefits of Guardz
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How Guardz Can Help You Protect Your Online Data
One of the best defenses against data breaches is the prevention of data loss and avoidance of the serious repercussions your business faces after a breach. The Guardz Data Loss Prevention connects to data in the cloud and secures several vectors of attack, from abnormal exposure to excessive permissions, as well as exposes accidental and intentional data exfiltration so businesses can take a proactive approach to prevent data breaches.
Our fully managed service empowers MSPs with real-time protection and cyber insurance tailored to your business needs to secure businesses against evolving threats. With a holistic, multi-layered approach, Guardz leverages AI to defend your business not only against data loss but also phishing, ransomware, and additional user risks facing MSPs and business owners.