Protecting Data Privacy: What Companies Must Do to Avoid Legal Risks

data privacy

Businesses collect several pieces of information from their customers. Some examples include their IP addresses, search and browsing history, ads they interact with, and many others.

These pieces of data are very sensitive. And malicious parties will do what they can to access this data and use it for nefarious purposes. For example, they can use the data for identity theft, credit card fraud, and so on. These malicious parties are quite diligent in trying to steal precious data from companies, especially large ones.

Just last June, there were several huge data leaks where hackers collected consumer data and spied on consumers. The companies affected were McDonald’s, Peloton, and Volkswagen.

Data leaks not only affect consumers; they also affect businesses. Consumers tend to boycott or no longer support brands that leaked their personal information. Companies also usually get a bad reputation because of data leaks. So business owners need to implement robust strategies to protect data privacy.

Scale down Information Collected

Many companies collect more information than they need. This means that they have more information to protect. It also means more storage is needed to keep all the data, so hackers will have more to get in the event of a security breach.

Thus, businesses should consider scaling down and only collect data they actually need. It will also be helpful to wipe out data that are no longer needed or being used.

Keep Security Programs Updated

One of the most common causes of a data breach is a malicious cyberattack. This is why security programs are vital when storing data. New forms of cyberattacks emerge every day. And this is why the creators of security programs update their software regularly. Outdated software has weaker security and is more vulnerable to ransomware and malware attacks, increasing the risk of data breaches.

Therefore, it’s important for companies to always update their security programs to prevent attackers from stealing their data. Some business owners may hesitate to update to save money. But a security update is much more affordable relative to the cost of a data breach.

According to IBM, the average annual cost of a data breach is USD 3.86 million. This cost usually comprises the lost business and response to the data breach after the fact. The affected individuals might enlist legal help from and other legal firms to file a lawsuit against a company that leaked their information, in which companies will also have to spend legal fees.

Limit Access to Data


Malicious parties don’t just come from outside a company. There are also malicious insiders of which companies need to be cautious. In this case, one of the best strategies is to limit the number of people who can access sensitive data.

Companies should only grant access to those who crucially need the sensitive information they have collected. For example, a business owner might only grant access to the head of their marketing, instead of all its members, as a precautionary measure. It will also be helpful if they monitor the accounts of employees with access to sensitive data to ensure that they are safe.

Educate Employees

While many employees may know what a data breach is, they may not be aware of any other information related to it. A person needs to know the causes of a problem so that they can be more proactive in preventing that problem. Besides, as the famous adage states, prevention is better than cure.

Thus, companies should consider holding training programs or seminars to educate their employees about data breaches. Some details that employees should be taught are the causes of a data breach, its impacts on company stakeholders, preventive measures, and what to do after a data breach.

Legal Ramifications of Data Breaches

As mentioned earlier, individuals affected by a data breach may sue the company where this issue occurred. Individuals may file claims for damages that include negligence, breach of contract, and so on. Companies may also have to pay fines to the government or, in extreme cases, face jail time.

In the event of a data breach, Singapore law states that the data intermediary must immediately notify the organization. And the organization must immediately alert the affected individuals of the data breach. Notifying concerned parties without delay will reduce the possible legal risks of the data breach. It will also help the organization implement solutions quickly to avoid further damage to them and other affected individuals.

Still, even before things go up to this point, it’s better for companies to implement strict measures that will prevent data breaches.

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