By Raghav Iyer
In this fast-paced digital era, innovation is what can make an organization stand out among its competitors. But in the effort to enhance user experience with technology-powered advancements, user privacy is becoming a worrying casualty.
Let’s assume you’re shopping for a laptop. If you’ve done any of your shopping online, you will start to see advertisements for laptops across the different pages you visit, complete with relevant specs and special discounts. This is called targeted advertising, and it can actually save you a lot of time by helping you find the perfect laptop for you. However, the price you pay for this convenience is your privacy, and many people are tired of their data being used for marketing.
This is one of the many reasons why the recent Digital Personal Data Protection (DPDP) Act in India is crucial, as it arms individuals with greater control over their data and its use.
However, privacy restrictions on user data could deal a heavy blow for businesses, especially startups. If an organization has just entered the market, stringent data privacy regulations might hamper its ability to collect relevant data that could help identify market pain points and improve its offering.
Striking a balance between innovation and privacy
Any technological advancements and innovations require a lot of data to achieve perfection. Big data analytics has become the backbone of businesses, and this doesn’t seem to be changing anytime soon.
But with the passing of the DPDP Act, the need to strike a balance between data privacy and innovation has become more important than ever before. To achieve this balance, organizations must embrace a few key principles.
Respecting user privacy
When it comes to innovation that focuses on offering convenience, a challenge that often arises is how to ensure data privacy. The need to create an environment where the user experience is seamless, yet users don’t feel like they’re being watched or worry that their personal information will be exposed, has become an important yet daunting task.
Rather than amassing huge amounts of data, organizations must only collect information that is critical to improve the user experience. Collecting data without storing the identity of the customer or user might help in larger analyses of the consumer base while reducing the possibility of a security breach.
Transparency and consent
Another crucial aspect of data privacy is letting the users know what data is being collected and how it will be processed. It is also important to obtain consent from users before processing their data. Failure to do so may result in fines and penalties. Mentioning whether the data is being collected for educational, marketing, or research purposes can also help users decide the level of information they want to furnish. Further, access control can help reduce the chances of a data breach.
Collaboration between industries and regulatory bodies
The responsibility of balancing privacy and innovation isn’t solely on businesses. The government must ensure that policies and regulations safeguarding the privacy of user data serve their purpose while still encouraging innovation in business. On the other hand, industry leaders have an obligation to engage in proactive self-regulation by establishing guidelines, best practices, and codes of conduct that align innovations with privacy considerations. The following best practices can help safeguard customer data.
- Data minimization: Reduce the amount of data collected from the user and retain only the minimum amount of personal data required to achieve the intended purpose.
- User control and consent: Allow users to dictate what data is being collected from them. Obtain explicit consent before collecting personal information. Provide options to opt out of data collection.
- Data retention policies: Retention of personal data should be controlled. Users must also be provided an option to request for deletion of their information from the database.
- Transparency: Provide clear picture of how data is being collected, used, and shared. The privacy documents should be written in simple language so that users can understand them easily.
Implications of the DPDP Act
Considered to be the Indian version of the GDPR, the DPDP Act is all set to redefine the data privacy policies in India. In light of its ratification, here are some of the major implications for organizations doing business in India:
- Enhanced data privacy requirements: With the aim of safeguarding individuals’ data, the DPDP Act requires organizations to have a robust security system that can monitor unauthorized access, data breaches, and data misuse. Further, the act also requires organizations to store certain types of data within the country’s borders. This will help regulate data control and management.
- Better control for users: The act grants individuals greater control over their personal data by providing them with rights such as the right to information, correction, erasure, objection, and data portability as well as the right to be forgotten.
- Economic impact: Businesses that extensively rely on data for marketing and operational purposes will definitely find it challenging to meet the upcoming data privacy requirements. On the other hand, privacy-driven innovation will open up new business opportunities.
- Redefined approach to data privacy: The act doesn’t require organizations to receive consent for legitimate uses of data, such as for medical emergencies, employment, etc. Further, for individuals under the age of 18, consent can be provided by the parent or the legal guardian.
- International relations: The data privacy policies found in the DPDP Act will facilitate the secure and easy flow of data between countries. Further, if the DPDP policies align with international privacy policies like the GDPR, exchange of data between similar countries will be seamless.
- Enforcement and penalties: Depending on the severity of the data breach or the non-compliance, the act requires organizations to pay penalties of up to ₹500 crore. Apart from the economic impact for an organization, these penalties can also impact their reputation.
Looking forward
Safeguarding data privacy is a foremost concern in today’s digital landscape. Striking a balance between privacy and innovation is essential. Governments and businesses alike must ensure regulations not only shield user data but also enable the legitimate use of data.
The DPDP Act is poised to establish a solid foundation for data privacy policies and practices in India. With clear guidelines, user empowerment, and enhanced data protection measures, it promises to instill confidence in users and businesses alike. By promoting ethical data practices, this act can drive innovation while bolstering India’s position in the global data landscape. Continued adaptation and collaboration between businesses and the government is essential to address evolving challenges and ensure the benefits of data security extend to individuals and society at large.
The author is product consultant, ManageEngine