Data is one of a business’s most valuable assets, but it comes with legal responsibilities. Understanding data privacy laws is essential to protecting customers, maintaining public trust and avoiding liability.
For some businesses, compliance involves a mix of state, federal and international regulations, depending on how and where they operate.
Data privacy matters more than ever
Customers are increasingly aware of how their data is used and paying closer attention to how businesses handle it. Failing to comply with privacy laws can result in fines, lawsuits and reputational harm.
However, businesses that prioritize their customers’ privacy can build stronger relationships and stand out in today’s competitive market.
Texas recently implemented the Texas Data Privacy and Security Act (TDPSA), which establishes requirements for how businesses collect, use, store and share personal data. It gives consumers important rights, such as:
- The ability to access the personal data a business collects
- Requesting the business to correct or delete their data
- Opting out of certain types of data processing, such as targeted advertising
In addition to state laws, several federal laws regulate how certain types of data must be handled. Many of these laws are industry-specific:
- The Health Insurance Portability and Accountability Act (HIPAA): Applies to health care providers and businesses that handle protected health information (PHI).
- The Gramm-Leach-Bliley Act: Governs financial institutions and requires safeguards for financial data.
- The Children’s Online Privacy Protection Act: Imposes rules on businesses that collect data from children under 13.
If your business operates online or has customers outside the United States, you also need to be aware of international laws. The General Data Protection Regulation (GDPR) may apply if you collect data from residents in the European Union.
Many businesses don’t intentionally violate the law. However, they sometimes overlook basic compliance steps. Working with legal professionals can help ensure your business meets current regulations. If you’re facing claims of violating data privacy laws, they can also provide valuable guidance.