Data PrivacyData Privacy Vis A Vis Digital Marketing

INTRODUCTION

In this digital era, data is considered to be the king of the commercial markets, as with the rising trends of social media, e-commerce, and digital marketing; companies are gathering more and more information about their customers. This data is crucial for businesses to create personalised marketing campaigns, target specific audiences, and ultimately increase the revenue chain. However, with this increased collection of personal data comes an additional responsibility to protect it.

Regardless of jurisdiction, Data Privacy is always imperative. To engage with companies, people want assurance that the data they provide would be handled with utmost care and diligence, which is why many organizations have deployed Data Protection practices that show their dedication to keeping and handling user-provided data with care.

Companies that engage in shady customer data management practices, or experience data breaches due to a lack of security measures, run the risk of ruining their reputation and losing a ton of money.

With the increasing incidents of data breaches and privacy violations, businesses need to prioritise data privacy in their digital marketing strategies in order to build mutual trust and protecting their brand reputation amongst their customers. It is vital to prioritize customer data privacy and take proactive steps to protect customer information.

COEXISTENCE OF DATA PRIVACY AND DIGITAL MARKETING

Data Privacy refers to the right of customers to control how their personal information is utilized by third-party firms and organizations.

For digital marketers it also assists in creating more tailored experiences; many customers are increasingly concerned  as to whether their privacy is compromised. There are choices available for data-driven marketers that wish to preserve data privacy while targeting their consumers at a hyper-segmented level.

Following are the recommendations for ensuring Data Protection while being involved in the Digital Marketing :-

a) Establish trust with the Customer

Customers are more likely to believe in businesses that value their privacy and take precautions to safeguard their data. Building closer connections with the consumers and fostering greater loyalty can both be accomplished by exhibiting a robust commitment towards data privacy.

b) Abide by the laws and regulations

In various countries, there are stringent regulations governing the collection and usage of personal data. On failure to abide by these regulations, businesses may be affected intensively and may have to face hefty fines and severe reputational damage. The key is to maintain customer data privacy to avoid legal and regulatory issues.

c) Protect and maintain brand reputation

A data breach may lead to  grave consequences on the brand’s reputation. If a customer’s personal information is compromised upon, there is a greater risk of losing that customer’s trust at the cost of repute and money. Prioritising customers’ Data Protection  can protect your brand reputation and maintain customer trust.

d) Transparency in data collection and usage

Clearly communication is the key to all the problems. Creating a healthy communication environment with customers is very essential. One has to be clear on the grounds of what data is to be collected, how is it going to be used, and points to be vigilant about are, with whom do you share it with, who has the access and control. Providing customers with an assurance of safety, opt-in option for data collection, and making sure to honour their preferences is very necessary.

e) Data security

Its pivotal to establish a stringent data security system and to implement the same considering robust data security measures, such as encryption and two-factor authentication, to protect customer’s data from unauthorized access. Privacy and Security above anything.

f) Regular review and update of the privacy policy

With the changing trends, ensure that the privacy policy is up to date and specifically outlines the data collection measures, the use, and the practices. Regular review and updating of policy clauses are so needed to ensure compliance with the changing regulations.

ETHICAL V. UNETHICAL DATA PRACTICES

Ethical Data Practices

To ensure ethical data practices, businesses need to adhere to the following practices:

a) Transparency: Businesses should be transparent about their data collection and usage practices. This means clear communication with the customers regarding what data is being collected, why it is being collected, and how shall it be used. This can be done via privacy policies, cookie policies, and opt-in forms.

b)Minimalistic approach: This means collecting only that segment of data that is necessary and useful for the specific purpose and to ensure that it is accurate and up-to-date and carry out measure for safeguarding the same. Unnecessary data should be avoided to minimize the risk of data breaches.

c) Security aspect: Businesses must primarily prioritize the security of the customer data. Which can be achieved by executing apposite security measures such as encryption, firewalls, and access controls. Businesses should also ensure that their employees are highly professionally trained on data protection and privacy practices to reduce the mishandling mishaps.

d) Consent Clause:Businesses should obtain explicit, unambiguous and informed consent from the customers before gathering or sharing their data. This means businesses should be very clear and precise with the language in the consent forms and ensure that the customers are aware of their rights to withdraw the said consent at any time.

e) Privacy by Design:Businesses should integrate privacy clauses into all aspects of their data processing actions. This means considering privacy at the design stage of new products and services and ensuring that data is rightfully and timely deleted at the end of its lifecycle.

f) Accountability & assurance:Businesses should assure and hold themselves accountable for their data practices by executing regular audits and assessments of their Data Protection measures. This can also help in identifying potential risks and vulnerabilities and allow timely actions to mitigate them.

The ethics of data privacy in digital marketing setups are not merely legal and moral obligation for businesses but also a competitive advantage. By adopting such ethical data practices, businesses can build customer trust, enhance their reputation, and improve their marketing results. By doing so, businesses can create a win-win situation where they can benefit themselves with enhanced customer loyalty and trust while also refining their marketing results with effective targeting.

REGULATORY FRAMEWORK AND PRIVACY CONSIDERATIONS

The ‘Right to Privacy’ is not explicitly mentioned in the Indian Constitution. However, in the 2017 judgement of K.S. Puttaswamy v. Union of India [Writ Petition (Civil) No 494 of 2012], the Hon’ble Supreme Court held that the Right to Privacy is implicit in the Right to Life and Personal Liberty guaranteed under Article 21 of the Constitution of India, 1950. This judgement effectively made the Right to Privacy- a fundamental right in India. The Puttaswamy judgement has been a landmark precedent in the development of Privacy laws in India. It has provided a strong foundation for the development of Privacy laws and regulations that protect the right to privacy of the Indian Citizens.

Present laws in India such as the Information Technology Act, 2000 and its rules are implemented by companies in the following ways.

Reasonable security practices and procedures.

A body corporate must implement:

• reasonable security practices, procedures, and standards to handle Sensitive Personal Data or Information (hereinafter referred to as “SPDI”);
• a comprehensive documented information security program; and
• policies that contain managerial, technical, operational, and physical security control measures that are proportionate to the information assets it seeks to protect.

The Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules 2011define SPDI to mean personal information relating to a person’s:

• passwords;
• financial information, including information relating to bank accounts, credit cards, debit cards, and other payment instrument details;
• physical, physiological, and mental health condition;
• medical records and history; and
• biometric information.

Privacy policy: A body corporate must provide a comprehensive privacy policy to data subjects while handling SPDI. The privacy policy must include:

• a clear and effortlessly accessible statement on its practices and policies;
• the details on type of information to be collected;
• the distinct purpose of collection and use;
• the disclosure policy for the information; and
• the security practices and procedures the body corporate follows.

The body corporate must publish the privacy policy prominently on its website and make it readily available to data subjects.

A body corporate must have a data subject’s prior written consent before collecting or disclosing sensitive personal data or information. The consent may be obtained through a letter, fax, email, or any other mode of electronic communication and must indicate how the organization will use the SPDI. There are no specific provisions relating to obtaining consent from minors.

THE WAY FORWARD

1. Create a cross-functional team to lead the compliance programme: This group should provide guidance, oversee implementations, maintain a log of actions, and serve as a liaison between the organisation and the public and the data protection authority.
2. Assess impact and record: The risk to an individual as well as personal data in the event of misuse, unintentional disclosure, or breach, as well as the likelihood and ease of a breach occurring, should all be identified in the impact assessment along with mitigation strategies.
3. Audit of data flow: Keep accurate, thorough, and detailed records of your audit, including the data that was received, its use, recipients, and final disposition. These records will be useful to provide proof of compliance.
4. Forsee future data uses: Consider all potential applications for the personal data. Reusing data for any other project is permissible as long as it is rightly notified, the data principal beforehand that it could be used for other purposes.
5. Forsee unexpected uses: The best course of action is to take a “blue ocean” approach to all potential uses of the data in the future and to tell the data principals accordingly to obtain their consent.
6. Making users’ rights effective: To exercise a wide range of rights, systems may need to be modified. Such as, data principals may ask you to “port” the information you hold on to them to some other data provider, request updates or corrections, object to specific uses, or demand that all of their information be deleted.
7. Communicate: Inform the data principals about the procedure, the identities of the fiduciaries and processors, the time within which the data will be stored, (their rights, and so on, in plain, basic, succinct language.
8. Keep data safe: One is accountable for any data breaches, so get all data security systems in place.
9. Disaster planning for breach: Have ‘fire safety’ drills for data breach. It is vital to ensure that all processors and sub-contractors comply with the provisions of the Act.
10. Third-country data transfers: It is significant to also ensure binding corporate rules and codes of conduct to ensure safety and security beyond the borders, as well as to be compliant with any other applicable regulations.
11. Create an in-house privacy culture: This entails the commitment of every single individual; a culture of being continuously mindful of risks and not just benefits; constant monitoring and testing.

AMLEGALS REMARKS

Data privacy is a critical aspect of digital marketing that businesses must prioritise in order to build customer trust, compliance with regulations, protecting their customers’ personal data, and enhancing the customer experiences. By procuring consent, executing security measures, being transparent, minimising data collection, and providing options for data deletion, businesses can create an agile culture of data privacy that benefits both, the customers and the marketing houses.

It’s essential for businesses to understand that customers are becoming more aware of their Data privacy rights. To ensure the security of personal data, businesses must create policies and procedures and prioritise data privacy. Serious repercussions may follow on non-compliance, including fines, legal action, and reputational harm,

In summary, Data Privacy is not just a legal obligation, but it’s also an ethical and moral responsibility. Businesses must make sure to respect consumer privacy and foster trust as they continue to gather and use personal data to improve marketing efforts. Businesses may gain a competitive edge and deliver a great customer experience that increases customer retention and revenue by emphasizing data privacy.

-Team AMLEGALS, assisted by Ms. Nitya Joshi (Intern)

For any query or feedback, please feel free to get in touch with falak.sawlani@amlegals.com or mridusha.guha@amlegals.com