As a startup or small business, you’ve got a lot of things to worry about. You spend hours perfecting your marketing approach, developing your brand, and putting together an effective business strategy. But one of the most important things you may be neglecting is online data privacy.
Over the years, many states have implemented online data privacy regulations. As a business owner, it’s your duty to stay up to date with these laws and protect your customers. Failure to do so will not only affect your reputation but can destroy your bottom line. For startups, there are a few things you need to know about data privacy laws.
1. State, Local, and International Data Privacy Laws May Apply
If you think that just because your business is based out of New Jersey, you only have to worry about New Jersey laws, think again. Most of the time, data privacy laws are based on where the consumer is, not the company.
Take for instance the Delaware Online Privacy and Protection Act. The law prohibits businesses from marketing certain material and products to minors. While a Delaware law, it applies to any business who markets to Delaware residents, essentially barring this type of activity from all online business. If you provide services or sales to international clients, you’ll want to make sure you understand Europe’s General Data Protection Regulation, more commonly known as GDPR.
2. Data Privacy Laws Affect All Industries
No startup or business is immune to data privacy regulations. Even if your state doesn’t have any specific laws regarding online data privacy, other rules may apply. For example, if you’re in the medical field, you have to comply with federal HIPPA laws. This means you can’t share patient data online, or in person. For financial industries, the FRCA (Fair Credit Reporting Act) may apply.
3. It’s Not Just About What You Collect, It’s About What You Do With It
The Electronic Communications Privacy Act (ECPA) is one of the longest standing laws regarding data privacy. While the act was initially designed for hardline telephones, additional legislation has passed to keep up with changing technology. These laws address who can access, store, and disclose certain information.
4. Violations Can Have Big Consequences
Ignorance or inexperience is not a defense for violating a customer’s data privacy rights. Businesses who don’t take these laws seriously can face serious consequences, including:
- Fines and penalties: If you think you can get away with just a warning, think again. Some laws come with serious financial penalties. For example, a business violating COPPA, a federal law allowing parents the right to choose that kind of data businesses can collect from children, can result in a $42,530 fine.
- Personal lawsuits: Consumers take online privacy very seriously. A breach of privacy can lead to fraud, harassment, and additional security costs. In some cases, your customers may be able to file a claim for damages against your company or may even initiate a class action lawsuit.
- Bad PR: When you’re first starting out, a brand is everything. A data breach can cause serious damage to your company’s reputation. Once the damage is done, it’s nearly impossible to undo.
Protect Your Startup & Business
Data privacy rights are not going anywhere. In fact, the focus on consumer privacy is only going to increase (rapidly) in the next few years. As a startup and business owner, it’s important to protect yourself and your online business. But doing so can be a challenge, even for the most experienced business owners.
As the laws change, you will have to continue to stay up to date. Don’t put your business at risk. To learn more about online data privacy regulations and whether your business is in compliance, contact the internet attorneys at Brown & Blaier, PC.
Fill out our online request form to schedule a free consultation, today.