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  • What Is the Difference Between Data Compliance and Data Privacy?
Nov 28, 2022

What Is the Difference Between Data Compliance and Data Privacy?

Data compliance and data privacy are essential when working with user data. Find out more about how data compliance and data privacy are different.

When putting out an app that stores customer or user data, it's crucial to consider data compliance and privacy. But sometimes, people get these two parts of data management wrong. This article will explain how data compliance is different from data privacy.


What is Data Compliance?

Data compliance means that you must meet specific legal requirements when you collect, process, and store data.

The General Data Protection Regulation says that companies with customers in Europe, for example, must follow its rules (GDPR). This legal framework lets people see what information a company has about them, object to how the company uses that information, and ask the company to delete it. Also, the California Consumer Privacy Act says that companies with customers in California must follow its rules (CCPA).

The Health Insurance Portability and Accountability Act (HIPAA), the SOC 2 auditing framework, and the ISO/IEC 27001 standard are all examples of other compliance frameworks. This could include a set of rules, procedures, and audits set up by the company to ensure that data is being used correctly.


What is Data Privacy?

Data privacy relates to keeping sensitive data private and confidential. Keeping data private is a practical and technical issue, and data compliance is the legal part of data management. A privacy program's goal is to protect data privacy and ensure that only authorized users can see data based on their need to know. It has things that a standard compliance program doesn't have.

Data privacy rules usually apply to any personally identifiable information (PII), which is any information that can be used to find out who someone is. PII can be social security numbers, email addresses, IP addresses, etc. Even if it's not required by law, companies that want to protect the privacy of their customers' data should take steps to keep it secret. This helps protect the privacy of the people to whom the data belongs. Data privacy means putting in place ways to make sure that only people who are allowed to can access data.


Storing Sensitive Data

One common misunderstanding about data compliance and privacy is that a company can't use third-party tools to store its data and must instead use "in-house" solutions. This is not true. A third-party tool may have robust access control and security thoroughly audited by third-party frameworks like SOC 2 and ISO/IEC 27001. On the other hand, an "in-house" data store that lets many employees access it with a single root password and doesn't have firm audit logs could be far from compliant.

Instead, engineers must evaluate tools (both internal and external) to make sure that the suitable mechanisms are in place to meet security and data compliance standards. If a company doesn't secure its internal tools as well as it does its external means, the risk of a data breach goes up.


Compliance is Just not an Engineering Concern

Legal and operational frameworks include GDPR, SOC 2, and others. Even though they significantly affect engineering, these frameworks affect all of a company's operations, including legal, sales, and support. If one business wants to work with another, it will need legal paperwork to make that happen. Setting up a "secure" environment in AWS doesn't mean that you're SOC 2 compliant. Data storage "in-house" does not guarantee GDPR compliance without additional steps from teams like support and sales.

Data Processing Addendums (DPAs) are legal documents that businesses can sign to outline the parameters under which personal information is processed and protected between them, as needed by the General Data Protection Regulation (GDPR). It will say who is in charge of the data, who is in charge of the data, how the data is processed, SLAs, what to do if there is a breach, and so on. The agreement should cover all information that could be considered PII and ensure it complies with the relevant compliance laws.

Using GDPR as an example, this means that there needs to be a way for people to access their data, object to it, or ask that it be deleted, no matter where it is stored.


Keeping Data Private

Whether data is housed in a third-party tool or in-house, just because you comply with GDPR or SOC 2 doesn't guarantee it's private. The practice of data privacy is the art of doing all possible to protect the confidentiality of customers' personal information, even when doing so goes "above and beyond" compliance regulations.

Protecting sensitive information can be done in a few different ways. For instance, if you're utilizing the Moesif platform, you may implement Role-Based Access Control with its privacy rule feature to limit who can see certain fields based on their specific role (RBAC). If you work in technical support, you may want to restrict access to any PHI (Protected Health Information) or sensitive HTTP headers. In contrast, an analyst may require additional access fields for reporting.

Client-side encryption is an increasingly popular method of protecting sensitive information and lowering the likelihood of data breaches. With client-side encryption, you may protect sensitive information by hiding the encryption keys in a secure location and giving only a select few people access. Even if engineers who manage the data storage and processing infrastructure wanted to examine the data, they couldn't go without the encryption keys.


Rest Easy

Data compliance and privacy are important and serious topics affecting everyone in an organization who works with sensitive or customer data. Legal, operations and engineering should all work together to ensure that regulations are followed. Also, companies should try to protect their data even more than compliance frameworks require. This can be done because it's the right thing to do with data or to limit the damage from a data breach. Understanding the difference between the two is the first step to feeling less stressed about the whole thing. Hopefully, this article has helped you do that.


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