Data Collection: Privacy Concerns and Regulation

08/15/2023

Collecting data has become standard today as marketers use it to better promote their products. Efforts to better personalize ads have proven to be immensely successful, to the point of it becoming an expectation. But many aren’t fully aware of how much data companies collect on users, or how much gets passed around between third parties. And there isn’t much regulation on how much they can collect or what they can or can’t do with that data, which is how we got to where we are today.

With cybercrime only increasing in recent years, users want to make sure their data is safe. Generally, the more data you collect, the more personalized the ads will be. For marketers, more data collection makes up for better ads. But the increase in hacks has been too much for people to ignore. And it’s only revealed how easy it has become for criminals to hack people and how vulnerable their information can be. So, it only makes sense that many are asking for lawmakers to add more regulations when it comes to data collection and consumer privacy.

Current State of Data Collection

Advertisers everywhere have been digitally collecting data from customers for years now. But there are two major concerns over the amount of data companies collect: privacy and potential leaks. Most users don’t know how much of their data gets collected, nor do they know what they’ll do with it. That’s for a reason; companies prefer keeping their data practices discreet, especially for data they have no immediate use for. While this data they’re not immediately using may not be valuable today, companies argue it could be someday. At the federal level, there is no specific legislation that protects users’ data. But the Federal Trade Commission (FTC) has the power to protect customers from unfair or deceptive data collection practices. And they do so by enforcing federal privacy and data protection regulations.

The lack of regulations at the national level hasn’t stopped individual states from enacting some privacy laws of their own. Specifically, California, Nevada, and Maine have more comprehensive laws compared to those from other states. These privacy laws include the right of consent for their personal information, the right to request companies and third parties to delete their information, and the right to opt out of companies collecting or selling their data to third parties. On the other side of things, companies have stricter guidelines because of these laws, which include disclosing the kinds of information they’re collecting, what they intend to use that data for, and publicizing the identity of third parties, among other restrictions.

What This Means Now

Data collection practices have improved over the years as people learn more about how to keep their information safe from cybercrime. And with users demanding more transparency, more companies are complying by sharing more about their data collection practice. But it hasn’t reached the point of creating federal privacy laws; they are still only at the state level. Because of that, companies can still use, share, or sell any data they collect from customers without notifying them in most states. There also aren’t any national laws about notifying users about breached data due to leaks or other data exposures, nor are there any about third parties further selling users’ data.

In the last few years, people have realized that they aren’t as protected online as they thought. And it has just strengthened the need and desire for privacy laws at the federal level. This is a growing attitude businesses should be aware of, and the hope is, is that it will inspire more companies to be more transparent about how they collect and use customer data.

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