Consumers Respond to Data Privacy Regulations
After years of seemingly unending data privacy violations, governments around the world have begun enacting regulations intended to bolster personal privacy in the digital age. Most prominently, in 2018, Europe’s General Data Privacy Regulation (GDPR) set a new standard for data security, prompting companies around the world to take the issue more seriously by instituting financial penalties against organizations that fail to protect their customers’ data. In the US, California’s Consumer Privacy Act is scheduled to go into effect on January 1st, 2020, bringing comprehensive regulation to the US and further promulgating the legal ramifications of data security standards. In total, 58% of all countries have some form of privacy regulations on the books, and another 10% are drafting legislation. These laws are intended to support rapidly shifting consumer sentiments that value data protection and personal privacy, two priorities that have gone wildly adrift in the digital age. Unfortunately, despite their best intentions, there is growing evidence that privacy laws aren’t improving consumer confidence in data security. In response, every company should be mindful of this attitude, as it will inevitably shape the business landscape for years to come. Consumers Don’t Trust Companies Until recently, digital platforms participated in a quiet arrangement with their customers who gained free access to platforms in exchange for copious amounts of personal data. Today, that information is some of the most valuable in the world, often compared to digital gold, which companies deploy to provide targeted advertising and other personalized services that drive their bottom lines. However, today’s consumers are well-aware of this arrangement, and many are fighting back. For example, after Facebook’s now-notorious Cambridge Analytica scandal, nearly half of users aged 18 – 29 deleted the app from their phones, signaling a distrust of the platform’s data management standards and disgust with its practices. Moreover, after a data breach, 81% of consumers indicated that they would stop engaging with a brand online, and many consider cybersecurity a prerequisite for making purchases.