Understanding Data Privacy and Data Privacy Audit Procedure

What Is Data Privacy?

Data privacy audit implies analysis of data protection policies and procedures of a company for risk assessment. Before getting into details, it is crucial to understand the basics of data privacy. What is Data privacy? Well, to put it in simple terms, data privacy is the discipline concerned with ensuring that the transmission of data by means of technological systems and networks is protected at all times from unauthorized parties. As defined by the Electronic Communications Privacy Act (ECPA), data protection is “the legal ability… to ensure that the privacy of communications practices is preserved…”.

Information security is another branch that is very closely related to data privacy as is security. Both branches share some regulations regarding how to manage data in a way that it will be protected from unauthorized use. There are many regulations pertaining to data security and privacy and these regulations are essential to the safe keeping of any data system.

From international perspective, a major component of this legislation is the Fair and Accurate Transaction Act (FATA). This act was enacted by the United States Congress and the Facilitation for Business Data Protection Act (FBA) was signed by President Bush in October 2021. The main thrust of both the legislations is to regulate the use of personal information for security purposes. Apart from this, other legislation includes, the Security and Accountability For Every Port (SAAP) Act, Sarbanes-Oxley Act, Foreign Intelligence Surveillance Act (FISA), Fair Credit Reporting Act, and Privacy and Credible Sources Act.

There are also many international laws that are linked to this topic and these include the European Communities’ Data Protection Regulation (the “DPA”). Other significant international laws dealing with this topic include the European Communities’ E-Commerce Directive, European Union Intellectual Property Rights Law, and the Information Technology Transfer Agreement. The Agreement on Trade Related Aspects of Intellectual Property Rights is another important source of data privacy legislation worldwide. The International Standard Organization for Standardization (OSI) is one more important organization that shapes the rules and regulations governing data privacy.

In the past years, privacy has been a rising concern for companies and people all across the world. Privacy violations and poor data handling processes have immediate monetary consequences for companies and present a substantial risk to a company’s prestige and consumer satisfaction. Considering these factors, today, any institution must guarantee that they possess a proper set of privacy systems to regulate market and employee privacy and social media. They are frequently instructed to perform in-house teaching schemes to guarantee that all workers are familiar with their responsibilities under privacy legislation and the company’s codes. These measures give the management a reality check on the business’s processes and whether they obey the agreements made in the privacy codes on the assembly, usage, warehouse, disclosure, and removal of private data. They must understand where their private data is reserved and whether the passwords and other technological, manual, and executive security criteria set to preserve private data, are acceptable. There must be a limited passage to this private data to those workers with a need to know and permission of any identifiable person whose name, resemblance, impression, or other private data is utilized in advertisings, sites, and other outer or promotional substance.

Write to us now

Blockchain Consulting

data protection law firm

Compliance and Privacy Audits

The preliminary phase to guaranteeing that a company obeys all relevant laws, and has a fixed policy to satisfactorily safeguard private data, is a Privacy Audit. This enables the company to recognize what data it accumulates, and how it utilizes, reserves and disposes of such data. At a minimum, a preliminary privacy audit must contain an examination of how private data is collected, be it through electronic messages, online websites, paper documents, Social Media outlets, personally, or through Images and Photographs/videos. The audit must record the kind of private data accumulated by the company, and if it is collecting highly sensitive data including medical data, financial statements, biometric evidence, or inputs that can be utilized for identity fraud (e.g., Social Insurance Numbers). Also, the private data so collected not only ranges from the name of the customers/clients, employees, service providers, members of the community, and other third parties, but also the means through which this data is monitored. The latter includes computers, telephones, videos, GPS, or another location tracking, RFID, and biometric. Once these elements are identified the natural next step is to inquire about the medium in which the private data is stored and the form in which it is stored, such as paper records, electronic records, video recordings, and verbal recordings. 

With this data, the company does put in place rigid security measures to protect them, however many times these measures. While some companies engage in physical protections, more modern enterprises choose to invest in technological protections and administrative protections. The only difference between these measures is the ability to access the data and how it is protected from external hacking. The company must identify how the private data is accessed, be it internally or externally. The audit must establish how the company uses the data it collects, the purpose for which it is used, and how it is used. It must account for the entities to whom this private data is disclosed including possible contractors with their location. Every contract must include a strong data protection code and categorically state the data is that can be disclosed to associates, with their purpose and the location where it is disclosed. The company must compile all the consents given for the collection, practice, and exposure of private data whether written, verbal, or implied. This consent must be stored/managed and entities must be allowed to revoke said consent whenever necessary. 

Considering third-party data-sharing agreements, the audit must record whether proper privacy measures are in place, based on the sensitivity of the data. Where any private data is transmitted across borders, the objective of such transmission, the security measures considered and their privacy implications must also be examined. Overall a company must have appropriate privacy strategies, including a commercial privacy strategy, a web privacy strategy, an employee privacy strategy, a social media strategy, a record retention strategy, a work from home protocol, a technology usage strategy, and others. These policies must be regularly reviewed/updated and the privacy impact of new projects must be evaluated through formal privacy impact assessments that can include Informal consultations and certain officers involved in the assessments/consultations. The company must provide privacy training to employees including new hires, role-specific training, and periodic updates. Lastly, the audit must also document the period for which the company retains the private data and how it disposes of it. These records and not expected to be comprehensive. 

Privacy audits must be precisely designed to the distinct needs of each business and its administration. Companies must consult with a Privacy Law Expert to support the growth of the company’s privacy audit. Also, privacy audits must not be a “one-time” undertaking, but rather, be executed periodically to examine business and possible legal advancements. It is especially necessary to execute a revamped, targeted audit when the company launches a different project that will pertain to the distinctive compilation, practice, or revelation of private data by the company.

Read About Patent FIling Guide 

Level18,One Horizon Center,
Golf Course Road
DLF Phase 5,Sector 43

The Bar Council of India restricts any form of advertisements. This blog contains general information for the convenience of readers and does not purport to dispense legal advice and is not intended to solicit or advertise in any manner.
Gurgaon,Haryana 122002

No Attorney-Client Relationship
The use of our blog, and the sending or receipt of information via this platform does not create an attorney-client relationship between you and us.