What is privacy by design? A deeper dive into this GDPR requirement
Experts agree that integrating privacy principles into the development phase makes sense for businesses and their customers.
Privacy by design (PbD) is a pretty simple concept: Itâs essentially a procedural reminder to build user privacy principles into the development of a product or tool. Itâs also a key tenet of the European Unionâs upcoming General Data Protection Regulation (GDPR), a sweeping regulation that affects any organization with European users or members.
Privacy by design came into the popular lexicon in the 1990s, introduced by Ann Cavoukian, who was information and privacy commissioner of Ontario at the time. In 2012, the Federal Trade Commission began calling it a best practice for data privacy, along with transparency and simplified choice.
Why isnât privacy by design used by everyone?
One reason might be the persistent tug between creative freedom and rules that are seen to inhibit innovation.
âPrivacy by design is a really great framework from which to think about privacy and security because it looks at potential harms and asks us to consider what âcouldâ happen, and not just whatâs âlikelyâ to happen,â Fatemah Khatibloo, a principal analyst at Forrester told me.
âBut in engineering circles,â he said, âthe legacy thinking has been that privacy and security requirements stifle innovation. Badly secured data, though, has cost companies real and actual harms, and thatâs been a forcing function for design and engineering teams to embed security into products and services. We havenât gotten there with privacy â yet.â
PbD as a brand benefit
After several years of massive data breaches and calls for more transparency in ad tech, the notion of building tools with privacy in mind has become more appealing â a trend that not only protects the companies building these tools but offers a âsaferâ brand to advertisers and consumers.
âPbD is definitely gaining traction as a result of GDPR â but most marketers (and other business leaders) still struggle with the concept. Itâs really hard to get revenue-generating teams to think about PbD â or really, any risk-based approach to data collection and use â because thatâs just not how they are measured or compensated. Thatâs why we turn the idea on its ear and talk about PbD and contextual privacy as opportunities to build transparency and trust with customers,â Khatibloo said, explaining that contextual privacy is a business practice in which the collection and use of personal data is consensual, within a mutually agreed upon context, for a mutually agreed-upon purpose.
She shared the graphic below as an explanation of this concept.
Integrating PbD into the development process
Lewis Barr, general counsel and vice president of privacy at customer profile and identity management software Janrain, told me that companies should include PbD as a default.
âAny martech solution provider or consumer-facing organization that processes personal data regularly should develop privacy by design and default practices as a means of being more customer-friendly, building trust and reducing liability exposure,â Barr said. âAlthough it shouldnât take a government mandate to adhere to these principles, privacy by design is on track to become law anyway; GDPR is the culmination of an overall movement toward requiring privacy by design that started at the beginning of this decade.â
Ben Hoxie, director of product management at mParticle, said that companies should consider adding PbD to be a production decision.
âMy interpretation is to add an operational step and say, âdo we need this?'â Hoxie said. âAsk, âWhat do we need to complete or product, or add value, or run our business,â rather than say, âLetâs take everything and maybe it will be useful later.'â
âFor me, itâs really an operational piece, in the same way that a lot of companies have a security review process. Itâs a similar step to say letâs talk to the privacy department and make sure weâre doing this according to the law,â Hoxie said, adding that PbD should prevent companies from developing tools that collect data for dataâs sake.
âI think the intention behind that in the GDPR is to avoid companies hoovering up everything they could possibly gather and hoping to find a use for it later,â Hoxie told me. âThatâs what theyâre trying to get away from. Theyâre trying to make it so that customer data is carefully and diligently analyzed and assessed before itâs collected, and then it doesnât live forever.â
Janrainâs Barr said that with the advent of stronger privacy laws like GDPR, companies that donât implement privacy by design at the beginning of the development process will face a much harder task than if it was simply built in:
Today, we are entering the era of consumer privacy advocacy. Where a decade ago software vendors were enamored with emerging technologyâs ability to collect invaluable personal data unbeknownst to consumers, customers now want a say in how their personally identifiable information (PII) is collected and used. GDPR and similar regulations around the globe are amplifying their voice. Now, there will be a financial hit to a brandâs bottom line if it does not get data privacy right, in the form of a reputation hit or fines.
Unfortunately for vendors that didnât incorporate PbD into their designs from the beginning, itâs much harder to âretrofitâ existing applications than bake privacy by design into a product from the outset. It is not unlike auto manufacturers that didnât prioritize energy efficiency in the 1970s. When regulations and economics began to promote fuel economy in the 1980s and beyond, they found themselves at a disadvantage vis-a-vis competitors that built efficiency into their design.
Forresterâs Khatibloo said that PbD will be good for businesses and users.
âPrivacy by design is good business practice. And I think, in the not-too-distant future, that practices like privacy by design and contextual privacy will be trumpeted as proudly as âcruelty-freeâ and âAmerican-madeâ are in consumer products today. Marketers would do well to start shifting their data collection and use practices in that direction today,â she said.
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