The GDPR revolutionized the data privacy world, setting the framework for businesses to create strategies to protect personal data. The regulation introduced seven principles of data protection, including:
- Lawfulness, fairness, and transparency.
- Purpose limitation.
- Data minimization.
- Storage limitation.
- Integrity and confidentiality (security).
If you’re doing business with residents or citizens of the EU, you must implement all seven principles into your data privacy strategy. To assure your compliance with the GDPR, you first must understand each tenet of the data privacy regulation.
Today, we’re taking a deep dive into the 3rd principle, data minimization. The GDPR isn’t alone in requiring data minimization. The CPRA includes it, too.
You’re probably wondering: What is data minimization? How can compliance with the data minimization principle benefit my business? How can I ensure compliance? In this blog, we’ll answer all of your questions and offer easy-to-implement solutions to guarantee your compliance.
What is data minimization?
Article 5(1)(c) of the GDPR defines data minimization by saying that personal data should be “adequate, relevant and limited to what is necessary in relation to the purposes for which they are processed.” In other words, businesses should only collect essential information and only keep it as long as it’s actually needed.
The GDPR doesn’t define “adequate, relevant, and limited,” but it does require that the information be “necessary” for processing. If your business holds information it doesn’t use for processing, you need to assess the data you collect and how you use it.
While you may believe that it’s helpful to hold lots of data on your customers, the data minimization principle encourages a minimalist approach. As long as you have the data needed to complete necessary tasks, less is more.
How does data minimization benefit your organization?
When it comes to data, some businesses save everything. Like a bad episode of “Hoarders,” personal and non-personal data can be found scattered across systems, never to be processed.
While privacy laws like the GDPR and CPRA require businesses to implement data minimization practices, the benefits go beyond compliance. Data minimization benefits include:
- Saving money by reducing data storage.
- Reducing your ecological impact by saving energy.
- Increasing processing speed.
- Limiting consequences in case of data loss or breach.
- Building trust with customers.
Collecting data is expensive. Your business incurs the cost of data storage, collection, analysis, and maintenance. Aside from the dollar amount, storing and processing data requires energy. Cut costs and energy usage by culling all unnecessary data. As a reward, your processing speed will improve, and the time needed to process data will decrease.
Imagine getting fined for a data breach that includes information you never needed in the first place. Limiting the data you retain on customers can reduce your financial liability if a breach occurs.
How to comply with the data minimization principle
In case of severe violations of the GDPR, the penalties are substantial. Organizations can see fines of “up to €20 million, or 4% of the firm’s worldwide annual revenue from the preceding financial year, whichever amount is higher.”
Businesses that commit less severe infringements aren’t off the hook. Companies committing these infringements may be fined “up to €10 million, or 2% of the firm’s worldwide annual revenue from the preceding financial year, whichever amount is higher.”
The severity of fines depends on several factors, including history, data category, preventive measures, and intention. Compliance with the data minimization principle takes time, but it’s time worth spending. Follow these steps to adhere to the data minimization strategy and reduce your risk:
- Determine the “adequate, relevant, and necessary” data to collect from customers, and only collect what is necessary.
- Know who uses the data and for what purposes.
- Only use the data for necessary purposes.
- Share only when necessary, and share the least amount of information possible.
- Understand where the data is stored.
- Always get consent when collecting data.
- Make it easy for customers to access, modify, or delete their data.
- Delete data when it is no longer necessary for processing.
Because penalties are steep, getting your data minimization strategy right is vital. To discover whether your business complies, answer these four questions:
- Is the personal data we collect necessary for processing purposes?
- Does the personal information we hold fulfill those purposes?
- Have we recently reviewed the data we hold?
- Do we delete personal data that is no longer relevant?
Did you answer “yes” to all four questions? If so, you’re on the right path to compliance with the GDPR’s requirement for data minimization, meaning you’re minimizing your risk for financial penalties.
Osano can help
Most businesses hold more personal data than they realize. To ensure the data your company holds is “adequate, relevant, and limited,” you must have a complete picture of the data and understand its purpose.
We created Osano’s Data Discovery platform to make your data easy to find and understand. Our AI-driven technology searches multiple systems to discover the information you have, where it lives, and who has access to it so that you can make important decisions about data minimization. Sign up for a free 30-day trial, and find out how easy it is to track your data with Osano.