The United States has a patchwork of overlapping and ever-changing data privacy regulations. While there is no unified federal privacy law, several pieces of legislation address particular data types or circumstances regarding privacy.
Without a comprehensive privacy law, it might be difficult to determine what safeguards are in place for the many types of personal information that firms handle or store. Even though there is no comprehensive privacy legislation, organizations that handle or store data are still responsible for keeping up with the most recent rules to ensure compliance.
This information handbook covers the main U.S. privacy rules and summarizes recent modifications and updates. You may also obtain a quick rundown of U.S. data protection laws by downloading this comprehensive fact sheet.
How are online privacy and security handled?
Online privacy and security laws are more difficult to govern than other forms of communication, such as physical mail. This makes individuals more vulnerable to invasions of privacy.
The relationship between internet security and deceptive advertising.
The internet has changed our lives and work in profound ways, giving us access to an infinite amount of information and contact. However, with this enhanced connectivity comes new concerns for privacy. Everyone’s life is now online, leaving a digital footprint of personal data that unscrupulous businesses or individuals may abuse.
Data privacy laws protect consumers by regulating how businesses can collect, use, and disclose sensitive data. The Federal Trade Commission (FTC) is the primary law enforcement agency for these violations in the United States. In recent years, the FTC has taken action against companies that have given false information to customers about their data security and privacy practices.
In 2012, The Federal Trade Commission (FTC) fined Google after they discovered that the company had been misrepresenting its privacy policies to users of its service. In 2018, FTC took action against Facebook for deceiving users about their ability to control the visibility of their personal information and reached a settlement where Facebook agreed to pay a $5 billion fine.
The FTC’s decisions in these cases established that it is willing to penalize companies that break consumer privacy laws. These examples also set a vital legal precedent for future internet privacy lawsuits — as more and more aspects of our lives move online, we need robust laws to protect our data from being exploited.
A side-by-side comparison of GDPR vs. CCPA and how U.S. and EU privacy laws differ from one another.
How do GDPR and CCPA differ from each other?
GDPR:
- This regulation applies to all organizations worldwide that process or monitors the data of EU citizens.
- Enforcement: Penalties are levied regularly against firms that break the rules.
- Ineffective enforcement: There is no need for a commissioner to supervise the operation.
CCPA:
- Narrow reach: This state law only applies to businesses that operate in California.
- Ineffective enforcement: Residents can bring lawsuits against unlawful firms if they feel their rights are being violated.
- Dedicated monitoring: A data protection officer must be appointed to ensure compliance.
The most comprehensive data security and privacy laws are in force in the United States and Europe; the EU’s General Data Protection Regulation (GDPR) went into effect in 2018, whereas the California Consumer Privacy Act (CCPA) took effect in 2020.
The GDPR and the CCPA, in particular, set stringent criteria for how service providers must handle personal data, including that data gathering be open, secure, and obtained with the informed consent of the individual. Individuals also have the right to know what personal information is collected about them and to access it if they so desire.
CCPA vs GDPR: the main difference is that GDPR applies to any organization processing or intending to process sensitive data of EU citizens, regardless of location. compliance with GDPR is mandatory for any organization processing the personal data of EU citizens, regardless if they are customers or not. There are also no revenue requirements or processing thresholds for entities when it comes to GDPR.
The CCPA only applies to businesses located in California. If an entity meets one or more of the following thresholds – annual revenue above $25 million, processing personal data of over 50,000 people, or acquiring at least 50 percent of their revenue from selling data – then this regulation affects them.
Because of these rules, GDPR has a greater scope and protection than CCPA. For example, under GDPR’s enforcement standards, service providers who break the rules face hefty penalties. In contrast, if a company breaches California consumers’ rights under CCPA, residents have the option of lawsuits for compensation.
Finally, GDPR requires firms to hire a data protection officer, whereas CCPA does not. While GDPRO and CCPA are strong data protection laws that give people extensive rights and protections, they do so in distinct ways.
Businesses must speak with legal counsel and carefully assess which regulations apply to them, ensuring conformity with each applicable requirement.
Laws in the United States that focus on privacy
Vertical and horizontal privacy laws are the most common types. Vertical privacy laws, for example, safeguard medical records or financial data, such as information about an individual’s health and financial status.
Horizontal privacy laws are concerned with how organizations use information, regardless of the context. Fingerprints, retina scans, biometric data, and other personally identifiable information like names and addresses are examples of data that would be covered by these rules.
While both vertical and horizontal privacy rules play an important role in safeguarding personal information, many people believe that vertical regulations are more effective since they are better at targeting specific threats.
The United States Privacy Act of 1974
The U.S. Privacy Act of 1974 was created to better protect individuals’ privacy, by setting guidelines for how U.S government agencies can collect, use and share personal information. Some examples of the rights covered under this rule are:
- The right to ask for access and correct data if necessary: U.S. citizens have the legal right to view the personal information held by government agencies and make changes if they feel it is incorrect.
- Government agencies allow users to access data based on their company position.
- Individuals must have the right to information about how their data is being utilized.
HIPAA
The Health Insurance Portability and Accountability Act (HIPAA) was set into law in 1996 as a way to protect individuals’ medical information. PHI is defined as any kind of health information, and it applies to healthcare providers, hospitals, and insurance companies that share this type of sensitive data. When HIPAA-regulated entities share PHI with covered businesses or organizations, the individual has the following rights:
- Healthcare providers can use patient data for specific purposes, such as treatment and payment. However, they need explicit permission from patients to use their data for marketing activities.
- A healthcare provider must offer a patient notice of privacy policies that specify how the provider will utilize and safeguard the patient’s data. Patients have the right to demand that their healthcare providers restrict how they use and disclose their personal information.
- If patients feel that any of the information in their medical records is wrong, they have the right to update it.
COPPA
In 1998, to protect the online privacy of children under 13, Congress passed the Children’s Online Privacy Protection Act (COPPA). This act applies to any website or online service that collects, uses, or discloses personal information from minors. To adhere to COPPA standards and protect children’s privacy, websites and online services must take the following steps:
- Parents should only allow their children to use websites that have a privacy policy in place post explaining what information will be collected from kids, how it will be used, and when it will be disclosed to third parties.
- Before collecting, using, or disclosing personal data from children, obtain explicit parental consent.
- Parents should be allowed to review and delete their child’s personal information.
GLBA
The Gramm-Leach-Bliley Act (GLBA) was passed by the US government in 1999. This legislation safeguards customers’ privacy and applies to any financial organization that gathers, uses, or discloses personal information. Financial institutions must do the following to safeguard consumers’ privacy:
- We understand that data privacy is important to our customers, so we explain our information-sharing practices and allow them to opt-out of sharing their data with third parties.
- Established guidelines protect customer data for all financial institutions. This includes information collected online.
- To keep customer information secure, develop and adhere to a written security plan.
New data privacy rules have been implemented in the United States.
Individual privacy laws in the United States differ by state, as some states have legislations that guarantee privacy rights, while others have none. The following are examples of individual state privacy legislation that has been signed and proposed:
California
In 2020, California voters approved the State Privacy Rights Act (CPRA), an amendment to the CCPA, in a ballot initiative. The CPRA gives Californians additional privacy rights, including the right to know what personal data entities are gathering about them and whether businesses are selling their data.
Colorado
Starting July 1, 2023, the Colorado Privacy Act will go into effect. This legislation requires businesses to inform customers about their data gathering and sharing practices and gives Coloradans the option to decline their personal information. The law also establishes stiff fines for firms as well as allows the state attorney general to bring enforcement actions.
Connecticut
The Connecticut Personal Data Privacy and Online Monitoring Act applies to any company that collects personal information from residents of the state. The law establishes data controller and processor protection standards as well as security requirements for protecting personal information.
Maryland
Maryland’s Online Consumer Protection Act protects residents from becoming victims of various cyber crimes, like data breaches, theft, phishing scams, and spyware infections. Although this law has many similarities to protections offered in other states, Maryland goes above and beyond in some respects.
Maryland law, for example, requires businesses to take precautions against unauthorized access, use, or disclosure of consumers’ personal information. The law also entitles consumers to opt-out of having their personal information collected, used, or sold if they so choose.
If you are a business, and you collect, use, or disclose any personal data from Marylanders – even if your company is based out-of-state – this act applies to you. This includes businesses that sell goods or services to locals.
Massachusetts
The Massachusetts Data Privacy Law is a set of regulations businesses must follow when handling personal information. The law applies to all organizations that hold, use, or disclose data about Massachusetts residents.
The law outlines several requirements for companies that collect customer data, such as needing consent before use and taking steps to protect the information. Additionally, corporations must be transparent about how they utilize collected data and allow consumers to opt-out of certain uses. Lastly, it is vital that businesses only gather accurate and current customer information.
New York
The New York Privacy Act (NYPA) is one of the most comprehensive acts in the United States that regulates data privacy and security. This legislation establishes tight standards for how businesses handle customers’ personal information, as well as introduces new rights for consumers regarding their data. Businesses doing business in New York state are affected by the act, which helps ensure that all residents have access to their personal information. The following are some important elements of the privacy law:
- Consumers must be informed about how their personal information is used. Companies that collect, use, or sell consumer data must disclose what kinds of data they capture, utilize, and sell as well as why they’ll utilize the information.
- This legislation provides a private right of action and civil penalties for violations.
Virginia
The Virginia Consumer Data Protection Act is brand-new legislation that will go into effect on January 1, 2023. Businesses will be required to take reasonable measures to safeguard consumer data privacy, confidentiality, and integrity under this law.
If your business collects, uses, or discloses the personal information of 100,000 or more Virginia consumers OR if 50 percent or more of its revenue is from the sale of consumer data, then this new law applies to you.
Virginia residents have the right to access their data and request that it be corrected if it is inaccurate, under this law.
State-by-state comparison of U.S. privacy laws
The laws regarding data privacy vary considerably from state to state. Some states, like California, New York, and Massachusetts have laws that cover any company doing business in the state- regardless of whether they have an office there. In comparison, Maryland’s law only applies to entities with a physical presence in the state. Also, while some privacy laws only apply to businesses making more than $25 million annually- this isn’t true for all states.
What privacy rules apply to me?
Although the state and federal privacy legislation environment may appear complex, there are several simple methods to figure out which rules apply to you and your business. Consider your company’s structure:
- Talk to your compliance partner and get a clear understanding of which state and federal rules apply to your company.
- Depending on the industry, various U.S. privacy laws may apply, from healthcare to retail to financial services. With help from a compliance partner, you can research and discover which standards are specific to your industry to ensure that you’re meeting HIPAA requirements as well as those set by the Financial Industry Regulatory Authority and other relevant organizations.
- Size: If you store sensitive or private data with a third-party cloud service provider or entity, make sure their security measures don’t jeopardize your compliance.
Using these criteria, determining which privacy standards apply to your company may be a relatively simple process.
Find out more about US Privacy Laws
Frequently asked questions regarding data privacy
The following are some of the most frequently asked data privacy issues.
Q: What are the primary differences between privacy laws in America and Europe?
A: The most significant distinction is that the EU does not have a single, comprehensive federal privacy legislation, as opposed to the United States. Instead of having a single, comprehensive federal privacy law like GDPR in the EU, the United States has a patchwork of federal and state regulations that provide varying degrees of protection for individuals’ personal information.
Q: What are the key points of federal and state privacy laws in the United States?
A: Although most U.S. privacy laws have similarities, such as needing consent before collecting personal data and implementing security measures, there are key distinctions between the regulations. Consequently, you must review the specific requirements of each law to make certain your company complies.
Q: What are the penalties for breaching U.S. privacy laws?
A: Depending on the law, violating U.S. privacy laws could lead to entities owing fines or other penalties. Also, in some instances, consumers may possess the right to sue companies for compensation.
What will data privacy laws look like in the future?
Given that an ever-growing amount of private and sensitive data is transferred digitally each year, it becomes more critical to understand the laws designed to protect our privacy. In America, internet privacy laws are still developing, though they offer a robust foundation for safeguarding personal information. Along with this trend, citizens can anticipate that more states will pass thorough privacy laws in the future; likewise, there is potential for the federal government to enact legislation providing broad nationwide protection for consumers’ data.
Staying up-to-date with the latest security controls and data privacy developments is key to safeguarding your personal information. Additionally, deploying data loss prevention and threat detection solutions can help you protect your data and ensure compliance with privacy laws.