Miscellaneous 3 min. read

Why stricter data privacy laws will spur economic growth

Why stricter data privacy laws will spur economic growth

Data privacy is a contentious business. Your personal data is extremely valuable to corporations, and there’s an assumption that if they legally have the ability to collect and sell that data, their economic outlook will rise to new levels. However, that viewpoint shows a blatant disregard for online privacy as a basic human right. After all, individual internet users have rights—and corporations and governments have responsibilities to protect those rights.

Europe is taking the first steps

On May 25, the EU’s General Data Protection Regulation, or GDPR, started its attempts to clarify the data rights of individuals. This will certainly have positive impacts for people, but at what economic cost?

Though the GDPR is well-intentioned, the application of these regulations will change over time. The GDPR applies to any citizen of the EU. This causes issues for companies that do business across the globe, such as those based in the U.S. or Australia. How do they know if a person is really an EU citizen? Part of the GDPR is a person’s “right to be forgotten.” This means that a company must remove an individual’s data. But what happens when an EU citizen’s data is collected by a U.S. or an Australian company? That is yet to be determined.

Issues with data privacy

The GDPR, and all of the above complications, have made security experts realize that the issues with data privacy are deeper than we initially thought. How do we balance corporate competition and our desire as a nation to fuel economic growth with a need to protect our personal data?

For example: Imagine that one country has a policy where it denies any company access to the personal data of its country’s population; while another country has a policy where a company can access any type of data they want. Which society would you assume has an economic advantage?

The U.S. tends to lean towards the second scenario, while the EU leans towards the first.

Then there’s China. Currently, China’s policy is that the government can collect all of its citizen’s data. This, of course, comes with its own set of issues—none more important than a blatant disregard for human rights. But it does allow China’s companies opportunities corporations in other countries may not have.

In Europe, you would think that companies now lack these economical advantages; without access to the valuable data of potential customers, their revenue should suffer, right? In the U.S., the privacy of its citizens is often compromised by companies for economic gain. With the recent uproar regarding data scandals, however, this could soon change.

Herein lies the problem. Sure, eliminating privacy rights for corporate gain could, in theory, spur economic growth. But online privacy is a human right, and attempting to take away that right is likely to cause a severe backlash among consumers. And if consumers revolt (like the “delete Facebook” campaign), that economic boom may never occur. The end result is that corporations that exploit their users’ privacy will almost certainly end up with fewer customers—and therefore worse off financially. 

Data privacy isn’t just about maintaining people’s rights as an internet user. Corporations that uphold their responsibilities (rather than exposing regulatory loopholes at the expense of user privacy) gain consumer trust, and it’s that trust that will spur economic growth over the long term.

There’s still much work to be done as it relates to protecting our privacy and determining regulation that works for corporations, individual internet users, as well as governments alike. What’s clear, however, is that we must all shoulder responsibilities to protect our collective rights.

Because online privacy will, ultimately, benefit us all.

For tips on how to improve your personal online privacy, be sure to read our guide. And to take back control of your own privacy and download Hotspot Shield for free, click the button below.

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