In the third research article curated by DPO Club, the authors, eminent DPO Sherazad Boomla, reputed security, risk and governance leader, Pawan Raviee, noted privacy professional, Amar Kewlani and Shivang Mishra delve into the significance of Privacy by Design, its principles, and practical implementation steps to ensure robust data protection, compliance, and enhanced user trust in digital product development.
This article was reviewed by reputed leader in IT advisory and consulting, Himanshu Gautam, esteemed privacy and security professional, Shashank Karincheti, and reputed privacy professional, Akarsh Singh.
Introduction
It has not been widely accepted that applications (apps) which prioritize privacy have higher user satisfaction and consumer retention, and a lack of emphasis on privacy often leads to lower retention.
In today's digital age, privacy is crucial to protect personal information from misuse, ensure online security, and maintain individual autonomy. It guards against identity theft, cybercrimes, and data breaches, preserving trust and freedom in an interconnected world where data is constantly collected and analyzed.
Privacy by Design (PbD) is a proactive approach to embedding data protection and privacy considerations into the design and operation of systems, products, and processes from the outset. It emphasizes privacy as a fundamental requirement rather than an afterthought, fostering trust and compliance with privacy regulations.
In practical terms, Privacy by Design entails integrating privacy features into every stage of development, implementing robust data protection measures, and ensuring user-centric control over personal information.
Privacy by Design is not the same as Privacy by Default. Privacy by Design is the overall idea: integrate privacy into everything that is built. On the other hand, Privacy by Default ensures that the strictest privacy settings are automatically applied to users, requiring them to actively change settings for less privacy.
For example, a social media platform implementing Privacy by Design would build privacy features into its architecture, while Privacy by Default would set user profiles to private by default, requiring users to opt-in to share information publicly.
Privacy by Design varies between B2B and B2C products, requiring tailored approaches rather than a one-size-fits-all solution. The distinct nature of business-to-business and business-to-consumer interactions necessitates unique considerations in designing privacy features. While B2B products may prioritize data security and confidentiality for corporate clients, B2C products may focus on user consent and transparency.
One of its core principles to be kept in mind is the concept of "positive sum, not zero-sum." This means that achieving strong privacy shouldn't come at the expense of functionality or other important goals. It's about creating a win-win situation. Strong privacy should enhance functionality and vice versa. The aim should be to create a better overall experience.
Key Points
It is essential to acquaint oneself with the seven foundational principles of privacy by design which are as follows:
1. Proactive not Reactive: Privacy is considered throughout the entire lifecycle of a system, not just as an afterthought.
2. Privacy as the Default Setting: Systems are designed such that privacy-protective settings are the default.
3. Privacy Embedded into Design: Privacy considerations are integrated at the outset of design, not bolted on as an afterthought.
4. Full Functionality: Privacy enhancing technologies strive to deliver full functionality while minimizing the disclosure of personal data.
5. End-to-End Security: Security measures are applied throughout the entire data lifecycle to protect personal data.
6. Visibility and Transparency: Users should be informed about how their data is being collected, used, disclosed, and protected.
7. Respect for User Privacy: User choices regarding their data should be respected.
Another important thing to remember, is data protection by design. Data Protection by Design incorporates privacy considerations throughout the entire development lifecycle of a system, ensuring personal data is protected by default and users have control over their information.
PETs are connected to the idea of 'data protection by design' and are thus pertinent to the technical and organizational measures put in place. They aid in effectively implementing data protection principles and incorporating essential safeguards into data processing activities.
Why Privacy-by-Design?
Privacy by Design is crucial due to the increasing risks of data breaches and privacy violations, which can lead to significant financial and reputational damage. Legal and regulatory requirements, such as the GDPR, mandate stringent privacy protections to safeguard personal data.
Implementing PbD ensures that privacy is integrated into the development and operations of systems from the outset, rather than being an afterthought. This proactive approach not only helps in achieving compliance with regulations but also fosters increased user trust by demonstrating a commitment to protecting personal information.
Moreover, it enhances the overall security posture of organizations, reducing the likelihood of costly breaches and the associated fallout. Thus, Privacy by Design offers a strategic advantage by aligning with legal standards and meeting the expectations of privacy-conscious consumers.
Typical Implementation of Privacy-by-Design
The implementation of PbD would require the following essential steps:
1. Identify Privacy Requirements: Assess legal and regulatory requirements, and define organizational privacy goals to understand specific data protection needs and compliance obligations.
2. Set Up Workflows & Gating Process: Establish workflows to involve privacy teams at the Product Requirement Document (PRD) stage, ensuring early integration of privacy considerations.
3. Document & Implement Privacy-Friendly Systems/Microservices: Develop systems with built-in privacy features, ensuring compliance with privacy standards and creating architectures that protect user data.
4. Embed Privacy Team into Release Management Process: Integrate the privacy team into the release management process to conduct privacy reviews during release cycles and maintain privacy standards.
5. Invest in PETs/Privacy Tools for Workflow Management: Utilize Privacy Enhancing Technologies (PETs) and tools to automate and manage privacy workflows, enhancing efficiency and effectiveness.
6. Post Implementation Reviews: Conduct post-implementation reviews, audits, and assessments to evaluate and improve the effectiveness of privacy measures continuously.
Importance of Collaboration and Cooperation Between Privacy Teams and Product Development Teams
While engineers are well-versed in the concept of โSecurity by Designโ, incorporating privacy by design and privacy by default is equally vital in product vulnerability. Vulnerability assessment and penetration testing (VAPT), encryption practices are familiar to product development teams, as they have now become the norm, yet integrating privacy by design into the development lifecycle is also pivotal.
For instance, it is important to ensure APIs are not vulnerable. The logs should not capture personal data and the User Interface should be such that information collected is minimized and any pertinent information is masked. Downloading options should be such that minimal data is recorded.
Another important thing to keep in mind is the fact that a product might offer a lot of microservices, each with distinct functions and databases, potentially leading to data duplication. To streamline data management and enhance privacy, it's essential to consolidate personal data into a single database.
As a Data Protection Officer (DPO), raising awareness among engineers and encouraging data minimization are essential. Providing practical examples and instructions is crucial. The privacy team must comprehend the product intricately to create a checklist tailored to engineers' needs. Practical instructions, devoid of legal jargon, enable the product development team to grasp privacy principles effectively.
Engineers and developers must be guided through practical use-cases, while privacy teams actively participate in the process. By adhering to these principles and incorporating practical instructions, privacy by design becomes an integral part of product development, ensuring robust data protection and compliance with regulatory frameworks like the GDPR and the DPDP Act.
For example, if a company is developing a product to provide billing solutions for electricity needs to a company in the healthcare industry, the privacy team should work closely with the product development team to ensure that while capturing data (such as increased electricity needs) principles of data minimization are not compromised (like recording the health conditions of the customers of the healthcare company).
Privacy professionals would also be needed to conduct impact assessments. Data Protection Impact Assessments (DPIAs) are essential in integrating Privacy by Design by systematically identifying, evaluating, and mitigating privacy risks throughout the development lifecycle. In India, by virtue of the Digital Personal Data Protection Act, only those companies which are declared as Significant Data Fiduciaries as per Section 10 of the Act are mandated to conducted DPIAs, however, this should not be seen as a mere regulatory requirement. In product development, impact assessments act as a blueprint for Privacy by Design. They assess data risks early, prompting solutions to be built-in, not bolted on later.
Important Things to Remember on Every Stage of Product Development for Embedding Privacy by Design
Preparing for the Age of AI
In the development and integration of Artificial Intelligence (AI) models into products, human oversight is paramount. It ensures that biases are acknowledged and addressed effectively, safeguarding against discriminatory outcomes. Simultaneously, striving for a high level of accuracy remains imperative to uphold the model's reliability and performance.
The UK ICO has published its Guidance on AI, and the EU Commission has also published the Ethics Guidelines for Trustworthy AI, and such resources can be utilised in development and integration of AI-based technologies in products.
Taking Assistance of Resources
To incorporate Privacy by Design, there are numerous resources which can assist in achieving your goal without affecting the functionality of the product being designed. OWASP has come out with its list of โTop 10 Privacy Risksโ.
European Data Protection Board also came out with its Guidelines on Privacy by Design and Privacy by Default (Guidelines 4/2019, Version 2.0), where it has highlighted that, organizations should consider the following elements when implementing data protection principles through design:
ยท Implementing measures and safeguards that achieve the desired effect in terms of data protection 7.
ยท Determining appropriate key performance indicators (KPIs) to demonstrate the effectiveness of the implemented measures 7.
ยท Ensuring that the chosen measures and safeguards are specific to implementing data protection principles in the particular processing context.
Even this ISO has also come out with its standard, ISO 31700 titled, "Consumer Protection โ Privacy by Design for Consumer Goods and Services". ISO 31700 helps organizations embed privacy into their products and services from the stage where they are under development. This can reduce data breaches, boost consumer trust, and potentially comply with data protection regulations. It offers a framework for designing privacy controls, conducting risk assessments, and respecting consumer rights.
OWASP Top 10 Privacy Risks
Conclusion
According to a Tableau report, 63% of global consumers feel that most companies arenโt transparent about how their data is used. While 48% of them have stopped buying from a company or using a service due to privacy concerns.
Collaboration between data protection and development teams from the outset is crucial. This ensures that the user experience is not affected but is enhanced due to incorporation of privacy from the outset.
Privacy by Design isn't a hindrance; it's an advantage. According to a report by Tableau, 48% of people have stopped using a service provided by a company when there are privacy concerns. Thus, embedding Privacy by Design in products can provide numerous advantages in todayโs competitive market.
As Privacy by Design is now considered a standard, it is important that product development teams begin to view it as something bigger than mere compliance measure; as a requisite for fostering trust.
References-
ยท https://owasp.org/www-project-top-10-privacy-risks/
ยท https://termly.io/resources/articles/privacy-by-design/
ยท https://digital-strategy.ec.europa.eu/en/library/ethics-guidelines-trustworthy-ai
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