Privacy Protection Is Smart Business

Reprinted with permission from FindLaw.com

Protecting customer private data is not necessarily easy for companies. And with increasing government regulation and customer expectations, the associated burden and cost may seem heavy. However, companies are starting to "get" that privacy protection translates into good business.

Happy customers tend to be repeat customers. Unhappy customers whose private data has been compromised might go elsewhere with their future purchases and transactions.

A recent report by Ernst & Young titled "Privacy Trends 2011: Challenges to Privacy Programs In A Borderless World" supports the notion that companies are coming to grips with the new realities of privacy protection. Indeed, this report finds that many companies intend to hire certified privacy professionals and to deploy technology designed to combat external information attacks and to grapple with potential internal data leaks.

The report also highlights other corporate trends that are intended to facilitate data privacy protection. These trends include developing safeguards in the social networking arena, vendor risk management and reporting with respect to cloud computing, management of mobile devices, and independent privacy and security assessments.

Privacy is not an ivory tower academic issue. The consequences and fallout from privacy compromises can be enormous, while the benefits of actual and perceived protection enhance corporate loyalty among customers and can even be part of effective marketing and branding.

Eric J. Sinrod is a partner in the San Francisco office of Duane Morris. His focus includes information technology and intellectual-property disputes. This column is prepared and published for informational purposes only, and it should not be construed as legal advice. The views expressed in this...