What is a Privacy Center & Why Does It Matter?

Gartner predicts that modern data privacy laws will cover 75% of the world’s total population’s personal information by the end of 2023 - the number just keeps increasing. Data privacy and protection laws are not only becoming mainstream but also stricter for companies in relation to the handling of consumers’ personal data.

If you are collecting and processing a significant volume of data of users from one or more geographies, you are most likely subject to multiple privacy laws at the same time due to the different residencies of data subjects.

A Privacy Center enables businesses to meet regulatory compliance while building customer transparency and trust. A fully functional privacy center helps you take care of all the complex aspects of data privacy, has built-in logic to dynamically adapt to global privacy regulations depending upon the region, and provides a comprehensive backend orchestration and integration with your data systems or app.

In this guide, we will discuss Privacy Centers, why they are beneficial for businesses, what components it includes, and how you can set up one with just a few clicks.

What is a Privacy Center?

A Privacy Center is basically a place where your customers can find everything they need to know about your data privacy protocols and obligations, such as:

• Your data collection process,
• Purpose of data collection and source of collection,
• Whether you sell the data or share it with any third party,
• Your cookie policies and consent preferences,
• Terms and conditions of using your website, products, or services,
• Your privacy policy,
• The applicable privacy laws,
• Their individual privacy rights, and
• How can you make data subject requests.

Privacy Center offers an interactive user experience to enable your customers to customize their preferences however they like. Some companies, like IBM, have dedicated interactive privacy center portals that are accessible with a customer ID or an email address.

While some other companies might keep it simple and display an interactive banner on their privacy policy page or a separate page altogether. The information is neatly presented to offer simple navigation, accessibility, and better readability.

Privacy Center Vs. Preference Center

Privacy centers shouldn’t be confused with preference centers. The latter allows consumers to customize the brand’s communication preferences per their liking, this can include giving consent to receiving marketing notifications and updates, choosing the channel they prefer to receive them (through texts or emails, etc.), and setting the frequency of those updates and notifications.

Preference centers are one aspect of Privacy Centers where your customers get to customize wide-ranging preferences in processing their personal data, such as consent preferences regarding the use of cookies and direct marketing communications.

Regardless, the mutual goal of both centers is to establish data collection and processing transparency, meet compliance and build customer trust whilst allowing the customer to personalize their privacy and brand communication preferences.

Why Do You Need a Privacy Center?

Since the promulgation of the EU’s GDPR and the rising privacy concerns in recent years, it is imperative for businesses to adopt tools that give a sense of control and security to the users regarding their data. Doing so also bolsters users’ trust in the business and paves the way for a better brand image and loyalty. Privacy Center is one such tool.

Privacy Centers are more readily accessible and legible than a traditional privacy policy page. Privacy policy pages are usually cluttered with information that ends up overwhelming the users instead of quickly giving them the information they seek. Moreover, the language used in the privacy policy is also, at times, technical and not very straightforward. The Privacy Centers are more intuitive and easy to navigate, allowing users to control and decide how their data will be used.

Here are some other benefits that businesses can reap with a fully functional and user-friendly privacy center:

• When collecting or processing a significant volume of customers’ personal data, businesses struggle with communicating and disclosing this information to the customers. This is because customers usually become overwhelmed with the prospect of their information being used, or sometimes they find it challenging to understand their privacy rights or how to exercise them.According to a report by Tableau, 63% of users believe that organizations aren’t forthcoming with their privacy practices. The same study further reveals that 48% of users stop shopping altogether from companies due to such privacy concerns. Privacy Centers allow businesses to retain customer trust by being transparent about their privacy operations or data collection practices. More importantly, it allows customers to choose how they wish the business/company to use their data. Additionally, a user-friendly Privacy Center indicates a business’s proactive approach to adopting best privacy practices and a commitment to comply with data privacy and data protection regulations.Privacy Center gives you an optimal way to make your privacy practices transparent to your users and present them in a neat, structured and easily legible manner.
• Businesses need to be extra vigilant and transparent when collecting, processing, or sharing sensitive information about their customers. Sensitive personal data includes information related to race, religion, genetic data, health data, sexual orientation or biometric information, etc. Global privacy laws treat sensitive information as a special category of personal information and require it to be protected in all circumstances. This is because a breach of privacy for this type of data can have devastating effects on the individual.In most privacy laws, sensitive information can only be collected, shared, or processed when a business obtains explicit consent from the customers or when public interest or any other strictly legal obligation requires it. Even in the latter case, privacy laws have set very strict criteria, and it's not something that can be used lightly. With a Privacy Center, you can easily outline all your data collection and processing practices for sensitive information. You also list down the security measures you employ to protect customers’ sensitive data. You can also highlight what rights customers have under specific privacy laws or regulations and how your practices are compliant in relation to it.

Key Components of a Privacy Center

Every business has distinct requirements depending on the size of its company, the number of customers they serve, the geographies they cover as well as the type of personal data they collect from its users. A simple privacy policy page may suffice for a small business or a startup. But a privacy center would be recommended for hyperscale organizations with an international presence and a massive customer base.

An all-encompassing privacy center may include the following privacy functions:

Privacy Notice

Almost every global data privacy law, such as GDPR, CCPA, and LGPD, requires businesses to be transparent with users in relation to their data collection practices. Privacy notices are one of the ways to achieve transparency.

A privacy notice is the first step to building and ensuring transparency of your privacy practices. These are for the external audience that visits your website and typically include information on how you will handle their data.

Privacy notices usually contain all the information related to your data collection processes, such as categories of data collected, the purpose of collection, retention period, data processing and data protection protocols, and data sharing such as with third parties or cross-border transfer mechanisms, or the information of data controllers, data handlers, or third-party services with whom the data is shared.

Cookie Preferences

Cookies are what make your website or mobile app user experience more personalized or tuned to users’ behavior. Cookies are byte-sized files stored on a user’s device whenever they visit a website or app. These files track users’ web or app usage patterns, their behavior, and their interests to create a profile for users for their identification.

Websites then use this data to assess their users' interests and marketing purposes. A Cookie Preference center also helps websites create a personalized user experience. Cookies can be categorized as essential or non-essential. The essential cookies are strictly necessary for the website to function seamlessly, while non-essential are mostly based on analytics or advertising purposes.

However, as cookies are essentially tracking and data collection technology, their use is captured within global data privacy and data protection laws. Regulations, such as the GDPR, require businesses to give notice to website visitors on the use of cookies and track users via cookies only after they obtain users’ explicit consent, except for the essential cookies.

Other privacy laws like the CCPA allow businesses to use cookies without obtaining consent from users, provided they have informed the users of the use of cookies and provided them an option to opt-out of the sale of their personal information.

Cookie consent preferences enable your customers to gain control over their data or how it should or shouldn’t be tracked. A Privacy Center must have a cookie consent management option to give users complete information on the number and types of cookie trackers that are being used and an option to opt-in or opt-out of tracking. It presents the cookie and other similar technologies-related information on a banner and in a simple and straightforward language that is easy to understand by the users. Users can choose which cookies they want to enable and which ones they wish to opt-out of, and the Privacy Center honors their selection.

First-Party Consent Preferences

First-party data is information that a company gathers about a person when that user is a direct audience or client. Businesses run marketing campaigns all year long, amongst which the most common marketing practice is sending promotional emails, newsletters, or messages, etc. These marketing communications offer a great opportunity to stay engaged with your customers, nurture them, or reinforce their loyalty to your brand whilst improving the business’s marketing practices.

However, under most privacy laws, like the EU e-Privacy Directive, you must obtain a user's consent prior to conducting any direct marketing communication via electronic means. Countries like New Zealand, Canada, Australia, Hong Kong, and Singapore also require you to obtain explicit opt-in consent from individuals prior to sending them any marketing communications.

For increased transparency, compliance, and trust, you must provide a consent management option in your privacy center to enable users to set up their marketing preferences, such as if they would like to receive all marketing communications or just specific ones. They can also choose the medium (email, newsletters, or messages) and the frequency of these.

Individual Privacy Rights

One of the founding principles of data privacy laws is user empowerment, enabling them to control how they wish to have their data collected, processed, modified, or deleted. This resulted in having privacy laws to provide users with individual privacy rights.

Privacy rights are wide-ranging, but it depends on the data privacy law regarding how comprehensive or limited rights they provide to their citizens. Basically, privacy rights may include:

• Right to request access information,
• Right to correct or modify information,
• Right to opt-out of selling or sharing information,
• Right to limit the disclosure of sensitive information,
• Right to opt-out of automated decision-making, and
• Right of no retaliation to exercising the right to opt-out.

Apart from outlining the privacy rights of individuals, data privacy laws further provide comprehensive details into how customers can exercise their rights or what measures organizations must take to enable customers to exercise their rights, as well as the methods.

Enabling users to exercise their privacy rights via your Privacy Center allows seamless access to those rights but also builds users’ trust in businesses.

Do Not Sell My Information

The California Consumer Privacy Act (CCPA) introduced the right to “Do Not Sell My Personal Information,” which enables consumers to restrict companies from selling their data by giving them the option to opt-out of the sale of their personal information.

However, the upcoming legislation that provides amendments and additions to the CCPA, the California Privacy Rights Act (CPRA), which will come into effect in January 2023, has taken it a step further by restricting companies from not only selling personal information but also sharing consumers’ data. The CPRA requires businesses to indicate a “Do Not Sell or Share My Personal Information” right link or button on their website homepage. Sharing also includes cookies used for cross-contextual behavioral advertising.

The CCPA further requires businesses to place a clearly visible “Do Not Sell” button or link on their website either through a cookie banner or separately and clearly provide information on consumers' opt-out requests and the sale or sharing of their personal data with third parties.

Moreover, businesses are also responsible for notifying associated third parties of the users’ preferences regarding the selling or sharing of their personal information. A Privacy Center incorporates all of the requirements, thereby showing the business’s compliance with regulatory specifications.

Set Up Securiti Privacy Center With Just a Few Clicks

Securiti is the leader in Data Command Center and Privacy Management solutions. Our lite yet fully functional tenant, Privacy Center, is built to enable businesses to automate their key privacy functions within a few minutes and without any complexities.

With over thousands of connectors for seamless integration and pre-built comprehensive regulatory guidelines, you can automate compliance with privacy notices, cookie preferences, consent management, and individual data request rights.

Automate your first privacy notice or set up a cookie banner by signing up for a Free Trial now - no credit card is required.