Introduction

In simple terms, “Data Minimization” is a practice that involves minimizing the collection of personal information by businesses or any other entity. This practice is helpful for businesses to avoid data breaches, subsequent legal actions, and the loss of customer trust. In the following sections, we will delve into this concept in more detail.

What is Data Minimization?

Data Minimization means that businesses should limit the collection of personal information from their customers to only what is directly relevant and required to attain a specific purpose. They should also retain the data only for as long as it is necessary to fulfill that purpose.

Why Data Minimization is a Necessity?

In today’s age, data has become a precious commodity because of its remarkable usefulness in adding value to various aspects of businesses and, subsequently, many aspects of our lives. Businesses are constantly collecting data from their customers through various means, such as online forms, tracking locations through their business apps, surveys, and more. This data is then used to improve their products, customer engagement, marketing campaigns, sales, customer perception, and various other aspects of business.

Owing to its advancements in storage technology, it has become cheaper for businesses to store this collected data. As a result, businesses often store large amounts of collected data without hesitation. Sometimes, businesses collect customers’ Personally Identifiable Information (PII) even when it is not relevant, hoping to use it for future business improvements. With the significantly increased risk of data breaches and cyber-attacks, stored data poses a risk for businesses as well as an opportunity. Therefore, it is becoming increasingly critical for businesses to adopt data minimization techniques to protect their customers’ privacy.

Adopting Data Minimization Provides Several Benefits

1. Protecting privacy – One of the key benefits of adopting data minimization is that it helps protect the privacy of individuals. By collecting only relevant data, companies can minimize the likelihood of data breaches and unauthorized access to personal sensitive information. Less sensitive information collected means less information to protect from cyber-attacks, allowing companies to focus on implementing strict protection policies to reduce the risk of security breaches.
2. Compliance with privacy regulations – With increased awareness of data privacy, governments around the world are implementing laws and policies to protect their citizens’ privacy, such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). Many of these data privacy regulations enforce the data minimization principle. Failing to adhere to these regulations can result in hefty fines for companies and negatively impact their reputation in the eyes of customers. Therefore, it has become increasingly critical for companies to adopt data minimization techniques to ensure compliance.
3. Cost-saving – Collecting, storing, and processing big amounts of data can be expensive. Despite the relative decrease in storage costs over the years, companies still must spend money on collecting, processing, and protecting personal information. By implementing data minimization techniques, companies can reduce the amount of data they need to store and process, leading to significant cost savings.

Real-world Consequences of Not Adopting Data Minimization

According to The Hamburg Commissioner for Data Protection and Freedom of Information Bundesbeauftragte für den Datenschutz und die Informationsfreiheit (BfDI), they have issued a €35.3 million (equivalent to 41.5 million United States dollars (USD)) fine to the Swedish multinational clothing retail conglomerate on October 1, 2020, for violating the General Data Protection Regulation (GDPR). This conglomerate collected information about employees that was unnecessary to carry out employment-related obligations.

How to Implement Data Minimization

Implementing data minimization requires companies to review their data collection policies and assess which data is relevant and necessary to achieve the business objectives. Here are some steps businesses can take to implement data minimization:

1.  Conduct data inventory – Businesses should begin by conducting a data inventory audit to identify the types of data they are collecting and storing. This will help in identifying any unnecessary data and determining which data is essential for the company’s operations. iEDPS has a data discovery feature that identifies sensitive information stored in data stores as per data privacy regulations, be it structured data stored in databases and files or unstructured data and presents findings in the report and helps in protecting that data using techniques such as masking, anonymization, pseudonymization. By leveraging iEDPS’s data discovery feature, businesses can easily identify what sensitive personal information they are collecting and storing. Then they can assess which information is required for their purposes and which is being collected unnecessarily.
2. Limit data collection – Businesses should restrict the amount of data they collect to only what is necessary for their operations.
3. Implement data access policy – As the principle of data minimization states that collected personal data should be used for the agreed-upon reason for which it is being collected, it becomes necessary for businesses to comply with this principle. They can implement internal data access policies to ensure that data can be accessed only by authorized personnel or applications and only for the original purpose for which it was collected from customers. iEDPS has a feature called secure queries which allows the owner of data to apply pseudonymization techniques on sensitive data on the fly when someone queries it through iEDPS. This helps avoid giving direct access to data sources to persons who do not need to see sensitive data for business purposes but for other legitimate purposes such as testing, whereas developing applications for business. Once the user has identified sensitive data and the data stores in which it is being stored using iEDPS’s data discovery feature, they can also identify which application is using it. Using this information, they can identify all the users who have access to these data stores and applications. This is an additional way iEDPS can be useful in limiting data access.
4. Implement data retention policy – Data minimization principles also state that personal data should be retained only if it is required to fulfill the motive for which it was collected. To comply with this, businesses can implement internal data retention policies that specify how long data should be retained once collected and when it should be purged. This will help ensure that data is not retained for longer than necessary and reduce the risk of data breaches. Using the iEDPS has a data subsetting feature, the user can create a subset of data based on conditions. Businesses can give suitable conditions, and iEDPS will remove all the data not matching that condition. This can be scheduled to occur at any time in the future, along with periodic intervals. Using this, businesses can achieve data deletion at periodic intervals.
5. Purge unnecessary data – Businesses should regularly assess their data stores and purge data that is being unnecessarily stored. Data should be purged in a way so that it will be impossible to recover it. This will help reduce the risk of data breaches and ensure compliance with data protection regulations. iEDPS data discovery helps generate intuitive reports, which can help businesses to understand how they are storing sensitive personal data. The users can decide which data is no longer necessary and delete it permanently from their system. Businesses can use the data subsetting feature in iEDPS for purging sensitive personal data.

Conclusion

In conclusion, data minimization is an essential practice for businesses that want to protect the privacy of their customers and comply with data protection regulations. By collecting only the data that is necessary for their operations and implementing data minimization techniques, businesses can minimize the risk of data breaches, save costs related to data collection, storage, and processing, and, most importantly, strengthen trust with their customers. We have also seen how iEDPS can assist businesses worldwide in adopting data minimization practices.

Author details: Omkar is a Technology Analyst with two years and 9 months of experience. Over this period, he has worked on implementing various functionalities in iEDPS.