The proliferation of new privacy and security laws imposes diverse, complicated, and at times inconsistent compliance requirements on organizations that handle personal data. Not only do these laws require the protection of individual privacy from intrusion, many of them also involve public concerns like national security and defense, protecting critical infrastructure, social interest, community safety and law enforcement access. Adding to the complexity, satisfying some of these requirements (e.g., data localization and sovereignty) often encroaches on privacy, diminishes security and impedes business opportunities.

In addition to legislation, we are also seeing governments issue procurement requirements related to privacy and security. These requirements are necessary to ensure critical infrastructure providers and government agencies are only using safe and secure goods, software and services.

With the backdrop of these laws and procurement requirements, we now have legislation influencing (and at times dictating) how products are built – at least setting some baseline elements that are necessary and must be included in every product.

Take, for example, California’s IoT Security law — enacted without much fanfare in September 2018 and effective as of January 1, 2020. In a nutshell, the law requires manufacturers of internet-connected devices sold or used in California to build reasonable security into those products. More specifically, it prohibits the use of generic default passwords.

Beyond this law (and likely others to come), companies have a clear business incentive to ensure their devices are properly secured and to implement protocols that help users better protect themselves. Think about the many headlines regarding IoT hacks causing massive DDoS attacks that took down parts of the internet; or the unauthorized access to webcams and connected home security systems that were exploited to invade privacy and terrorize children. In these situations, unsecure systems hurt the provider’s business and brand and negatively impacted others too.

For those companies that haven’t gotten the message, California’s new law tips the privacy ROI scales with the threat of “stop ship”, negative publicity, enforcement actions, fines and consumer lawsuits. A legal requirement in order to sell products into California (the world’s 5th largest economy) no doubt impacts the way products will be built from now on.

Similarly, procurement requirements in both the private and public sectors are influencing manufacturers’ decisions about whether to sell into particular markets, and impacting the way products are designed and built.

Cloud service providers (CSPs) wishing to sell to the US Federal government, for example, must be FedRAMP certified. Unlike California’s IoT Security law which applies to manufacturers, FedRamp is a procurement requirement that US federal agencies must follow. Those agencies are not permitted to buy or use non-FedRamp certified cloud offerings. The FedRAMP certification process is rigorous and time consuming. For even sophisticated security companies, it can take over a year to complete the audit and demonstrate that all requisite controls are in place.

While FedRamp is strong on risk management and security, it hardly mentions “privacy” at all. Instead, federal agencies such as the Department of the Interior have noted that, in addition to FedRamp, CSPs must satisfy separate and distinct privacy requirements embodied in a variety of other legislation and policies (e.g., the Federal Information Security Management Act of 2002, E-Government Act of 2002, and Office of Management and Budget M-03-22 policy). If the CSP builds their product to meet FedRamp alone, they would meet the security requirements, but not satisfy the privacy requirements of US federal law, let alone the requirements of the 120+ countries with omnibus privacy legislation.

How then does a company adopt a consistent security and privacy approach that will enable the most market opportunities? Complex does not have to be complicated. When you boil down the various laws, regulations and procurement requirements, you get three core principles that have been the foundation of privacy for decades – transparency, fairness, and accountability.

Everything starts with understanding the data in play and being transparent to users, data subjects, and other stakeholders about what’s going on with it―the who, what, where, when, how, and why of data. This effort should begin at the design phase of the data-collecting product, service or process being built. Each data element that will be captured must be evaluated for what it is and why it’s needed throughout the lifecycle. Considering both the intended and unintended consequences and risks of the data set is key to a robust privacy impact assessment (PIA). PIAs are no longer just best practice – they’re legally required.

As part of the PIA process, the customer’s objectives must be a top priority. It’s not illegal to make a product nobody wants to buy; a developer’s legal obligation is to be truthful and transparent about what the product can and can’t do. “Customer-centric innovation” means that we focus on what the customer needs the product to do, and what features and functionality they need to be successful (and compliant).

Often this means that products are designed in a manner that can be customized and/or configurable¾ setting a default configuration that meets the vast majority of the market’s requirements while offering customization options for customers with unique and stringent regulatory or market constraints.

Such trade-offs are investment choices that must be made based on the business case. In some situations, it may not be cost effective for a vendor to allow customization for a limited set of customers, thereby requiring a decision to forego certain markets (or to sell custom build services).

One of the areas where companies traditionally struggle is with data retention and deletion practices. The availability of inexpensive storage long encouraged companies to keep all of the data they collected in perpetuity. This was in part driven by a “we’ll need it someday” mentality along with data scientists wanting as much data as possible to churn and extract emerging patterns and meaning. And, it was also just easier to not have to decide what to keep and what to expunge.

Privacy laws, however, are now pushing back against those old models. Countering records management requirements of minimum time periods that records must be retained, privacy is pushing for outer limits on the maximum period data should be held.

Given this changing legal climate, we’re now seeing products being built with retention, expiry, export/portability and on-demand deletion capabilities. We’re seeing more discipline in organizations’ data retention periods, and justification being required for the retention period selected. While not being overly prescriptive (yet), privacy laws require that data is kept “only as long as it is needed” to serve the purpose for which the data was collected. If the purpose and use isn’t well understood or clearly articulated, retention should be cut off.

Relatedly, new laws such as the ‘right to be forgotten’ are triggering data subject demands for all personal data to be deleted. While some have over-rotated on that right, a more careful read of the legislation and court cases reveals that the data subject has the right to request deletion and get a response – but they don’t always get the data deleted.

Rather, they get deletion or an explanation as to why deletion is not technically feasible or why further retention is required. For instance, a business may have legal retention requirements for tax purposes or for employment verification. Individuals have a fundamental right to privacy that must be respected, but that right is not an absolute right. It must be balanced against the rights of others, including the right of a company to conduct legitimate business and comply with its own legal obligations.

Transparency here means that you explain your data retention and expiry practices, disclose the reasons why you are keeping data for the period that it is being kept, and explain what can or can’t be deleted: what are the business and legal justifications for your practices? The market (and regulators) will decide whether those practices are fair and hold you accountable for living up to promises made. Ultimately, being transparent, fair, and accountable honors privacy rights and builds trust, making it a sound business and marketing practice.

As part of organizational accountability, companies must also have processes in place to document decisions being made to ensure a consistent, repeatable and defensible approach. For example, at Cisco, our products and offers all go through the Cisco Secure Development Lifecycle (CSDL) to ensure we are building trustworthy solutions with privacy and security in mind from the start.

CSDL is a product launch “gate” that defines and codifies the baseline security and privacy requirements all products must meet before they are given the green light to ship. It combines tools, awareness, training, and processes such as Privacy Impact Assessments, to promote defense-in-depth and provide a holistic approach to product security, privacy and resiliency.

Further, CSDL guides business judgment calls and design decisions, and provides the documentation for transparency and explanation of our practices.  

CSDL’s requirements and product approvals go through periodic reviews, both annual and ad hoc as new requirements (legal, industry standards, best practices, etc.) are published. This enables us to verify that CSDL is timely, relevant and compliant.

The breadth of today’s privacy considerations gives businesses a lot to factor when creating product development and market strategies: deeply understanding their data, clearly defining their customer needs, tuning in to market sentiment and balancing business goals in the regulatory environment.

Success depends on leveraging existing processes, and partnering closely with the privacy, security and development teams to co-design with a focus on customer-centric, transparent data-handling. Ultimately, being transparent, fair, and accountable in data practices strengthens trust and builds market opportunity.

Harvey Jang, Vice President, Chief Privacy Officer, Cisco