Weighing the Risks: Privacy, Personal Data, and Sales Tax
Last week, the FCC delivered a big blow to privacy, or the last vestiges of it. Outsell’s Lead Analyst, Hugh Logue wrote an analysis for our clients about the proposed sales tax on electronic personal data in Washington state. I have written about the weight of regulation on our industry’s shoulders. A lot of good companies found themselves swept up along with the debris left by others whose practices are not so pristine. Hugh writes about the growing political pressure to tackle brokers who target or provide data about vulnerable consumers or without consumer consent … but are sales taxes the answer?
Says Hugh:
“Although Washington State forecasts the proposed legislation will help it raise around $30 million a year, this does not seem to be the primary intention of the bill. Instead, the language used by Norma Smith when introducing the bill on the house floor suggests that the intention is to shine a spotlight on the data brokering industry and enable better monitoring of their practices. There is clearly a problem with rogue data brokers collecting and selling data illegally on a huge scale, and very little is currently done to effectively police this. The priority must be to crack down on these types of practices by investing more in the enforcement of existing regulations. Instead, introducing a new tax on personal data risks unfairly penalising companies that are compliant and ethical, while those that are not will continue to operate in the shadows with impunity.
There is a tightening of privacy regulations globally, but the EU’s GDPR (General Data Protection Regulation) will make for the most restrictive, including fines up to €20 million or 4% of annual worldwide turnover, if a company breaches any provisions. It will also apply to organisations based within and outside of Europe that supply goods and services to citizens in EU member states. Many of the benefits of storing personal data are achievable through data anonymisation techniques such as data masking, pseudonymisation, and aggregation.
With the prospect of new taxes and large fines on the horizon, the time has come when businesses need to decide whether the risk of non-compliance with data protection regulations now outweighs the benefits of using personal data at all.”
Each day we support CEOs, COOs, presidents, managing directors, and their teams to help them deal with the myriad issues affecting their business. Whether it’s sales tax, regulation, market and competitive questions, or operating benchmarks, we have your back. I’ll share more of what our analysts have to say from time to time, because there is a ton going on out there. What better tool could you have than an army of analysts and consulting partners with market and operating expertise weighing in on your most pressing issues?
Be ready for GDPR and watch the taxman. Regulation and taxes, like death, seem to be the only sure thing in life.
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