privacy vs security.
If you ask ten business leaders to define the difference between data privacy and data security, chances are you’ll get a mixed bag of answers. Some will treat them as interchangeable, while others might emphasise one over the other. But here’s the reality: they’re closely linked yet distinct concepts, and if your organisation doesn’t understand the difference, you’re setting yourself up for legal, financial, and reputational risks.
Think of it this way—privacy is about who has access to data and why, while security is about how that data is protected. You can have world-class security protocols, but if you’re mishandling customer data or failing to meet regulatory requirements, you’re still at risk. Likewise, even the most privacy-conscious organisation can be brought to its knees if it fails to secure its data from cyber threats.
The distinction isn’t just theoretical—it has real-world consequences. Take the case of Meta’s $1.3 billion fine in 2023 for violating EU privacy laws. It wasn’t a security failure that triggered the penalty; it was a privacy issue—specifically, transferring European users’ data to the U.S. without adequate safeguards. On the flip side, T-Mobile’s 2023 data breach affected over 37 million customers, not because of a privacy policy misstep, but because cybercriminals exploited a security vulnerability. Two different problems. Two different risks.
For executives, this isn’t just a compliance issue—it’s a business imperative. Customers, regulators, and investors are all watching how you handle data. The companies that get this right don’t just avoid fines; they build trust, gain a competitive edge, and sleep better at night knowing they’re not one breach or regulatory crackdown away from disaster.
data privacy vs. data security: what’s the difference?
data privacy: controlling who has access to what, and why.
At its core, data privacy governs how personal information is collected, used, shared, and stored. It ensures your organisation aligns with legal standards, ethical norms, and consumer expectations.
Privacy failures typically stem from poor internal governance rather than external threats. ChatGPT’s temporary data leak in 2023, where users could access others’ conversation histories, wasn’t a cyberattack but a privacy oversight. Yet, it raised serious concerns about OpenAI’s privacy protocols.
For businesses, strong privacy practices mean:
Transparency: Clearly informing users about what data you collect and why.
Consent and Control: Allowing customers access to, and control over, their data.
Regulatory Compliance: Meeting requirements of GDPR, CCPA, HIPAA, or relevant local laws.
data security: protecting data from unauthorised access and threats.
If privacy is about controlling access, data security is about ensuring that access isn’t exploited. Security measures focus on preventing cyberattacks, data breaches, insider threats, and accidental leaks.
Security failures can be catastrophic. In 2023, MOVEit, a widely used file transfer tool, was hacked, exposing sensitive data across multiple industries, including healthcare and finance. The issue? A zero-day vulnerability—a flaw that was exploited before the vendor could fix it. Companies using MOVEit had no direct privacy failures, but their security posture was compromised, leading to class-action lawsuits and regulatory scrutiny.
To maintain strong security, businesses should focus on:
Cyber Hygiene: Regular software updates, strong authentication, and encrypted communications.
Threat Detection: Continuous monitoring and response to potential breaches.
Risk Mitigation: Strategies like data minimisation and access control to limit exposure.
how they overlap—but don’t replace each other.
You can’t have privacy without security, but you can have security without privacy. A company could encrypt every file and monitor every login attempt, but if it’s collecting customer data without consent or sharing it irresponsibly, it’s still violating privacy laws. Conversely, a business might have a strong privacy policy, but if its systems are vulnerable to attack, that privacy won’t mean much when data gets stolen.
The companies that get this right integrate both from the start—not as separate compliance checkboxes, but as part of a unified data strategy. Because at the end of the day, customers don’t care whether a failure is labeled as a “privacy issue” or a “security breach.” They just want to know their data is safe and being handled responsibly.
why the distinction matters.
Understanding the difference between data privacy and data security isn’t just about compliance—it’s about protecting your business from financial loss, reputational damage, and legal trouble. Companies that conflate the two often focus too much on one aspect while neglecting the other, leaving themselves exposed.
regulatory and legal risks.
Governments and regulators take both privacy and security seriously, but they enforce them differently. A failure in privacy can result in massive fines—even if no data is stolen. A security failure, on the other hand, can trigger lawsuits, operational disruptions, and regulatory penalties.
Consider Clearview AI’s $20 million fines across multiple countries in 2022 and 2023. The company scraped billions of images from the internet without consent, violating privacy laws in the UK, Australia, and the EU. There was no data breach—no hackers, no unauthorised access. But regulators ruled that Clearview’s data collection practices violated privacy rights, leading to multiple fines and legal battles.
In contrast, Latitude Financial’s 2023 data breach in Australia, saw cybercriminals steal the personal details of 14 million customers, including passport and driver’s license numbers. Latitude had not only failed to secure customer data properly but also retained it far longer than necessary, compounding the breach’s impact. As a result, the company faced investigations, lawsuits, and significant reputational damage.
business risks: trust and reputation.
Customers, investors, and partners expect companies to handle data responsibly. A security breach might shake confidence, but a privacy violation can permanently damage trust.
British Airways learned this the hard way. In 2018, hackers accessed 400,000 customer records due to weak security, but it wasn’t until 2020 that the UK’s Information Commissioner’s Office (ICO) fined the airline £20 million for failing to protect data properly. The financial penalty was significant, but the real damage came in the form of lost customer trust and a reputation hit at a time when the airline was already struggling due to COVID-19.
If businesses don’t proactively address both privacy and security, they risk:
Fines and legal battles that drain resources.
Erosion of customer trust, making it harder to retain and attract users.
Operational disruptions when systems are compromised or regulators intervene.
The bottom line? Privacy failures lead to legal scrutiny. Security failures lead to cyber crises. Both lead to financial losses and brand damage.
key regulations and frameworks.
Regulators enforce privacy and security through distinct but complementary frameworks. Ignoring either area exposes businesses to financial penalties, legal challenges, and reputational damage.
In the EU and UK, GDPR sets the gold standard for privacy, requiring explicit consent for data collection, strict controls on data transfers, and granting individuals rights to access, correct, or delete their data. On the security front, ISO 27001 is widely recognized as the leading global framework for managing information security risks.
In Australia, privacy laws are governed by the Privacy Act 1988, which is undergoing reforms to introduce stronger consumer rights. Meanwhile, the Essential Eight cybersecurity framework, recommended by the Australian Cyber Security Centre (ACSC), helps businesses protect against cyber threats.
In the United States, privacy is regulated at the state level, with CCPA (expanding with CPRA) giving consumers the right to control their data and opt out of its sale. Security best practices are outlined in the NIST Cybersecurity Framework, which provides guidelines for managing cyber risks but is not legally mandated.
💡Key Takeaway: If you operate globally, comply with GDPR first—it’s the strictest framework. If you’re in Australia, expect tougher privacy laws soon.
💡Key Takeaway: Unlike privacy laws, failing to meet security standards won’t necessarily result in immediate fines—but a data breach will, leading to lawsuits, insurance claims, and loss of business.
why you need both.
A GDPR-compliant privacy policy means nothing if your customer database gets hacked. Likewise, a bulletproof security system won’t protect you from a lawsuit if you’re misusing personal data. Privacy keeps you legally compliant. Security keeps you operationally safe.
The best approach is integrating privacy and security into a unified strategy, proactively safeguarding your business rather than simply ticking compliance boxes.
common misconceptions and business challenges.
Despite the growing importance of data privacy and security, many businesses still operate under false assumptions that leave them vulnerable. Here are some of the most damaging myths and real-world examples of how they can backfire.
Myth 1: “If We Have Strong Security, We Don’t Need to Worry About Privacy”
A company might encrypt every file, monitor every access point, and have cutting-edge cybersecurity measures—but if they’re misusing customer data, they’re still violating privacy laws.
Case Study: TikTok’s Privacy Controversies (2023-2024)
TikTok has faced repeated scrutiny over data privacy, including allegations that user data is accessible to China-based employees despite public assurances to the contrary. Even though the company has robust security measures in place, privacy concerns have led to multiple bans in government sectors worldwide and potential legal restrictions in the U.S.
💡Lesson: Strong security won’t save a company if regulators or customers believe their privacy rights are being violated.
Myth 2: “A Good Privacy Policy Means We’re Secure”
Many businesses assume that because they have privacy policies and user agreements, they’re fully protected. But privacy policies don’t prevent data breaches—they only explain how data is supposed to be handled.
Case Study: LastPass Security Breach (2022-2023)
LastPass, a major password management service, had a clear and transparent privacy policy. However, a major breach in 2022 exposed encrypted password vaults because hackers gained access to a developer’s credentials. Even though LastPass was privacy-compliant, the security lapse had severe consequences, including user data exposure and reputational damage.
💡Lesson: A well-written privacy policy means nothing if your security measures fail.
Myth 3: “Compliance is Enough”
Some businesses focus solely on regulatory checklists rather than truly securing or managing data responsibly. This reactive approach leaves them vulnerable.
Case Study: Medibank Data Breach (Australia, 2022)
In one of Australia’s worst cyberattacks, hackers accessed 9.7 million Medibank customer records, including highly sensitive health data. The company had met compliance standards, but failed to implement multi-factor authentication on a critical system, allowing cybercriminals to access its network. Medibank faced lawsuits, regulatory scrutiny, and severe brand damage.
💡Lesson: Compliance should be a baseline, not a strategy. Companies that rely on regulations alone rather than investing in robust security and privacy measures will always be one step behind.
best practices for businesses.
Understanding the difference between data privacy and data security is one thing—embedding both into your business strategy is another. Many companies treat them as separate silos, which leads to blind spots. The businesses that get it right take an integrated approach, ensuring that privacy and security work together to reduce risk.
Here’s how your organisation can turn understanding into action.
1. Implement Privacy-by-Design and Security-by-Design
Instead of tacking on privacy and security as afterthoughts, bake them into every system, product, and process from the start.
✅ Privacy-by-design means:
Collecting only the data you actually need.
Giving users control over their data (consent mechanisms, opt-out options).
Ensuring transparency in how data is used and shared.
✅ Security-by-design means:
Encrypting sensitive data at rest and in transit.
Applying strict access controls (limiting who can see what).
Building robust incident detection and response capabilities.
Example: Apple’s privacy-first approach in iOS gives users clear, real-time visibility into which apps access their data. Meanwhile, its end-to-end encryption across messaging, health data, and payments ensures security is built in, not bolted on.
2. Conduct Regular Risk Assessments and Compliance Audits
Cyber threats and regulations evolve—your privacy and security policies should, too. Annual or biannual audits help identify weak points before they turn into serious issues.
What to assess:
✅ Privacy: Are you compliant with global and local privacy laws (GDPR, UK GDPR, CCPA, Australia’s Privacy Act)? Are your data collection practices still necessary?
✅ Security: Do you have the latest security patches, firewalls, and encryption protocols? Have you tested your incident response plan?
💡Pro tip: Simulate a privacy compliance audit and a cyberattack scenario internally. This will expose gaps before regulators or hackers do.
3. Train Employees on Privacy and Security Awareness
Technology alone won’t protect your business—your people are the first line of defense. Employees routinely handle sensitive information, and many breaches happen due to human error (misdirected emails, weak passwords, clicking phishing links).
✅ Run regular training sessions on:
How to spot and avoid phishing attacks.
The importance of strong passwords and multi-factor authentication (MFA).
What constitutes a privacy violation, even if it’s accidental.
Example: Many of Uber’s 2022 security failures came from weak internal controls. Attackers gained access by tricking an employee into providing credentials. A well-trained workforce reduces this risk significantly.
4. Use Data Minimisation and Access Controls
The less data you store, the less you have to lose in a breach. Only keep what’s necessary.
✅ Data minimisation best practices:
Don’t collect excessive personal data if it’s not essential.
Set automatic deletion schedules for old or unused data.
✅ Access control best practices:
Apply the principle of least privilege (PoLP)—employees should only have access to what they need.
Use role-based access control (RBAC) to manage permissions effectively.
Example: After the Optus data breach in Australia (2022), investigations revealed the company had stored excessive customer data for years longer than necessary. This made the breach far worse than it needed to be. If they had deleted old data, the impact could have been minimised.
5. Strengthen Vendor and Third-Party Risk Management
Many businesses outsource data storage, processing, or security functions—but your liability doesn’t end when data leaves your systems.
✅ Regularly assess third-party vendors for:
Their privacy policies—do they meet your compliance obligations?
Their security protocols—are they protecting your data with the same rigour you would?
Example: In 2023, a Capita data breach exposed sensitive UK pension records because of a third-party supplier’s failure. Companies working with Capita had little control over the breach but suffered reputational fallout anyway.
the future of privacy and security is proactive, not reactive.
Most companies don’t get serious about privacy and security until something goes wrong—a breach, a lawsuit, a hefty fine. But by then, the damage is done. The smartest businesses take a proactive approach, embedding privacy and security into their culture, operations, and technology stacks before they become a liability.
Here’s what that looks like in practice:
✔ Privacy and security are business priorities, not just IT concerns.
✔ Every new system, product, or service is designed with privacy and security in mind.
✔ Employees understand their role in protecting data—through training and clear policies.
✔ Executives see privacy and security as competitive advantages, not just compliance checkboxes.
Companies that fail to take these steps will always be one breach, one lawsuit, or one regulation update away from disaster. But those that get ahead of the curve? They’ll not only avoid the risks—they’ll build trust, drive innovation, and future-proof their business.
Privacy and security aren’t optional. They’re the foundation of modern business resilience.
