Data privacy concerns to be aware of and how to mitigate them

Businesses handle more personal data than ever, but many still overlook the risks. Mishandling user information doesn’t just lead to regulatory fines, it erodes customer trust and damages reputations. Meanwhile, privacy laws are tightening worldwide, and consumers are demanding more control over their data.

Yet, many companies continue to collect excessive information without a clear purpose, struggle with consent management, or fail to adequately secure sensitive data. These missteps leave them vulnerable to breaches, lawsuits, and customer backlash.

Understanding the most common data privacy concerns — and how to fix them — is essential for staying legally compliant and competitive.

What is data privacy?

Data privacy refers to the policies and practices that govern how personal information is collected, stored, shared, and protected. Implementing strong data privacy practices means that your company gives individuals control over their data while meeting ethical and legal standards.

Regulations like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) set strict guidelines for data collection and processing. These laws emphasize transparency by requiring businesses to inform users about how their data is used and to provide options to either opt in or out.

For businesses, data privacy is more than just compliance. It’s a strategic necessity. Companies that fail to handle data properly risk legal action and customer churn. Those that prioritize privacy can differentiate themselves in a competitive market.

Data privacy trends: What’s changing in 2025?

Privacy expectations and data privacy concerns are quickly shifting with both the public and regulatory bodies. This shift is being driven by three main factors: stricter regulations, heightened consumer awareness, and advancing technology.

Countries around the world are introducing new privacy laws. As of March 2024, nearly 80 percent of global data was covered by privacy regulations. So, while the GDPR was a major milestone, it was just the beginning.

The California Privacy Rights Act (CPRA) has expanded data rights for individuals in California, and regulations in Brazil, China, Canada, and other countries are reinforcing the global shift toward stronger data protection laws. Businesses operating across borders must keep up with and balance these changes to avoid legal consequences.

In addition, consumer expectations are also shifting. People are more aware of how their data is used and demand greater control. Features like cookie consent banners, privacy settings, and the ability to delete personal data are no longer optional, they’re expected. Companies that don’t meet these expectations risk losing customer trust.

Meanwhile, technology is making data privacy both easier and more challenging. For example, AI-driven analytics and IoT devices collect a lot of personal data, often in ways people don’t fully understand.

Companies must balance innovation with privacy protection so that new technologies improve user experiences without putting their personal data at risk.

Curious to learn more? Stay ahead of evolving privacy regulations and technologies with our analysis of current data privacy trends for 2025.

Common data privacy concerns and tips on how to address them

Despite growing awareness, many businesses still struggle with emerging technology and privacy issues. Understanding these issues is the first step toward addressing them effectively.

Below are the six most pressing data privacy risks and concerns that small businesses (SMBs) typically face.

The challenge: Unclear data collection practices

One of the most widespread data privacy issues is a lack of clear purpose in data collection. Many businesses gather information without a defined strategy, leading to bloated databases and increased risk exposure.

This “collect everything, just in case” approach not only violates privacy principles but also creates unnecessary security vulnerabilities.

When you collect data without a clear purpose, you’ll struggle to explain to customers why you need their information. This undermines trust and can lead to lower conversion rates as privacy-conscious customers abandon forms or transactions.

Additionally, unfocused data collection makes it difficult to maintain data quality and relevance, leading to poor business decisions based on cluttered or outdated information.

The solution: Data auditing

The solution begins with a data audit. Examine what information you’re currently collecting and why. For each data point, ask: What business purpose does this serve? How does it benefit our customers? Could we achieve the same goal with less sensitive information? This process often reveals opportunities to streamline your data collection while actually improving your business insights.

The challenge: Ineffective consent management

Obtaining valid consent means more than just having users click “Accept All” on a cookie banner. It requires clearly explaining data usage and providing genuine choice with user-friendly ways to change or withdraw consent. Many businesses struggle with implementing consent mechanisms that are both legally compliant and user-friendly.

Common issues around data privacy include pre-checked consent boxes, which are explicitly prohibited under GDPR, bundling multiple consent requests into a single question, and making it difficult for users to refuse consent or withdraw it later. These practices not only violate regulations but also damage customer trust.

The solution: Transparency

Effective consent management starts with transparency. In clear, jargon-free language, explain what data you’re collecting and how you’ll use it in your privacy policy.

In addition, provide granular options so users can consent to some uses while refusing others. Make it as easy to withdraw consent as it was to give it. Most importantly, respect the choices users make. Don’t try to circumvent their preferences through technical workarounds.

The challenge: Excessive data retention

Keeping personal data longer than necessary increases both compliance and security risks. Yet many organizations lack clear policies for data deletion, archiving, or anonymization allowing older data to accumulate indefinitely.

Without defined retention periods, businesses often default to keeping everything forever. This not only violates the storage limitation principle of many major privacy regulations but also increases your exposure to data breaches.

The more data you store, the more valuable a target you become for attackers, and the greater the potential damage if a breach occurs.

The solution: Assign retention periods

Implementing proper data retention starts with categorizing your data and assigning appropriate retention periods to each category. For example, transaction records might need to be kept for tax purposes, but the marketing preferences of customers who haven’t engaged with your business in years can likely be deleted. Regular data purges based on these retention periods help maintain compliance while reducing risk.

The challenge: Cross-border data transfer complexities

Transferring data between countries requires careful consideration of legal frameworks. Many businesses unknowingly violate cross-border data transfer rules through cloud services, international vendors, or global operations.

The invalidation of frameworks like Privacy Shield between the EU and US has further complicated matters, leaving many businesses uncertain about how to legally transfer data between regions.

This uncertainty can lead to either excessive caution that hinders operations or inadvertent violations that expose the business to penalties.

The solution: Data flow mapping

Addressing cross-border transfer issues requires a clear understanding of where your data is stored and processed. Many businesses are surprised to learn that their data resides in multiple countries due to use of cloud services or third-party processors.

Once you’ve mapped your data flows, you can implement appropriate safeguards such as standard contractual clauses, binding corporate rules, or other legal mechanisms for compliant transfers.

The challenge: Inadequate privacy documentation

Privacy policies and data processing agreements are often treated as legal formalities rather than meaningful tools for transparency. Many businesses use generic templates that don’t accurately reflect their practices or fail to update documentation when processes change.

Outdated or generic privacy notices fail to inform users properly and can lead to compliance issues. If your privacy policy doesn’t match your actual practices, you’re not only violating transparency requirements, but potentially invalidating any consent you’ve obtained based on that policy.

The solution: Revamping your privacy policy

Effective privacy documentation requires regular review and updates. Your privacy policy should be specific to your business and written in clear language that your customers can understand.

It should cover what data you collect, why you collect it, how you use it, who you share it with, and how users can exercise their rights. Each time you introduce new data processing activities or technologies, review and update your policy accordingly.

The challenge: Insufficient vendor management

Many privacy breaches occur not through direct vulnerabilities but through third-party vendors and service providers. Businesses often fail to properly vet their vendors’ privacy practices or establish clear data protection requirements in contracts.

When you share customer data with a vendor, in most cases your business remains responsible for how that data is handled. If your vendor experiences a breach or misuses the data, your business will likely bear the blame from both customers and regulators. Yet many businesses lack processes for assessing vendor privacy practices.

The solution: Vendor audits

Effective vendor management includes privacy due diligence before engagement, clear data protection terms in contracts, and ongoing vendor compliance monitoring.

For critical vendors that handle sensitive data, consider requesting evidence of their privacy and security practices, such as certifications or audit reports.

Data collection and privacy issues

How businesses collect, use, and share data is central to data privacy concerns. Many fail to follow data minimization principles, which means they gather more information than necessary.

Collection purposes are often vague. Statements like “to improve our services” provide little clarity, undermining informed consent and enabling unchecked data usage.

Sharing data with third parties adds another layer of risk. Many companies share user information with vendors, partners, and service providers without sufficient safeguards or transparency, leaving users unaware of how widely their data is distributed.

At the same time, tracking technologies have made online privacy even more complicated. Third-party cookies have long enabled cross-site tracking, creating detailed user profiles for targeted advertising.

However, as these cookies phase out, businesses are turning to alternative methods like browser fingerprinting, often without clear consent mechanisms.

Many cookie consent banners also still use dark patterns, such as making the option to “Accept All” more prominent than “Reject All,” or removing a rejection option entirely, nudging users toward sharing more data than they might prefer.

To maintain compliance and trust and mitigate internet privacy concerns, companies must rethink their approach. They must regularly audit data collection and tracking practices while prioritizing transparency and user choice. This maintains a balance between personalization and privacy.

Examples of data privacy issues

If you’re struggling with data protection and privacy issues, you’re not alone, but it’s worth it to rethink your approach. The below privacy issue examples highlight the risks businesses face when data protection is overlooked.

Here are three notable cases:

• Equifax Data Breach (2017): A failure to patch a known vulnerability led to the exposure of sensitive personal information of over 140 million individuals. This breach reinforced the importance of proactive cybersecurity measures and timely software updates.
• Facebook and Cambridge Analytica (2018): The personal data of millions of Facebook users’ was harvested without consent, fueling global concerns over transparency in data collection. The scandal underscored the need for stronger consent mechanisms and ethical data use policies.
• Google’s Location Tracking Controversy (2022): Despite users disabling location history, lawsuits alleged that Google continued tracking them. This raised concerns over misleading privacy settings and emphasized the need for clear, user-friendly consent processes.

Each of these data privacy incidents serves as a cautionary tale, demonstrating the need for transparency, strong security protocols, and user control over personal data.

Best practices for avoiding data privacy issues

Implementing strong privacy practices isn’t just about compliance, it’s about building trust with your customers and protecting your business. By following these best practices, you can create a privacy-forward approach that supports both your business goals and meets user expectations.

Develop a clear and transparent privacy policy

A well-crafted privacy policy builds trust and supports regulatory compliance. It should clearly explain what data is collected, why it is needed, how it is used, and who has access to it. Avoid legal jargon, and make it easily accessible. Regularly update the policy as regulations and business practices change.

Follow data minimization principles

Collect only the data necessary for business operations. Regularly review what information is being gathered and assess whether it is essential. If the same goals can be achieved with less data, adjust your practices accordingly to reduce privacy risks and compliance burdens.

Embed privacy by design into business practices

Privacy should be an integral part of product and service development — and operations overall — rather than an afterthought. Implement settings that are secure by default and prioritize data protection at every stage. This approach reduces the need for costly retrofitting and strengthens user trust.

Strengthen security and encryption measures

Robust security measures can prevent data breaches. Implement end-to-end encryption, multifactor authentication (MFA), and regular vulnerability assessments. A proactive cybersecurity strategy helps safeguard sensitive information from potential threats.

Implement consent management

Provide users with clear options that are easy to understand for managing their data preferences. A comprehensive consent management platform, such as those provided by Usercentrics, supports compliance with regulations like the GDPR and the CCPA. Giving users control over their data therefore enhances both trust and regulatory alignment.

Conduct regular data audits and privacy impact assessments

Frequent audits help identify unnecessary data collection and storage risks. Businesses should only retain essential data, and securely delete it when it’s no longer needed. Privacy impact assessments (PIAs) can help mitigate risks before they become major compliance issues.

Educate employees on data privacy best practices

Employees play a critical role in maintaining data security. Regularly train your teams on privacy laws, phishing risks, and secure data handling so that everyone understands their responsibilities. A well-informed team helps prevent accidental breaches and compliance failures.

Manage vendor and third-party risks

Many data breaches originate from third-party vendors. Businesses must carefully vet their partners, include strict data protection clauses in contracts, and conduct regular security assessments. Strengthening third-party risk management minimizes exposure to external vulnerabilities.

Ensure transparency in privacy communications

Privacy policies should be clear, concise, and user-friendly. Customers need to understand how their data is collected, stored, and used, as well as their rights regarding consent and data deletion. Transparency fosters trust and encourages compliance.

Stay compliant with data privacy regulations

Privacy laws are constantly evolving, and businesses must stay informed to remain compliant. Monitoring legislative updates, adjusting compliance strategies, and consulting legal experts can help organizations avoid penalties and reputational damage.

Read more about the benefits and best practices related to data privacy.

How can Usercentrics help you avoid data privacy concerns?

Usercentrics can help you handle common data privacy concerns affordably and efficiently.

Our privacy policy generator enables you to create a GDPR-compliant privacy policy. We also provide a consent management platform with customizable cookie consent banners that you can configure to meet opt-in or opt-out requirements in various regions worldwide, like California and Europe.