Data privacy vs security: understanding the difference

With the pressure of ever-increasing regulatory requirements mounting, data privacy and data security are of top concerns for organizations handling sensitive information. But what exactly are data privacy and security, how do they differ, and why are they important?

In this post, we will discuss the key differences between the two and why they matter. We will also take a look at several key regulatory requirements across different regions and best practices for protecting personal data and identifiable information.

What is data privacy?

Data privacy measures ensure that people control how their personal information is collected, stored, and shared, including protecting sensitive information and respecting user consent. This is at the core of ethical and compliant data handling, which safeguards against the significant financial and reputational repercussions of data breaches. 

What is data security?

Data security describes the measures taken to protect sensitive information from unauthorized access, theft, or damage. Encryption, firewalls, and secure authentication systems are some examples of tools that help prevent personal information from falling into the wrong hands.

Data privacy vs. data security: what’s the difference?

At first glance, data privacy and security seem to be very similar, but they are two distinct concepts that relate to different aspects of handling information. 

Remember: data privacy ensures that individuals retain control over their data by governing how personal and sensitive information is collected, shared, and used. Data security, on the other hand, focuses on the tools and practices used to safeguard that data from unauthorized access or malicious attacks.

While it’s possible to have strong data security measures without addressing privacy, the two must work together to ensure regulatory compliance and the ethical handling of personal information.

Can you have one without the other?

Technically, yes—but it comes with risks. For instance:

• Data security without privacy: Even with advanced encryption and firewalls in place, failing to respect user consent or follow data privacy laws can lead to compliance violations and reputational damage.
  
  
• Data privacy without security: Establishing rules for data handling is meaningless if security vulnerabilities expose personal information to unauthorized users or if your organization fails to properly train employees on safe data handling.

In practice, the two are (or should be) intertwined. The effective protection of sensitive data requires both robust security measures and a commitment to data privacy best practices.

Data privacy vs. data security: Key differences 

Here’s a side-by-side comparison of the two concepts:

Addressing privacy and security simultaneously allows organizations to build trust with customers, remain compliant, and reduce the risk of data breaches.

Protecting sensitive information in the U.S.

While regions like the E.U. have more comprehensive regulatory frameworks, in the United States, data privacy is overseen by a patchwork of federal and state laws addressing various industries and data types. These laws aim to safeguard sensitive data, ensure compliance with regulatory requirements, and enhance trust between businesses and consumers.

Below are some of the most relevant U.S. data privacy laws:

California Consumer Privacy Act (CCPA)

One of the most well-known state laws, the CCPA gives California residents (over 10% of the US population) greater control over their personal data, and now with its even stricter amendment, the CPRA, being in full effect California's data protection laws cannot be easily ignored. They require businesses to disclose what data they collect, provide options to opt-out of data sales, and establish robust measures for protecting a comprehensive range of data types identified as sensitive personal information.

Health Insurance Portability and Accountability Act (HIPAA)

HIPAA focuses on protecting sensitive health information. It mandates a risk-based approach to data security, recommending encryption and access controls, to safeguard patient records and ensure privacy in the healthcare industry.

Children’s Online Privacy Protection Act (COPPA)

COPPA sets rules for websites and online services that collect personal information from children under the age of 13. It requires parental consent, clear privacy policies, and stringent practices to protect sensitive data. It’s worth noting that many existing state laws are stricter than COPPA. What’s more, KOSA/COPPA 2.0 is expected to be reintroduced in the 119th congress, as children's online privacy is currently under heightened scrutiny due to the proliferation of social media and the government's security concerns about TikTok, in particular.

Gramm-Leach-Bliley Act (GLBA)

This regulation governs financial institutions, requiring them to explain how they handle sensitive data and implement a layer of security to protect it.

State-level privacy laws

A steadily growing number of states—19 at the time of this writing, including Virginia, Colorado, Texas, and Minnesota—have their own privacy laws to regulate data handling practices. Again, these laws vary but generally focus on protecting sensitive information and granting individuals more control over their data. Fifteen of today’s state laws are considered comprehensive, and the remaining four are considered tailored and specific.

Protecting personal data in Europe

Europe is widely regarded as a global leader in data privacy, enacting and enforcing some of the most stringent laws to protect personal data and maintain transparency in its handling. Unlike the fragmented approach in the U.S., the European Union operates under a unified framework that sets a high standard for data protection across its member states. At the same time, member states can also enact stricter legislation, and each member state has its own enforcement authority, who may interpret the regulation differently, focus efforts differently, or prioritize different enforcement actions.

General Data Protection Regulation (GDPR)

The General Data Protection Regulation (GDPR) is the keystone of Europe’s data privacy landscape and is widely considered the “gold standard” in terms of data privacy laws. Enforced in 2018 as a modernization of older legislation, GDPR applies to all organizations that process the personal data of EU citizens, regardless of where the company is based. 

Because of how many people are covered by GDPR (~453 million), many companies align their privacy programs to the GDPR to simplify compliance, and it has been widely copied by other countries, as well. It emphasizes protecting sensitive information and gives individuals control over how their data is collected, stored, and used. 

The seven principles of the GDPR are as follows: 

• Lawfulness, fairness, and transparency: Organizations must process data in a legal and ethical manner; individuals must be able to understand how their information will be used.
• Purpose limitation: Data should only be used for clearly defined and legitimate purposes and not repurposed in ways that conflict with the original intent.
• Data minimization: Businesses should collect only the data that is strictly necessary to achieve their stated purpose.
• Accuracy: Personal information must be kept accurate and up to date, with processes in place to correct or delete inaccurate data promptly.
• Storage limitation: Data should only be retained for as long as it is needed to fulfill its purpose and no longer.
• Integrity and confidentiality: Organizations must ensure that data is handled securely, protecting it from unauthorized access, theft, or accidental loss.
• Accountability: Companies must take responsibility for their data processing activities and be able to demonstrate compliance through clear policies and documentation.

Noncompliance with GDPR requirements can result in significant penalties—up to €20 million or 4% of annual global revenue, whichever is higher.

Implications

As one can imagine from the above list of regulations, there are significant potential repercussions to not protecting data privacy and security best practices. Let’s explore some of the potential implications of neglecting these crucial practices:

Data breach

When sensitive data, including personal or financial information, is exposed, companies can face:

• Reputational damage: News of a breach can severely tarnish a company’s public image.
• Operational disruption: Time and resources spent on containment, investigation, and recovery, and on notifying consumers, partner organizations, and government agencies can strain an organization.
• Regulatory scrutiny: Breaches often trigger audits or investigations, especially if regulatory requirements are involved.
• Financial costs: The average cost of a data breach in 2024 was $4.45 million globally, with the U.S. averaging $9.48 million. Expenses can include fines, legal fees, compensation for affected individuals, and the costs of system repairs and improved security measures.

Violation of privacy regulations

Lack of data privacy compliance can result in severe penalties and legal action. For instance:

• GDPR fines can reach up to €20 million, or 4% of global annual turnover. Enforcement of these regulations has gone up in recent years, with major penalties like the €390 million fine levied against Meta in 2023 for violations involving targeted advertising practices. In 2024 alone, GDPR fines exceeded €1.2 billion globally, highlighting the serious financial risks of non-compliance.
• Non-compliance with CPRA can result in penalties of up to $7,988 per violation, as well as per consumer per incident fines that can quickly exceed the violation fine, as they are “$107 and not greater than $799 per consumer per incident or [SIC] actual damages, whichever is greater."

Beyond fines, organizations may also face lawsuits from individuals or groups whose privacy rights have been violated. 

Loss of consumer trust

Trust is the foundation of any successful business. A single data privacy incident can erode consumer confidence, leading to:

• Customer churn: People are less likely to do business with companies they perceive as careless with their data.
• Negative publicity: News of privacy violations spreads quickly and can have a lasting impact on public perception.
• Loss of trust: Trust is paramount in the B2B space, where businesses entrust vendors with their customers’ data. Under regulations like GDPR, these businesses remain responsible for any loss or breach of data.

Building trust requires transparency, clear privacy policies, and proactive efforts to protect sensitive information.

Financial losses

Neglecting data privacy and security can bring significant financial repercussions, including:

• Regulatory fines: As mentioned, non-compliance can result in hefty penalties.
• Cost of breach recovery: Costs add up quickly, from forensic investigations to legal fees. 
• Revenue impact: Loss of consumer trust can directly affect sales and long-term profitability.

Best practices for data security

As we’ve seen, data security is critical for protecting sensitive information against unauthorized access and potential breaches. Implementing strong security measures can build a solid foundation for protecting personal data and help meet regulatory requirements.

Here are some best practices for effective data security:

• Know what data you have: conduct a review of the data that you have, how it is being handled and protected
• Conduct a risk assessment to identify and evaluate potential security risks
• Implement multi-layered security measures
• Conduct regular security audits
• Develop an incident response plan
• Limit data access 
• Use multi-factor authentication (MFA) and strong password policies
• Educate staff on recognizing phishing attacks and other common threats

Best practices for data privacy

Protecting personal data and adhering to privacy regulations requires more than just security tools. Doing so properly demands a thoughtful approach to how data is collected, stored, and shared.

Here are some key best practices for data privacy:

• Establish clear privacy policies (a requirement of most data protection regulations)
• Enforce data minimization, gathering only as much information as necessary for your business processes
• Implement purpose limitation to ensure that data is only used for the purposes it was collected for
• Regularly review regulatory requirements
• Leverage data anonymization, using techniques like masking, tokenization, or synthesis, to enable the use of safe, realistic data in analytics, software testing, and AI development, without putting sensitive information at risk of exposure
• Enable user control to access, modify, or delete data
• Ensure partners adhere to the same data privacy standards (also a requirement of some data protection regulations)

Data privacy vs. data security: Key takeaways

Maintaining strong data privacy and security practices is key for any and all organizations handling sensitive information. Here are the key points to remember:

• Data privacy ensures user control over their information, while data security protects it from unauthorized access.
• Regulations like GDPR and CCPA demand robust practices for protecting sensitive data.
• Secure your systems with multi-layered protection and respect user privacy through transparent policies.
• Strong data protection safeguards your reputation, fosters consumer confidence, and supports business growth.

For data teams, integrating these practices into everyday workflows ensures compliance and reduces risk while strengthening organizational resilience.

Maintain data privacy with Tonic Structural

At Tonic.ai, we understand the unique challenges of balancing data privacy and security with data utility. Platforms like Tonic Structural and Tonic Textual are built to help you protect your organization’s sensitive information to achieve compliance with regulations like GDPR, HIPAA, and CCPA, while also preserving your data’s utility for software testing and AI model training. By enabling secure, privacy-preserving workflows in your development cycles, Tonic.ai allows your team to innovate with confidence.

Ready to take the next step? Connect with our team to learn how Tonic.ai’s solutions can simplify your approach to data privacy and security.