Startups should have some concern about legal hassles surrounding big data. There are many gray areas in the law, and that causes a lot of confusion for legal staff, business executives and startup owners. While knowing the law is one thing, practicing proper protocols is another. It is important to have access to a legal expert at all times to ensure that your startup is following big data rules and stays out of the courtroom.
Acquisition Situations
During mergers and acquisitions, startups tend to forget that a disclosure needs to be included in the terms of use and privacy policies, which includes the fact that stored consumer data goes with the sale of the company. Companies are also supposed to inform its registered consumers of a sale of the company and what it means about their stored personal data.
Intended Use of Collected Data
The intended use of any collected data in a business database must serve a specific intended purpose. Those purposes must be stated in the terms of use and privacy policies as well. Consumers have a right to know what companies are doing with their personal information. Sensitive personal data such as social security numbers, credit/debit card numbers and banking information cannot be included in an acquisition as this is not a safe practice.
The intended use of collected data should include a section about data collected for predictive purposes such as election predictions, industry trend predictions, stock predictions, and product launch excitement.
Terms of Use Clarification
The terms of use for your website should be clear and to the point. Forget the inclusion of legal jargon as much of society just does not understand it. Keep everything in simple terms and provide examples of pieces of data so that consumers can see what information is being used. It is also a good idea to explain why some pieces of information are being collected and how they will be used. An informed society is a happy society.
Types of Data Collected
The types of data collected must be kept to simple information. For example, if your startup is conducting market research regarding sleeping habits and beds, age groups rather than birth dates should be used. A persons city/state are also the only pieces of information really needed other than major medical conditions that hinder sleeping habits. If information outside of generalizations is collected, consumers can seek legal action against a company for misuse of private information.
It is vital that the information collected by your startup falls within the parameters of the law.
Hidden Collection Efforts
If you knowingly collect data that your consumers are unaware of, your startup can face legal troubles. You cannot keep information that consumers have not consented company use for. Hidden collection efforts can be seen as a failure to protect intellectual property, which can result in big trouble.
When data collection software is not properly written, even if the startup did not create the program, it can be held responsible in the event of a security breach, improper use of personal information, and can also be deemed as a breach of consumer use agreements. To avoid this potential issue, ensure that you have fully tested the data collection software for every potential issue and fix bugs before the collection of information begins.
Disclosure Placement
Even with a disclosure in place, there is bound to be that one thing that just gets left out. That leaves both the startup and its followers vulnerable. The thing here is, collecting too much information is a breach of consumer privacy, which can result in a huge class-action lawsuit.
Retain a Business Attorney
All startups should have an educated business attorney available to them. This attorney should be retained before the launch day. The attorney should review all of the terms of use, disclaimers, and privacy policies in place regarding the startups data collection processes. If there are any gray areas, improper use intentions or areas of concern, the attorney should advise the startup to make changes immediately.
Closing Thoughts
It is important to really take your time as a startup to avoid potential legal hassles. The rules about data collection change and it is important to stay up-to-date on those changes to ensure that your business is not infracting any rules that could lead to potential lawsuits and major legal hassles.
