2025 Data Privacy Laws: How to Future-Proof Your Data Strategy

By Lindsey Kilen

Published on September 23, 2024

Did you know that over 90% of Americans are concerned about how their data is collected and used online? (Cisco 2022 Consumer Privacy Survey). This growing awareness of the importance of data privacy has caused a major shift in how companies are required to handle consumer information.

As we move into 2025, evolving state-level legislation and the introduction of the American Privacy Rights Act of 2024 will bring about even more change. Specifically, companies across the US will need to change their data management practices to stay ahead of new regulations and avoid costly penalties.

In this post, we’ll explore what’s coming, how it will affect data management practices, and the steps you can take to prepare.

What is data privacy and why does it matter?

Data privacy refers to the protection and appropriate use of personal information that is collected, stored, and processed by organizations. This includes everything from names and email addresses to sensitive health and financial data. The rise of digital technologies and AI have amplified the volume and complexity of personal data being shared, making it more critical than ever for data professionals to ensure that the collection and processing of this data is up to both legal and ethical standards.

The importance of data privacy cannot be overstated. Safeguarding customer data is essential for avoiding costly fines and maintaining public trust. High-profile data breaches over the past decade, including those involving Facebook and Equifax, have shattered consumer confidence. These rising concerns are driving more stringent regulations, and as data professionals, you’ll need to be at the forefront of these compliance efforts.

Trends in state-level data privacy laws: More states, more rules

The state-by-state patchwork of data privacy laws will be a major challenge for businesses in the coming year. Since the introduction of the California Consumer Privacy Act (CCPA), other states like Delaware, Iowa, New Hampshire, Tennessee, Virginia, and Colorado have passed their own data privacy legislation.

Source: IAPP

Each law has unique requirements. For example, the Virginia Consumer Data Protection Act emphasizes user consent and transparency, while Colorado’s law focuses on data minimization and purpose limitation. These discrepancies create a maze of regulations that will require data governance strategies that are flexible enough to comply with a variety of legal requirements.

Despite varying details and enforcement mechanisms, there are several key trends for privacy laws going into effect in 2025.

Key trends for data privacy in 2025

1. Enhanced consumer rights

One of the most notable trends across the new privacy laws is the emphasis on empowering consumers with more control over their personal data. Each of the upcoming state laws introduces or strengthens key rights for individuals, including:

Right to access: Consumers have the right to know what personal information businesses are collecting, storing, and sharing.
Right to correct and delete: Individuals can request corrections to inaccurate data and delete personal information that businesses no longer need for legitimate purposes.
Right to opt out: Consumers can opt out of having their data sold or used in targeted advertising.

These consumer rights underscore a growing expectation for businesses to be more transparent and responsive to individual concerns, ultimately giving consumers greater control over their digital footprints.

2. Explicit consent for sensitive data

Another recurring theme in these state laws is the need for businesses to obtain explicit, informed consent before processing sensitive personal information (AKA personally identifiable information or PII). Sensitive data may include categories such as financial information, health data, biometrics, and racial or ethnic details. Businesses must now ensure that they collect this type of information only after clearly informing consumers about its use and obtaining their consent.

This focus on informed consent represents a significant shift from passive data collection practices to a more active, user-driven process.

3. Clear data collection and usage transparency

Businesses are required to provide clear, easily understandable notices that explain:

What personal data are they collecting,
Why the data is being collected,
How the data will be used, shared, or sold, and
Whether it will be used for targeted advertising or profiling purposes.

Many states also require businesses to publish updated privacy policies that reflect these disclosures.

4. Mandatory data security measures

Businesses will be required to implement “reasonable” security measures to protect personal data from unauthorized access and to prevent data breaches.

While the specific requirements vary from state to state, businesses are generally expected to:

Regularly assess and update their cybersecurity protocols,
Conduct risk assessments to identify potential vulnerabilities,
Securely store sensitive data, and
Ensure that data is encrypted both in transit and at rest.

5. Enforcement and penalties

A key area of difference across the state privacy laws lies in enforcement. While some states have given their Attorney Generals the power to enforce these laws and issue fines, others also provide individuals with the right to take legal action directly against businesses (often referred to as a "private right of action"). This variation in enforcement mechanisms will be crucial for businesses to understand, as some laws will come with more stringent penalties for non-compliance than others.

Additionally, some laws introduce mandatory timeframes for businesses to respond to consumer requests related to data access, deletion, or correction. Failure to respond within the specified timeframe can result in penalties or increased scrutiny from regulators.

The American Privacy Rights Act of 2024: The law we’ve all been waiting for?

The American Privacy Rights Act of 2024 (APRA) is poised to become a game-changer for data privacy in the U.S in 2025. This act, if passed, is set to standardize the various state laws and provide businesses with a clearer roadmap for compliance.

The APRA is seen as the U.S. counterpart to the European Union’s General Data Protection Regulation (GDPR), but with a few critical differences. While GDPR requires businesses to have a designated Data Protection Officer (DPO), APRA leaves this requirement up to the discretion of the organization, offering more flexibility in how companies manage compliance.

For data professionals, this federal standard offers some relief, as it simplifies the complexity of many state-level regulations. However, it also places additional responsibilities on businesses to stay compliant with a more robust and far-reaching set of rules.

So, what’s in APRA? Here are some key provisions.

Key provisions of APRA 2024 (and how to prepare)

Expanded consumer rights

Similar to the CCPA, consumers will have the right to access, correct, and delete their personal data. Additionally, they will have the option to limit how companies use or share their data.

Data leaders need to prepare for this mandate by implementing workflows that enable their data users to respond to these requests within the specified timeframe. Tools such as PII Data Discovery Software can ease and accelerate this process.

Stricter consent requirements

The act mandates that companies obtain explicit consent before collecting sensitive personal data, such as biometric or health-related information.

Data leaders should work with the relevant legal and communications teams to add consent-gathering workflows to external communications, alongside the appropriate legal language to comply with this requirement.

Accountability for data processors

Unlike previous laws that focused primarily on data controllers (those who collect data), APRA introduces obligations for data processors (third-party vendors who handle data on behalf of businesses).

If your role qualifies as a data processor under the law, it’s crucial to ensure compliance by updating contracts with data controllers, tightening your data protection practices and clearly documenting your compliance efforts. Focus on enhancing security protocols like encryption and timely breach notifications, and maintain transparency to prepare for potential audits. Taking these steps will help you align with legal requirements and build trust with your clients.

Hefty fines for non-compliance

In 2025, non-compliant companies may face fines of up to 4% of their global revenue, which makes the cost of ignoring data privacy regulations unsustainable.

How will APRA changes impact data management?

For organizations, the upcoming changes in data privacy regulations mean that data management practices will need a significant overhaul. Whether you’re a data leader at a mature multinational enterprise or a startup, here are a few things you can do to prepare for the new laws:

Data mapping and inventory

Start by mapping out all the personal data your organization collects and processes. This means auditing exactly what personal data is being collected, where it’s stored, and who has access to it.

Having a clear, up-to-date data inventory will help you identify potential gaps in compliance and help you determine where improvements are needed.

Consent management

APRA’s focus on explicit consent means that implementing a consent management platform will be crucial for businesses looking to automate and streamline the process of capturing and tracking consent.

Update privacy policies

Your privacy policies should be transparent, accessible, easy to understand, and reflect the requirements of state laws and APRA. It’s also essential to ensure that your employees are trained on these policies to ensure consistency in how they’re applied.

Data minimization

Businesses should only collect the data they need for specific, clearly defined purposes. For data professionals, this requires re-evaluating data collection practices and eliminating the storage of unnecessary information.

Third-party vendor management

Data processors, or third-party vendors, are now firmly within the scope of the new regulations. This means you’ll need to evaluate all external data partners to ensure they meet the same high standards as your organization. Contracts should be revisited, and regular audits may become necessary to confirm vendor compliance.

Organizations that fail to adapt their data management practices to align with these new regulations risk facing severe financial penalties, reputational damage, and loss of consumer trust.

By taking these steps now to enhance your data governance strategies, you’ll not only ensure compliance but also gain a competitive advantage in a landscape where consumers increasingly value transparency and control over their personal data.

Conclusion

As 2025 approaches, data privacy is set to become an even more critical issue for businesses and data professionals alike. With the patchwork of state laws expanding and the American Privacy Rights Act of 2024 poised to introduce a new federal standard, it’s essential to be proactive. By understanding the key changes and implementing the right strategies, you can ensure compliance while maintaining trust with customers. Now’s the time to get ahead—how will your organization prepare for the data privacy revolution?