Data is essential to your business operations – but it is also one of your biggest risk factors. Threat actors are constantly developing new tactics to reach it, and as the way we store sensitive information changes, old security measures may no longer be enough. It is to this end that the Australian Privacy Act (1988) was reformed late last year. Keeping up-to-date with these changes is critical to ensure that you remain compliant and safe.
So what exactly were these reforms? And more importantly, what do they mean for your business?
Why the Australian Privacy Act Matters
The Privacy Act was groundbreaking when it was first introduced in the 1980s. It represented a shift towards stronger data protection laws that has continued to this day. As information becomes more and more important for businesses, the need for strong defences has only become more pressing. Modern cyber-attacks typically target data, and the amount stored is so vast that a single breach has dire consequences. Millions of individuals can be affected. The impact for you may be:
- Lost data that significantly hampers business operations
- The financial costs associated with response, recovery, and legal issues
- Reduced profitability due to a drastic loss in client trust and loyalty
- A range of legal penalties that can slow down or even halt your normal processes
Obeying the Privacy Act is important to avoid these negative outcomes.
Penalties for a Breach of the Privacy Act
A breach of the Privacy Act can result in severe consequences. Serious or repeated offenses may incur the following fines:
- $50,000,000
- Three times the value that your business obtained from the actions that led to the violation
- 30% of your business’ turnover during the period when the violation occurred
These are only the short-term financial penalties. An even more worrying consequence is the loss of customer trust. When individuals hand over their data, they expect it to be treated with care. Breaching the Privacy Act demonstrates that you do not take their safety seriously, which will stop them from coming back and reduce your profits over time.
The potential consequences of breaching the Privacy Act are not worth the trouble. Compliance is crucial to ensure success and growth.
The Privacy Act Reform: What You Need to Know in 2025
The recent Privacy Act changes will significantly impact how your business operates in 2025. Here are 5 key amendments you need to consider:
1. New Penalty System
The penalty system has been altered to focus less on the concept of “repeated offences”, and more on whether an offence has occurred at all. While your past actions are still considered relevant context, penalties will now be distributed on a case-by-case basis. This means a single violation could cost you up to $3,300,000.
The amendment also introduced penalty tiers based on how serious the breach was. As repeated violations are no longer necessary to incur punishment, the nature of the offence will determine the amount incurred. Please note that the $3 million fine mentioned above is the maximum penalty for a “non-serious” violation.
2. New Powers for the Privacy Commissioner
Under certain circumstances, the Commissioner may now conduct public inquiries into data privacy matters. During these inquiries they may obtain documents and witness statements. The Commissioner also has extended entry, search, and seizure powers during an investigation.
3. Statutory Torts
The government is introducing statutory torts for serious invasions of privacy. These will generally apply when a plaintiff’s information has been recklessly misused or wrongfully collected, in situations where they had a reasonable expectation of privacy. If these circumstances are met, you may be required to pay damages to the affected individual.
4. Disclosure of Automated Decision-Making
Businesses subject to the Australian Privacy Principles (APPs) must now disclose within their privacy policies when decisions regarding an individual’s personal information are automated. This also extends to when automation is a significant part of the decision-making process.
5. Overseas Data Flows
The revised Act requires that when data is transmitted overseas, the recipient must take all reasonable steps to ensure that they comply with the APPs. There will be a mechanism in place to “whitelist” certain countries, which will not be subject to these rules. This amendment shifts the responsibility of data protection to include both parties involved in the data transfer.
Privacy Act Compliance in 2025
These are just a few of the twenty-one changes expected to take effect in the near future. As these will be gradually introduced over a long period, you must be careful not to fall behind. Swift action now to ensure you’re compliant could save you a lot of grief in the future. Here are some tips to help you reach Privacy Act compliance in 2025:
Review and Update Your Privacy Policies
Make sure your privacy policies reflect the expanded definitions, rights, and transparency obligations, including those regarding automation. Speak plainly, avoid legal jargon, and keep this information easily accessible. This is a bad time to be vague – privacy laws around the world are prioritising transparency above all, which means you must as well.
Conduct a Data Audit
In this new era, careful handling of personal information will be more critical than ever. Map the personal data you collect, where you store it, and how it’s processed. Identify any third parties involved, and confirm that they also comply with the updated Privacy Act – even if they are located overseas.
Embed Privacy Into the Heart of Your Business
Build privacy into the very foundation of your business. Consider how you will ensure the security of sensitive data at every stage of its lifecycle, from collection to disposal. Adopt encryption and access control as a company-wide standard.
Train Your Team
All staff within your business should understand the importance of this reform, as well as secure data handling procedures. Clearly explain what is expected of them, and what failure could mean for the business. Make sure they know when disclosing personal information is acceptable, and when it is not.
Prepare for Data Requests
Prepare the process that will take place when an individual asks for their data to be altered or removed. Many privacy laws are beginning to solidify a person’s right to be erased from databases. Ensure that you’re able to comply with this.
Keep a Record
Establish a written record of all compliance activities and update it regularly. Develop a plan for when and how authorities will be notified in the event of a breach. These measures could save your business if you’re ever audited.
Get Ahead of Privacy Act Changes or Be Left Behind
Last year’s Privacy Act reforms are a signal of the importance that data security will have in the future. Ignoring this societal shift is a big mistake that could cost your business dearly in the long run. Only companies who choose to embrace these changes will foster trust, avoid fines, and ensure growth. As data privacy laws tighten around the world, you must decide whether you’ll take advantage of this opportunity and get ahead, or be left behind.
Still unsure how to protect your data and remain compliant with the new reforms? Read our blog on data security in the cloud for more information.