If your business collects personal data, you must manage it responsibly. An important section of any privacy policy is the "How Long We Keep Your Information" clause, also known as a Data Retention Clause. This part tells users how long you will hold their data and when it will be erased.
This clause is not just about transparency - it's required by law in many regions and protects your business from legal and security risks. Without a clear retention policy, your business can face fines, data breaches, and customer distrust.
Let's explore why this clause is important, what the law says, and how you can create one for your business.
Defining how long you keep data is essential for ensuring compliance with global privacy regulations, reducing security risks, and building customer trust. A clear retention clause ensures data is stored only as long as necessary and securely deleted when no longer needed.
Most businesses gather a large amount of personal data. This data includes names, email addresses, payment information, and browsing history. Retaining unnecessary data for too long increases the risk of compliance issues and security breaches. Proper data retention practices help businesses manage data effectively and minimize potential risks.
Here are the key reasons why defining data retention periods is essential for your business.
Governments around the world have made laws to protect personal data. They also regulate how long businesses can keep this information. Some laws say you must delete data when it's not needed anymore. Others require you to inform users about your retention policy.
The General Data Protection Regulation (GDPR) in Europe is one of the most stringent. It demands that businesses justify how long they store data and delete it when it's no longer required. Failing to comply can lead to fines of up to €20 million or 4% of global annual revenue.
The California Consumer Privacy Act (CCPA) requires businesses to disclose how long they retain personal information. They also need to respond to requests for deleting that information. Businesses that fail to meet these obligations risk fines of $2,500 per violation, which can quickly escalate.
The longer you store personal data, the more vulnerable it becomes. Hackers often target outdated records because businesses don't monitor them as closely. Storing unnecessary data increases your exposure to cyberattacks.
The Equifax breach in 2017 affected 147 million people. This was partly due to the company's decision to store data longer than necessary. Had they implemented a stricter retention policy, they could have reduced the damage.
Getting rid of unnecessary data reduces your risk. It also makes your company a less tempting target for cybercriminals.
Modern consumers care deeply about how their personal data is handled. If your policy states that you store data only as long as necessary, it reassures users that you respect their privacy. Transparency builds customer trust and loyalty. Businesses that openly explain their data practices are more likely to retain long-term customers.
Storing unnecessary data is expensive. Cloud storage, server maintenance, and security monitoring all come at a cost. Businesses that don't delete old information waste resources and slow down their systems.
By implementing a structured data retention policy, you reduce costs and improve efficiency.
Several major regulations around the world require businesses to implement and disclose clear data retention policies. These laws ensure that companies only keep personal data for as long as necessary and delete it when it's no longer relevant. Failing to comply can result in hefty fines, legal complications, and damaged customer trust.
Knowing the laws that apply to your business is crucial. This is especially true if you operate internationally or collect data from users in different areas. Countries have their own rules. Still, most focus on three main things: data minimization, transparency, and secure deletion.
Here are some laws that require businesses to include a "How Long We Keep Your Information" clause in their privacy policies.
GDPR enforces data minimization and requires businesses to retain personal data only for as long as necessary. Companies must specify retention periods and delete data when it is no longer needed.
For example, an e-commerce company could keep customer orders for seven years for tax reasons. However, it deletes browsing history after 12 months.
CCPA does not impose specific time limits, but it mandates that businesses inform users about how long they retain personal data. Consumers also have the right to request data deletion.
PIPEDA requires businesses to keep personal data only as long as necessary for its intended purpose. Businesses must securely delete data once that purpose is fulfilled.
LGPD is Brazil's version of GDPR. It highlights the need for transparency. Businesses need to explain why they keep data for specific times. They must also make sure not to keep it longer than necessary.
Now that you understand the laws, let's explore how to create a solid data retention clause for your business.
When creating a "How Long We Keep Your Information" clause, you need to follow a structured process. This keeps your business compliant with data privacy rules. It also ensures security and transparency.
Here's a step-by-step guide to help you build an effective data retention policy.
Before writing your clause, first check all personal data your business collects and processes. This includes basic customer info, such as names and email addresses. It also covers sensitive data like payment history, health information, and online behavior.
For example, an e-commerce company might collect:
A financial institution, however, often stores transaction logs, credit histories, and compliance documents. This is done to meet regulatory requirements.
The audit aims to sort data. This way, you can set different retention periods depending on its importance and legal needs.
Once you've identified the data you collect, it's time to assign retention periods. These periods should align with both legal requirements and business needs. Some data must be kept for several years, while other information can be deleted much sooner.
Using these principles keeps your retention periods justified and meets regulations. This helps your business manage data responsibly and ensures it's kept only for valid reasons.
The next step is to explain how long you keep different types of data and why it's necessary. This helps your business comply with legal requirements and remain transparent to users.
Common reasons for keeping data include:
For example, a healthcare provider might keep medical records for 5 to 10 years to meet legal requirements and support patient care. Meanwhile, a retail business may store marketing data for only 12 months to analyze sales trends and improve customer engagement.
In another case, Google Analytics properties let businesses choose how long to keep user-level data. Businesses can select to keep data for 2 months, 14 months, or even longer. This helps them retain only the relevant information needed for analysis. This retention helps track user behavior and measure website performance. It also improves marketing strategies and ensures compliance with data protection laws like GDPR.
A key part of your retention clause is explaining how and when data will be deleted. Data deletion can be handled in several ways:
Automated deletion is ideal for businesses with large datasets, as it reduces human error. For sensitive data like financial or health records, it's vital to make sure deletion processes are secure and permanent.
Many privacy laws, such as GDPR, give users the right to request the deletion of their personal data--also known as the Right to Be Forgotten. To comply, your "How Long We Keep Your Information" clause needs clear instructions. This shows users how to exercise their rights. Providing a transparent process builds trust and ensures your business meets legal obligations.
Here's a practical example of how you can word this in your privacy policy:
"If you wish to have your personal data deleted, please contact our support team at [email protected]. We will process your request within 30 days, provided there are no legal obligations requiring us to retain certain data."
You can also offer your users a structured GDPR Request Template to help them submit accurate and complete requests that includes:
Including a template or link in your privacy policy makes it easier for users to send accurate requests. It also helps your team manage the process smoothly.
As mentioned earlier, different industries have unique data retention needs. Depending on the nature of the business, the "How Long We Keep Your Information" clause can vary significantly in terms of what data is retained and for how long.
Below are some examples of how retention periods might differ by industry:
Knowing these industry specifics helps you adjust your retention clause. This way, it fits both regulatory and business needs.
To ensure your "How Long We Keep Your Information" clause is clear, accessible, and easy for users to understand, follow these best practices:
To ensure users can easily find the "How Long We Keep Your Information" clause, it's essential to include it as part of your Privacy Policy. Ideally, this clause should be in a dedicated section and linked in your site's footer or table of contents for quick access.
Placing it in these key areas ensures visibility, accessibility, and compliance. This makes it easier for users to understand how their data is handled.
Also, to ensure your 'How Long We Keep Your Information' clause remains effective and compliant, here are some common mistakes to avoid. Addressing these will help maintain user trust and prevent potential legal risks.
Including a "How Long We Keep Your Information" clause in your privacy policy is essential for ensuring transparency and regulatory compliance. This clause provides users with a clear understanding of how long their data is stored and the criteria for its deletion.
When writing this clause, make sure to include the following key points:
By addressing these points, your "How Long We Keep Your Information" clause will help keep your business transparent and compliant with key data protection regulations.