data minimization

What is data minimization?

Data minimization aims to reduce the amount of collected data to only include necessary information for a specific purpose. Its goal is to minimize risks associated with data storage and management, including data breaches, unauthorized access and misuse of personal data.

Unlike data deduplication, which focuses on data optimization among the broader data storage and management disciplines, data minimization is a principle that underpins data privacy and data protection. As organizations collect more data, one challenge they face is protecting that data. However, an organization that limits its data collection to the essentials reaps several benefits.

First, the attack surface of personally identifiable information (PII) or other valuable sensitive information that an organization collects is reduced in a data leak incident. By minimizing the amount of data collected and stored, organizations can better protect an individual's privacy, simplify data management practices, reduce storage costs and improve compliance with data protection regulations.

To be sure, data minimization makes sense as a best practice for any organization, but it is also embedded in privacy laws and regulations. The most notable, the European Union's (EU) General Data Protection Regulation (GDPR), features specific provisions related to data minimization.

Principles of data minimization

At its core, data minimization limits the collection, processing and retention of personal data to what is necessary for a specific purpose.

The following are among the key principles:

• Purpose. Data minimization is closely tied to the specific purpose for which data is collected and processed. Organizations must clearly define the purpose and only collect data that is directly relevant.
• Relevance. The data collected must have a rational link to the organization's purpose and goal for using the data, ignoring unnecessary or unrelated information.
• Legal basis for data collection. Under GDPR, data can only be collected if there is a legal basis for processing it. This includes consent, the performance of a contract, legitimate interest, vital interest, public interest and legal requirement.
• Retention limitations. Organizations do not retain data for longer than necessary. Once the data collection's purpose is fulfilled, the data is removed and deleted.
• Security. Collected data is stored securely with encryption, access controls and other security measures to prevent unauthorized access, breaches or leaks.

Data minimization benefits

The benefits of data minimization include the following:

• Streamlined compliance. By implementing data minimization practices, businesses simplify their regulatory compliance efforts, such as those required under GDPR and California Privacy Rights Act (CPRA), avoiding legal consequences for noncompliance.
• Risk limitation. By collecting less data, organizations limit the financial risks associated with noncompliance of data protection regulations.
• Enhanced customer trust. Collecting only necessary data and providing transparency about data practices help organizations build trust among their customers.
• Reduced cost. When less data is collected, organizations reduce expenses related to storage capacity and maintenance.
• Faster analysis. Less data to query, sort and process speeds up the ability to analyze that data.

Examples of data minimization

Data minimization involves collecting and retaining only the essential data needed for a specific purpose. Here are some examples of data minimization in practice:

• Customer data. A retailer collects customer transaction data to process orders and provide customer service. However, it refrains from retaining unnecessary personal details, such as Social Security numbers, unless there is a clear and legal reason to do so.
• Employee information. When an employee leaves a company, no legitimate reason exists to retain certain PII, such as the former employee's bank account numbers. Data minimization dictates that the employer must securely and quickly delete this information.
• Online forms. A website requires users to sign up for a newsletter or other information, but data minimization limits any request of the user to essential information, such as an email address. This avoids unnecessary details, such as date of birth or physical address, unless directly relevant to the service provided.

GDPR and data minimization

The EU's GDPR is among the primary reasons why data minimization has become a critical aspect of organizations' data collection efforts. Article 5(1)(c) of GDPR specifications states: "Personal data shall be … adequate, relevant and limited to what is necessary in relation to the purposes for which they are processed ('data minimisation')."

This principle is a key component of GDPR's broader framework for data protection, which champions lawfulness, fairness, transparency, accuracy, storage limitation and confidentiality.

Those six legal bases for data processing mentioned earlier -- consent, performance of a contract, legitimate interest, vital interest, public interest and legal requirement -- ensure that data is collected for legitimate reasons and any processing is justified.

US state data minimization regulation

While GDPR is law for all EU nations, there is no single federal-level data minimization compliance requirement in the United States.

CPRA was the first U.S. legislation to codify the data minimization principle on Jan. 1, 2023. Under CPRA, businesses are required to ensure that the collection, use, retention and sharing of personal information are reasonably necessary and proportionate to the purposes for which the information was collected or processed.

California is not alone. Other states have enacted data minimization requirements as part of privacy regulation. Among the state-level initiatives are the Colorado Privacy Act, Connecticut Data Privacy Act, Utah Consumer Privacy Act and Virginia Consumer Data Protection Act.