Summary
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Privacy obligations vary depending on your business size, data practices, industry, and geographic reach.
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The Privacy Act and Australian Privacy Principles set key requirements for handling personal information, particularly for APP entities.
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Establishing strong privacy practices early supports compliance, reduces legal risk, and builds trust as your business grows.
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This article explains privacy obligations for business owners in Australia, outlining compliance across the business lifecycle.
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Prepared by LegalVision’s privacy lawyers. LegalVision, a commercial law firm, specialises in advising clients on privacy compliance.
Tips for Businesses
Identify whether your business is an APP entity and map what personal information you collect and why. Implement a clear privacy policy and internal procedures for handling employee and customer data. Appoint a privacy officer, secure devices and systems, and prepare for data breaches. Review obligations regularly, especially when expanding or entering overseas markets.
When thinking about starting a new business, you will need to consider your privacy obligations. These obligations will vary depending on the:
- size of your business;
- types of data you handle;
- category of goods or services you sell; and
- countries that you operate in.
In this article, we examine the life cycle of your business’s privacy obligations and discuss why it is important to think about privacy from the very beginning.
Which Privacy Laws Apply?
The Privacy Act contains the rules with which businesses must comply regarding the handling of personal information. Within the Privacy Act are the Australian Privacy Principles (APPs). These principles apply to:
- small businesses with an annual turnover of more than $3 million;
- health service providers;
- businesses which disclose or trade personal information;
- service providers under Commonwealth contracts; and
- credit reporting bodies.
If your business fits into one of these categories, you will be known as an APP entity. APP entities must comply with the APPs. These principles set standards for privacy protection of personal and sensitive information.
Privacy Obligations for Startups
Establishing sound privacy practices from the beginning of your business will set a good foundation for compliance down the track. Even if you have few privacy obligations at the start, this may change as you grow, so you need to be prepared. Establishing good privacy practices also has commercial benefits, including:
- impressing potential investors; and
- boosting confidence in customers.
Internal Processes
As an employer, you will need to collect data on your employees’ personal information, including:
- contact details;
- bank details and tax file numbers;
- employment and education background; and
- health details.
An internal privacy manual should set out:
- what you use this information for;
- where it is stored;
- any situations where you may need to pass it on to third parties, including to Fair Work or other government agencies; and
- the process employees should follow to make a query about their privacy.
Customer-Facing processes
Regardless of whether you are an APP entity or not, having a clear and up-to-date privacy policy is recommended.
It is best practice to have a privacy policy if:
- your business collects personal or sensitive information from consumers;
- consumers can subscribe to mailing lists through your website; or
- you sell online.
Your business may not be an APP entity at the start, but you can register to opt into the Privacy Act through the Office of the Australian Information Commissioner (OAIC). Compliance can be straightforward and inexpensive to manage, and by opting in, you will instil confidence in consumers by showing that you take their privacy seriously.
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Small to Medium Businesses
When your business’s revenue increases, you might become an APP entity and will need to comply with the Privacy Act.
When your business grows, you may choose to provide employees with devices like mobile phones and laptops. If someone loses a device, they may also be losing sensitive information. Therefore, your privacy manual should set out what will happen in circumstances where devices might go lost.
If your business is an APP entity, you will also fall under the Notifiable Data Breaches Scheme. Here, there are specific steps you will need to take if a data breach occurs.
Overseas Privacy Obligations
If you are considering expanding your business to Europe, you may do so by remaining within Australia, but sell to European businesses and consumers.
If so, you will need to comply with the European Union’s (EU) General Data Protection Regulation (GDPR). GDPR compliance is imperative, and you could face fines of up to €20 million or 4% of your annual turnover if you do not follow these principles.
This factsheet explains what a data breach is and when one is serious, your reporting obligations, and limiting an NDB’s impact.
Key Takeaways
Regardless of what stage you are up to in your business’s life cycle, you must comply with the relevant privacy laws. Establishing good practices from the start will set you up for compliance as you grow. Good practices will also limit the risk of fines for breaching privacy laws.
LegalVision provides ongoing legal support for businesses through our fixed-fee legal membership. Our experienced privacy lawyers help businesses manage contracts, employment law, disputes, intellectual property, and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision’s legal membership, call 1300 544 755 or visit our membership page.
Frequently Asked Questions
No. The Privacy Act generally applies to businesses with over $3 million annual turnover and certain types of organisations, such as health service providers or those handling personal data. However, smaller businesses may still choose to opt in or be indirectly affected.
Establishing privacy practices early helps avoid costly changes later, supports compliance as you grow, and builds trust with customers and investors.
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