Consumer Data: Between Personalization and Privacy

This page is a translation of the original Portuguese text, provided for convenience. It deals with Brazilian law. If there is any discrepancy, the Portuguese version prevails. Read the original in Portuguese

With every click, like, or online purchase, companies accumulate data that reveals consumers’ most intimate habits, and the line between convenience and invasion of privacy has never been thinner.

The Strategic Value of Consumer Data in the Digital Economy

We live in an era in which consumer data has become one of the most valuable assets for companies of every size and industry. When we browse an online store, use a food delivery app, or simply search for a product in a search engine, we leave digital traces that are collected, stored, and processed by increasingly sophisticated algorithms. This information feeds recommendation systems, targeted marketing campaigns, and dynamic pricing strategies that shape the consumer experience in ways that are often imperceptible.

From a business standpoint, data-based personalization offers a significant competitive advantage. By understanding their customers’ behavior patterns, organizations can anticipate demand, cut spending on generic advertising, and increase conversion rates. From a legal perspective, however, the mass collection of consumer data raises fundamental questions about the rights to privacy, to informational self-determination, and to the protection of personal data, all of which are enshrined in Brazilian law.

The General Data Protection Law (LGPD, Law 13.709/2018) established a regulatory framework that sets clear limits on how organizations may handle personal data. In the consumer context, this means that collecting information about preferences, purchase history, location, and browsing patterns must follow principles such as purpose, adequacy, necessity, and transparency. Companies that ignore these requirements expose themselves to administrative penalties, lawsuits, and considerable reputational harm. For more information, see the firm’s article on Data Protection and Consumer Relations.

Data Due Diligence: A Necessity for Responsible Companies

The term “data due diligence” refers to the structured process of evaluating, verifying, and auditing the personal data processing practices an organization uses. For consumer data, this analysis takes on special importance because the information involved can reveal sensitive aspects of data subjects’ lives, such as health conditions (inferred from pharmacy purchases), religious beliefs (deduced from purchases of particular books or foods), and political orientation (suggested by donations or magazine subscriptions).

When we conduct a data due diligence review for a consumer-facing environment, we look at several critical points. First, we examine the legal bases used to justify the processing. Many companies rely solely on the consumer’s consent, without realizing that in many situations, other legal bases provided for in the LGPD (such as performance of a contract or legitimate interest) would be more appropriate and legally sound. Second, we assess the proportionality of the collection, that is, whether the amount and type of data collected are truly necessary for the stated purpose.

Another key issue is the data-sharing chain. Consumer data frequently passes through multiple parties: the company making the sale, the payment platform, the logistics provider, the digital marketing vendor, and any commercial partners. Every link in that chain must comply with the law, and the due diligence review must map the entire flow to identify vulnerabilities and responsibilities. Without that mapping, security incidents can occur, and their consequences can spread in unpredictable ways.

Essential Elements of a Consumer Data Due Diligence Review

For a due diligence review to be effective, a few elements must be in place. The data inventory is the starting point: it catalogs all the personal data collected, identifying its source, purpose, legal basis, retention period, and recipients. Without this complete map, any later analysis will be partial and potentially misleading.

Legitimate personalization does not require surveillance. It requires transparency, proportionality, and respect for the consumer’s autonomy over their own data.

A risk assessment complements the inventory by classifying each processing activity according to the likelihood and impact of potential violations. Processing that involves data on children and teenagers, automated decisions with significant effects, or international transfers calls for additional safeguards and, in some cases, the preparation of Data Protection Impact Assessments (Relatórios de Impacto à Proteção de Dados Pessoais, or RIPD), as provided for in the LGPD. You can also check the firm’s content on Consumer Data Protection.

Personalization Versus Privacy: A Workable Balance

One of the most important debates at the intersection of law and technology concerns the apparent conflict between personalization and privacy. On one side, consumers show a preference for customized experiences that save time and present products and services matched to their real needs. On the other, there is growing concern about the misuse of personal information, behavioral manipulation, and the creation of profiles that can be used in discriminatory ways.

In our view, this conflict is, to a large extent, a false dilemma. Responsible personalization does not depend on indiscriminate data collection, nor on building exhaustive profiles without the data subject’s knowledge. It is entirely feasible to offer personalized experiences using aggregated, anonymized, or minimized data, protecting individual privacy without sacrificing commercial efficiency. Techniques such as differential privacy, federated computing, and pseudonymization make it possible to extract valuable insights from consumer data without exposing information that directly identifies individuals.

The Consumer Protection Code (Law 8.078/1990) already contained relevant provisions on consumer databases, even before the LGPD. Article 43, for example, guarantees consumers access to the information held in files, records, and registries about them, as well as the right to demand correction of inaccurate data. This protection, combined with the rights provided for in the LGPD (such as the rights of access, rectification, deletion, and portability), forms a robust legal framework that companies need to build into their day-to-day operations.

Abusive Practices in the Use of Consumer Data

We often see practices that, although widespread in the market, violate consumers’ rights. Discriminatory pricing based on behavioral profiles (when different consumers are charged different prices for the same product based on their browsing history or location) raises serious questions under the principles of equality and contractual good faith. Likewise, so-called “dark patterns” (interfaces designed to push consumers into sharing more data than they would like) directly violate the principle of transparency.

Another troubling practice is the indefinite retention of consumer data. Many companies store customer information for far longer than the original purpose of collection requires, creating repositories that become attractive targets for cyberattacks and unauthorized secondary uses. The LGPD is clear that personal data must be deleted once the processing ends, except in specific cases where retention is permitted. Learn more about Health Wearable Data.

Practical Aspects of Compliance for Companies

For companies that process consumer data (and nearly all of them do, to a greater or lesser degree), complying with data protection law should not be seen as a bureaucratic obstacle, but as a competitive advantage and a sign of respect for the consumer. Implementing a privacy governance program involves steps that, when done well, strengthen the relationship of trust with the public and significantly reduce exposure to legal risk.

Appointing a Data Protection Officer (DPO), drafting clear and accessible privacy policies, training employees on a regular basis, and putting technical information security measures in place are the pillars of this governance. It is also essential that contracts with suppliers and commercial partners contain specific data protection clauses that define responsibilities and set minimum security standards.

As part of due diligence, we recommend that companies conduct periodic audits of their consumer data processing practices, preferably with the help of professionals who specialize in digital law and data protection. These audits should cover not only the legal aspects but also the technology infrastructure, organizational processes, and corporate culture around privacy. The National Data Protection Authority (ANPD) has stepped up its enforcement activity, and companies that take a proactive approach to compliance tend to receive more favorable treatment in any administrative proceedings.

Future Trends and Challenges

The regulatory and technological landscape surrounding consumer data is constantly evolving. The global trend points toward stronger rights for data subjects and growing accountability for those who process data. In Brazil, the ANPD continues to issue regulations on specific aspects of the LGPD, and new guidance on topics such as automated decisions, international transfers, and the processing of children’s and teenagers’ data is expected to have a direct impact on the consumer sector.

The rise of generative artificial intelligence adds another layer of complexity to this debate. Models trained on consumer data can reproduce discriminatory patterns found in the original data, generate biased recommendations, and make decisions that significantly affect consumers’ lives without adequate algorithmic transparency. The regulation of artificial intelligence, currently under discussion in Brazil’s National Congress, is expected to establish specific safeguards for these situations.

From a due diligence standpoint, we see that methodologies must continually adapt to keep pace with new data collection and processing technologies. The Internet of Things (IoT), virtual assistants, and wearable devices exponentially expand the surface for collecting consumer data, making data flow mapping a permanent challenge. Companies that invest in flexible, scalable governance infrastructure will be better positioned to navigate this changing environment.

As informações deste artigo são de caráter informativo e não substituem consulta jurídica individualizada. Cada caso possui particularidades que exigem análise específica.