The Cost of Non-Compliance with the Data Privacy Act (RA10173)

Risks of Non-Compliance with the Data Privacy Act RA 10173

In today’s digital age, Having Information and Data is Power, but with great power comes great responsibility. Organizations that collect, process, and store personal information must comply with Republic Act No. 10173, also known as the Data Privacy Act of 2012 (DPA). This landmark legislation protects the privacy rights of individuals and sets the standards for responsible data management in the Philippines.

But what happens when organizations fail to comply? Below, we will explore the risks of non-compliance with the Data Privacy Act, and why prioritizing data privacy is not just good ethics, it's a smart business practice.

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1. Legal Sanctions and Penalties

Non-compliance with the RA10173 can lead to hefty fines and criminal charges. The law imposes penalties ranging from ₱500,000 to ₱5,000,000 and imprisonment of up to six years, depending on the nature and gravity of the offense.

Common violations include:

• Unauthorized processing of personal data

• Negligent handling leading to data breaches

• Failure to implement reasonable and appropriate security measures

• Breach of confidentiality by personnel

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2. Regulatory Action and Investigation

The National Privacy Commission (NPC) is empowered to investigate and take action against violators. This may include:

• Issuance of compliance orders

• Cease-and-desist orders

• Temporary or permanent bans on data processing

• Public disclosure of the violation

Investigations can disrupt business operations and erode internal morale—especially when public trust is on the line.

 3. Financial Losses and Business Disruption

Data breaches or mishandling of personal information can lead to:

• Loss of clients or business partners

• Costly litigation or settlements

• Increased compliance costs (e.g., audits, remediation, retraining)

• Operational downtime due to security overhauls or investigations

In severe cases, small and medium enterprises (SMEs) may never recover from the financial hit.

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4. Reputational Damage

Privacy is personal. When individuals feel their data has been misused, the trust is broken—and rebuilding it is never easy. A single breach can permanently damage an organization’s reputation, resulting in:

• Negative media exposure

• Social media backlash

• Loss of customer loyalty

• Decline in brand value

Remember: people don’t forget how you treated their personal information.

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5. Loss of Competitive Advantage

Organizations that cannot ensure the safety and integrity of personal data are less likely to be trusted in industries that depend on high levels of compliances, such as finance, healthcare, education, and e-commerce.

In contrast, strong data privacy practices can be a competitive edge, signaling to clients, investors, and stakeholders that you take responsibility seriously.Mitigating the Risks: What You Can Do

To stay on the right side of the law—and your customers—here are key steps to take:

• Appoint a Data Protection Officer (DPO)

• Conduct regular Privacy Impact Assessments

• Implement robust data protection policies and security measures

• Train employees on privacy awareness and safe data handling

• Register your data processing systems with the National Privacy Commission

• Respond swiftly to data breach incidents and notify the NPC within 72 hours

Risk and Mitigation Table :

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Conclusion:

Non-compliance with the Data Privacy Act isn’t just a legal issue, it’s a business risk, a reputational risk, and a moral risk. In a world increasingly shaped by data, handling privacy reflects who you are as an organization.

Invest in compliance. Safeguard trust. Protect privacy, because privacy protects people.