Data Privacy as Competitive Advantage

In a negotiation over a software solution, someone told me: We take data privacy very seriously. But this statement didn’t come from the legal department, it came from sales, making it part of the pitch.

The argument that followed is standard everywhere by now: transparency creates trust and trust creates customer loyalty. But this logic is also the problem.

Because when ethics becomes a competitive advantage, it applies as long as it’s profitable. As soon as data privacy costs more than it brings in, it’s no longer a feature but an optimizable cost item. In that moment I asked myself whether the company would still communicate these ethical standards if nobody asked. I’ll give the answer up front: with software providers, ethics is part of the marketing.

Real ethics costs serious money, specifically development time. And whoever breaks the rules pays fines. But the grey zone is as vast as an ocean. There’s a simple rule: companies that are transparent win trust. This rule applies as long as transparency doesn’t get too expensive.

The GDPR brought something interesting to light. Companies that hadn’t cared about data privacy for years implemented comprehensive systems within months. Not because their values had changed. But because the penalties were high enough. Ethics followed economics, not the other way around.

Then companies recognized the value of data privacy and made it a differentiator. That sounds better than the truth really is: companies recognize that customers demand data privacy and adapt as long as it pays off.

I’m not saying it’s wrong to use data privacy as an advantage. But values that only apply when they’re profitable aren’t values. There are companies that act out of genuine conviction and there are few of them. They absorb the costs of ethics or turn down business that others would take. That they grow more slowly than those who look less carefully is something hardly anyone acknowledges. The ones in the spotlight are those who discovered ethics as a growth strategy. And growth strategy is a word nobody criticizes. But what happens to values when they only apply as long as they’re profitable? They don’t survive the first crisis.