Complex Made Simple

Egyptian enterprises do not strictly apply customer data protection policies

The survey revealed that only 19% of the businesses are fully acquainted with privacy laws

Most internet users are not aware of how much data trackers are gathering 36% are not completely comfortable with the way their customer data is being used by third-party vendors Companies assume data collection tools would inherently abide by strict legal laws and standards

According to a recently-released survey, 98% of businesses in Egypt use third-party trackers and ad platforms. However, only 70% of respondents have well-defined and documented policies for customer data privacy and a mere 10% strictly apply them, revealed the survey, which was conducted by Centurion Consulting on behalf of Zoho Corp., a global technology company. The announcement was made on the sidelines of Zoholics: Cairo, Zoho’s annual user conference.

“This rampant use of third-party trackers in the business space has severe ethical and privacy implications because of the enormous amounts of customer data being gathered through them,” said Hyther Nizam, President-MEA, Zoho Corp. “Most businesses use the same set of third-party trackers, which means the large corporates behind these trackers can combine data collected across different websites and build comprehensive individual profiles for hyper-targeted advertising. We call this practice adjunct surveillance. When the businesses that employ third-party trackers do not adhere to a strict privacy policy for customer data protection, they put their customers’ data at risk. Most internet users are not aware of how much data these trackers are gathering, and what is happening with their data.”

As per the survey, conducted with 246 companies spread across Egypt, while 36% of the respondents are not completely comfortable with the way their customer data is being used by third-party vendors, most businesses say they cannot stop using them because the ad campaigns are too important for the revenue (56%), the insights are critical to their ability to understand customers (26%), using these platforms is the most cost-effective way to do business (9%) or it is too difficult to remove the trackers (9%).

“There were 59.19 million internet users in Egypt as of January 2021, and the digital penetration is increasing at an incredible rate, propelled by the pandemic. The survey shows that most companies targeting the region’s massive online consumer base are not prioritizing user privacy because the use of third-party trackers and ad platforms helps their sales,” said Hyther Nizam. “However, consumers are growing more privacy-conscious by the day, and more countries are implementing stringent laws to protect consumer’s data and privacy. In the long-run, these businesses will need to rethink their reliance on third-party platforms in order to stay relevant, and gain the trust of their users.”

Usage of third party trackers

As per the survey, the main reasons for the use of third-party trackers are: tracking the effectiveness of an ad campaign (82%), sharing content on social media (62%), and gathering analytics on website visitors (43%). The businesses utilize the metrics to determine Customer Life Time Value. In fact, 67% of businesses say the third-party trackers and ad platforms are helpful in meeting their sales objective, while a further 26% say it is the primary factor in achieving their sales goals.

Another key finding from the survey is that companies assume data collection tools—most respondents use multiple vendors—would inherently abide by strict legal laws and standards and therefore customer data is safe. The survey showed that the bigger the name of the tracking company, the higher the respondents’ confidence that the information would not be misused. This is despite several large vendors being recently fined for violating privacy laws in other nations. 

Zoho had removed third-party trackers from its website in 2020 and has never sold customer data to anyone or shown ads, even in their free products. Zoho also owns its data centers and the entire technology stack of its solutions. It can, therefore, assure its users of the highest standards of privacy and security.

Awareness about laws

The survey revealed that just 19% of the respondents are fully acquainted with regional data protection laws. Interestingly, these are companies with over 100 employees. Respondents, who had their businesses online or were engaged in e-commerce activities that involved payment gateway integration were well aware of the data privacy policies because integration approval could not be gained without them.

The Egyptian government issued the Personal Data Protection Law (Law No. 151) in 2020 to regulate the processing, handling, and transfer of personal data by businesses in the region. The law is expected to be fully enforced by 2022.