Data Privacy as Competitive Advantage

In a negotiation, someone told me: We take data privacy very seriously. The sentence didn’t come from the legal department. It came from sales. It was part of the pitch. Data privacy wasn’t an obstacle to overcome. Data privacy was the feature.

The argument has become standard by now: Transparency creates trust. Trust creates customer loyalty. Customer loyalty creates revenue. Ethics becomes a business case.

The reasoning is logical. That’s the problem.

If ethics is a competitive advantage, it applies as long as it’s profitable. The day data privacy costs more than it brings in, it’s no longer a feature. It’s a cost center. And cost centers get optimized.

There’s a simple question I ask myself with arguments like these: Would this company still have these ethics if no customer asked for them? If the answer is no, it’s not ethics. It’s marketing.

Real ethics costs something. It costs when the competitor does it cheaper because they look less carefully. It costs when the board asks why margins are shrinking. It costs when a lucrative contract falls through because you said no. Ethics that never costs anything has never been tested.

But nobody describes this test. What gets described is always the winning side: companies that are transparent win trust. The other side is missing: What happens when transparency gets expensive?

In thirty years of consulting, I’ve learned that values are free in good times. Everyone has values when it costs nothing. The question is what happens when the numbers drop. When an investor asks why you’re not using the same data as the competition. When the algorithm would be better if you were a little less careful about consent.

That’s the moment that shows whether ethics is a value or a sales pitch. And experience shows: Most of the time it’s the latter. Not out of bad intentions. But because companies are organisms that respond to pressure. And the pressure comes from the numbers, not the values.

The GDPR showed something interesting. Companies that had shown no interest in 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.

The common narrative flips the story. It says: Companies recognize the value of data privacy and make it a differentiator. That sounds better than the truth: Companies recognize that customers demand data privacy, and they comply as long as it pays off.

I’m not saying it’s wrong to use data privacy as an advantage. I’m saying you should be honest about what that means. It means: As long as it’s worth it, we’re the good guys.

Values that only apply when they’re profitable aren’t values. They’re tactics. Good tactics. But tactics.

There are companies that act out of genuine conviction. Few of them. You recognize them by the fact that their ethics costs them something. That they turn down business others take. That they grow more slowly than those who look less carefully. The industry rarely talks about these companies. It talks about the ones that discovered ethics as a growth strategy.

What happens to values that only apply as long as they’re profitable? They don’t survive the first crisis. And then the next annual report features a new value.