Data privacy: the new strategic challenge for boards and CEOs
For Chilean startups and tech companies, handling personal data responsibly is no longer the legal team's problem. It's a leadership decision that shapes competitiveness, reputation and access to markets.
This is a turning point. Chilean startups and tech companies face a paradox that will shape whether they stay viable: the more data they collect to grow and personalize their products, the more exposed they are to the distrust of users who are increasingly aware of their right to privacy. Working through that dilemma is neither optional nor cosmetic. It is, in the strictest sense, a strategic decision.
Digital transformation promised efficiency, scale and new business models, and it delivered much of that. But it also exposed a structural debt: most organizations adopted technology without building, alongside it, an internal culture capable of responsibly managing the information that technology generates. The result is a widening gap between what companies do with data and what citizens expect them to do with it.
In Chile, that gap is about to become legally expensive. The modernization of Law No. 19.628 raises the bar on informed consent, data subject rights and organizational obligations. The creation of an Agencia de Protección de Datos Personales with the power to impose sanctions changes the game: compliance is no longer only a matter of ethical conviction, it's also about avoiding legal and reputational consequences that can be devastating for a growth-stage company.
"Privacy cannot be an afterthought. It has to be built in from the start."
Sundar Pichai, CEO of Google, before the U.S. Congress, 2018
That line isn't rhetoric. It's an accurate description of what happens when privacy is dealt with too late. The most cited example is still Facebook and Cambridge Analytica: the improper exposure of 87 million users' data led to fines of more than 5 billion dollars, a historic drop in the stock price and, above all, reputational damage that still hasn't fully healed. In tech, trust is hard to build and fragile to hold on to. Losing it can be fatal.
But treating this challenge as nothing more than a regulatory compliance problem would be a serious misdiagnosis, especially for anyone leading an early-stage startup or tech company. Organizations that see privacy as a purely legal matter only ever react. Those that see it as a competitive advantage move first. Apple, for example, has made privacy a central argument in its value proposition, with global campaigns positioning its devices as the safest choice for users. That isn't corporate philanthropy. It's strategic differentiation in a market where trust is scarce.
This is where the CEO and the board become decisive, and where many Chilean tech organizations still fall short. A culture of privacy isn't installed with a policy page on the website or a clause in the terms of use. It's built from the top. When leadership doesn't set the example, when privacy doesn't come up on the board's agenda as often as growth KPIs or financial results, the implicit message teams receive is clear: this isn't a priority. And that signal spreads through the whole organization.
Tech company boards need to start asking the hard questions: What data do we actually collect, and why? Do we have genuine consent, or just a hurried click on a pop-up? Is there a data protection lead with real authority inside the organization? What would happen to our company if there were a leak tomorrow? The 2024 Edelman Trust Barometer found that only 53% of consumers worldwide trust tech companies to protect their data properly. In that context, leaders who take privacy seriously aren't being conservative. They're being smart.
Building a culture of change around personal data takes far more than training the legal team or installing consent management software. It requires founders and CEOs to weave privacy into the product story from day one. It requires engineering, design and marketing teams to bring ethical judgment into the conversation as each feature is conceived, not at the end of the process. It requires the question "can we do this technically?" to always come with "should we do it?". This principle, known in the industry as Privacy by Design, is not a constraint on innovation. It's what makes innovation sustainable.
Chilean startups and tech companies that lead this change will gain concrete advantages: an easier path to international investment, where European and North American venture funds assess regulatory compliance as part of due diligence; a better position to enter regulated markets such as the European Union; and a stronger value proposition for consumers who, faced with two equivalent options, will always pick the one they trust more. Data privacy isn't a brake on digital innovation. It's the invisible architecture underneath it. And like any architecture, it's built best when the people with the mandate to lead are on site from day one.
