What is the Difference Between Privacy and Confidentiality?: Private and Confidential Information

Author: Ian Aldridge, Progressive Legal

What is the difference between private and confidential information?

There are two words that you will encounter regularly in business – “private” and “confidential.”   

In everyday language, they have similar meanings – they mean you shouldn’t share information that is labelled either private or confidential.  

Lots of people use them interchangeably.  However, did you know that privacy and confidentiality are two different concepts legally? Read on to learn about the difference and to make sure that your business is correctly using each term.

What is private information?

Private information is codified by law in Australia. The Privacy Act 1988 (“The Privacy Act”) is a national framework for privacy in Australia. Under the Act, personal information is private. Personal information is that which is:  

“about an identified individual, or an individual who is reasonably identifiable: 

1. whether the information is true or not; and
2. whether the information or opinion is recorded in a material form or not” 

The Commonwealth government has deliberately kept this definition broad so that it encompasses past, current, and future methods of gathering and maintaining records of information.   

Some examples of personal information include a person’s name, home address, email address, date of birth, medical information, and bank account details.   

Under the Act, private information is still classified as private information even if it enters the public domain. So, for instance, if your private information was made public because a company holding it had a privacy breach, your information is still “private.”  

There are numerous government bodies that are responsible for making sure that businesses are adhering to their privacy obligations. These are state and federal bodies charged with managing privacy and regulating how companies handle private information.  

They can investigate businesses and even fine them for misuse of private information. The Federal Government is currently proposing multiple reforms to the Privacy Act that would increase fines for businesses with repeated and/or severe data breaches of private information.

What is confidential information?

Confidential information is a concept under common law. It can include trade secrets (information that is valuable to your business). It can include information that people while they’re doing work for your business and can even be included in a non-disclosure agreement (“NDA)” or a deed of confidentiality before they start.   

Examples of confidential information may include customer names and information, proprietary information such as branding guidelines and databases, supplier names and information, and contract terms. 

Because confidential information is not codified in the Act, parties can define confidential information in the way that best suits them. Parties can consider if they want only specific materials to be considered confidential and outline those materials if this is what they choose. On the other hand, parties may prefer a broad consideration of confidentiality and be more vague with their descriptions. 

Something that is important to know about confidential information is that if it goes out into the public sphere, it is no longer considered confidential.   

One exception to this is when you share confidential information with a professional for the purposes of advice. If you share confidential business information with your lawyer or your accountant in order to receive professional advice about that information, they are bound by confidentiality as well. 

If someone breaches a confidentiality agreement, then that is a matter for the parties to handle between themselves. This may involve communicating to another person when they’ve broken their confidentiality obligations all the way through court proceedings for damages (which can be hard to assess) or an injunction to keep the breaching party from further misusing information. 

Can parties handle information that is private and confidential?

Yes.  For instance, a small café would have private information to identify its employees (including names, addresses, and dates of birth). It may also have confidential information, such as recipes, business plans, clientele, pricing and supplier information. 

Businesses will have constantly evolving confidential or private information. For example, a start-up that is looking to hire a developer to build a prototype of an app might have a Non-Disclosure Agreement (NDA) or a deed of confidentiality that it asks the developer to sign before the start up gives the developer the brief of work. Because it is a prototype, the business may not even have any private information at that point.  

Later, that same start-up may have private information of customers, such as their names and addresses, as well confidential information in highly developed business procedures. Privacy and confidentiality may even exist together.  

A business could have customers’ addresses in a database. The customer addresses would be both private information due to the Privacy Act and the database itself and the information in it (including the customers’ addresses) would be confidential information. 

Because of the nature of privacy and confidentiality, we recommend speaking to a lawyer to make sure that your contracts, agreements, and policies are carefully worded and thoroughly reviewed to reduce your business risk. 

If you need tailored advice on how to handle private information or confidential information, contact our lawyers on 1800 820 083 or fill out the contact form on this page.

Key takeaways

In the world of business, the distinction between private and confidential information forms the cornerstone of effective information management and legal compliance. Private information, as defined under the Privacy Act 1988, encompasses personal details that remain protected regardless of their public exposure. Confidential information, conversely, includes trade secrets and proprietary data, losing its shield once it enters the public domain. This nuanced understanding is pivotal for businesses to navigate legal obligations and safeguard their competitive edge.

Both privacy and confidentiality demand meticulous management strategies, tailored to their distinct legal standings. As businesses evolve, so does the nature of the information they handle, underscoring the necessity for expert legal advice. Ensuring your contracts, agreements, and policies are meticulously crafted and regularly reviewed can mitigate risks and fortify your business against potential breaches.

Need advice on handling your business’s private and confidential information, ensuring you remain ahead in compliance and security? Reach out to our experienced team via phone or by requesting our advice below.