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The Role of Google Analytics 4 in Data Privacy and Compliance: What You Need to Know

Data AnalyticsData SciencePrivacy

As global data regulations tighten and consumer awareness of data rights grows, companies must be proactive toward privacy or face stiff penalties and reputation damage. Google Analytics 4 can help automate data privacy and compliance to reduce manual intervention and costly errors.

This article walks you through GA4’s data privacy and compliance features and how to use them to stay on the right side of global privacy laws.

Why Data Privacy and Compliance Matters Now More Than Ever

Here are three fundamental business reasons why you must prioritise data privacy and compliance.

Regulatory environment (GDPR, CCPA, etc.)

Data privacy laws are tightening globally. In Europe, GDPR enforces stiff penalties for data breaches—up to 4% of a company’s global turnover. In the US, CCPA gives Californians the right to know how companies use their data.

As more US States and countries implement similar regulations and penalties, following the rules and implementing the correct practices is crucial.

Consumer expectations

Consumers are more aware of their value to organisations and want better control over their data and privacy. An April 2020 McKinsey study found that “71% agree they would stop doing business with a company if it gave away sensitive data without permission.” 

Platforms like GA4 offer granular data control features, meeting this demand and keeping users engaged.

Business reputation

A data breach can sink your reputation overnight. According to IBM, the average data breach cost in 2023 was $4.45 million—a 15% increase over three years. 

However, the monetary loss pales compared to the long-term damage to brand trust. Utilising GA4’s advanced data privacy features is a proactive step in safeguarding user data and your brand’s reputation.

Understanding the critical importance of data privacy for businesses, tools and platforms have evolved to address these concerns. One such platform is Google Analytics 4.

What is Google Analytics 4 (GA4)?

Google Analytics 4 (GA4) is the latest version of Google Analytics, released in early 2022. Google Analytics users had until July 2023 to switch to GA4, after which Google stopped tracking on UA. 

Google designed GA4 to be more privacy-focused and future-proof, with powerful features to automate data regulatory requirements. It uses a different data model than Universal Analytics (UA) and collects information, making it more difficult to identify individual users while facilitating cross-platform tracking.

How GA4 tracking works

The purpose of GA4 is to help businesses understand their users better and make better decisions about their marketing campaigns while adhering to data privacy and regulations. GA4 also offers cross-platform tracking to meet the demands of modern digital products, which users can access on multiple devices and platforms. 

For example, you can watch Netflix on your TV, laptop, desktop, tablet, and mobile phone. The streaming service also has multiple native applications. Universal Analytics did not have the capability to track users across all these platforms.

GA4 can track users across devices and sessions and collect more user interactions than UA. This cross-platform data collection and interaction tracking gives businesses more insights into how their users engage with each touchpoint as they move from website to web application, native apps, etc.

Additionally, by uploading CSV files to the platform, GA4 offers offline tracking through its Measurement Protocol feature for POS, loyalty cards, and other offline sources. Combining online and offline data on one platform gives organisations unique insights to understand customers and behaviour.

While GA4’s capabilities are impressive, it’s essential to contrast them with its predecessor, Universal Analytics, to appreciate these new features.

Understanding the key differences between GA4 & Universal Analytics

  • GA4 uses a model-based approach to tracking user behaviour rather than the session-based approach used by Universal Analytics. This model-based tracking means that GA4 can track users across devices and sessions, even if they don’t have cookies enabled.

  • GA4 collects more event data than Universal Analytics to track a wider range of user interactions, such as clicks, scrolls, and downloads.

  • GA4’s data retention period is 14 months, while Universal Analytics data provided up to 26 months.

  • GA4 offers more privacy controls than Universal Analytics. Businesses can control how data is collected and processed in GA4, and they can delete users’ personal data at any time.

Given these distinctions between GA4 and Universal Analytics, let’s dive into GA4’s data-gathering mechanisms.

How Does GA4 Collect Data?

GA4 collects data using a variety of methods, including:

  • First-party cookies: GA4 uses first-party cookies to track users across devices and sessions. The website or app users visit creates first-party cookies for tracking. Other websites or apps cannot access or read these cookies, protecting user privacy and aligning with stricter global privacy regulations.

  • Event data: GA4 collects event data, which is information about specific user interactions with your website or app. This data can include things like clicks, scrolls, and downloads.

  • Device information: GA4 collects device information, such as the user’s device type, operating system, and IP address, allowing you to track users across devices and locations.

  • Location data: GA4 can collect location data, such as the user’s city and country, to understand users’ locations and target them with relevant advertising.

GA4 also uses machine learning, or predictive metrics, to anonymise data and protect user privacy. For example, GA4 can use machine learning to remove the last few digits of a user’s IP address, protecting their exact location or identity.

With its comprehensive data collection methods, GA4 also prioritises user privacy. Let’s examine some of these robust privacy features.

Understanding GA4’s Privacy Features

GA4 offers several privacy features designed to help businesses collect and use data in a way that respects user privacy. 

Default IP anonymisation

By default, GA4 automatically anonymises IP addresses so Google cannot identify individual users. Default IP anonymisation is a significant privacy improvement over Universal Analytics, which did not anonymise IP addresses by default.

For example, a business uses GA4 to track the number of visitors to its website. With default IP anonymisation enabled, Google cannot see the visitors’ IP addresses or profile individual users, even if they have visited your website multiple times.

Shorter data retention periods

Data leaks and breaches are a severe issue with regular events globally. GA4 retains “user-level data” for up to 14 months, compared to Universal Analytics’ 26 months, so businesses have less data to store and manage, minimising user exposure to leaks or breaches.

Server location

Server location is critical to data compliance, particularly for businesses operating in regions with stringent data privacy laws like the European Union (EU). GA4 allows you to select whether you want data stored in the United States or Europe.

For example, if you operate an e-commerce site based in Germany, you fall under the General Data Protection Regulation (GDPR). You can store your data on GA4 servers in the EU to ensure compliance with these local laws.

Collecting consent

Businesses must collect consent from users before tracking them with GA4 through a cookie banner or other methods. If you fail to follow this protocol, you risk legal repercussions under laws like GDPR.

Deletion of users’ personal data

GA4 allows for manually deleting individual user data, which is crucial for adhering to privacy regulations like the GDPR’s “Right to Be Forgotten.”

For example, imagine you operate a subscription-based news site. A subscriber decides to cancel and, per GDPR, requests the removal of their personal data. GA4 provides a specific feature under settings to “Delete user data,” ensuring you meet regulatory requirements.

Rules regarding personal data

GA4 has several rules built-in to the platform for collecting and processing personal data. Google designed these rules to give businesses the control to comply with data privacy regulations.

Now that you have an overview of these GA4 features and what they do let’s look at how you must implement them to maintain compliance. It’s critical to implement these features correctly, and that’s where GA4’s Consent Mode is handy.

How to Use Consent Mode in GA4

Consent mode is a feature in GA4 that allows businesses to adjust how Google tags behave based on user consent status. This consent helps companies to comply with data privacy regulations like GDPR.

Businesses can specify why they collect user data when consent mode is enabled. When users consent, Google’s tags will adapt based on the user’s preferences.

Enabling consent mode instructions are available for the Global site tag (gtag.js) and Google Tag Manager. Server-side Google tags will respect the consent state captured by the client-side tag without additional configuration.

An example of how businesses can use consent mode to comply with data privacy regulations

Let’s say a business in the EU wants to use GA4 to track the behaviour of users on its website. The company must obtain user consent before tracking them by displaying a cookie banner on the website asking users to consent to tracking.

Once the business has obtained user consent, it can enable consent mode in GA4 and specify the purposes for collecting user data. For example, the company may want to collect data for analytics, advertising, and personalisation.

When users consent, Google’s tags will adapt based on the specified purposes, meaning the business can only collect data for the purposes that users have agreed to.

By using consent mode in GA4, businesses can automate compliance and ensure they collect user data in a way that complies with data privacy regulations.

Tips for using consent mode effectively in GA4:

  • Make sure that your consent banner is clear and concise. It should explain what data you are collecting and for what purposes.

  • Give users the option to opt out of tracking.

  • Respect user consent choices. If a user withdraws their consent, you must stop tracking them immediately.

  • Review your consent mode settings regularly to ensure they meet your needs, and you comply with data privacy regulations.

How to Use Server-Side Tagging

Server-side tagging is a way to manage and deploy Google tags on a server to improve data privacy and compliance. Server-side tagging supports Basic and Advanced consent mode implementations to comply with a wide range of data privacy regulations.

Server-side tagging also allows businesses to adjust Google measurement functions based on consent for ad or analytics storage to control collection and usage methods.

An example of how businesses can use server-side tagging to improve data privacy and compliance

Following the example above, let’s say our EU company wants to collect data specifically for advertising. With the appropriate consent, they can use server-side tagging to adjust the behaviour of Google measurement functions for ad storage.

Tips for using server-side tagging:

  • Make sure that you correctly configure your server-side tagging implementation.

  • Test your server-side tagging implementation regularly to ensure it is working as expected.

  • Keep your server-side tagging code up to date.

  • Audit your server-side tagging implementation regularly to ensure that it meets your needs and that you comply with data privacy regulations—these have a habit of changing regularly.

How to use GA4’s IP Address Settings

Google Analytics 4 infers location data from the IP address it discards afterwards. However, businesses can redact the IP address using the GA4 server tag in server-side Google Tag Manager (GTM), preventing GA4 from ever reading the full IP address.

When you redact IP addresses server-side before GA4, reports won’t automatically supply location data, helping your business comply with data privacy regulations.

Tips for using GA4’s IP address settings:

  • Only collect and store the IP address if you need it for a legitimate purpose, such as analytics or fraud detection.

  • Redact the IP address if you do not need to store it.

  • Use robust security measures to protect stored IP addresses.

  • Review your IP address settings regularly to ensure they meet your needs while complying with data privacy regulations.

How to Use GA4’s Cookie Parameters Settings

GA4 allows businesses to customise the default behaviour of Google Analytics cookies for data privacy and compliance.

Some of the cookie parameters that businesses can customise include:

  • Prefix name: Businesses can specify a prefix name for Google Analytics cookies to prevent cookies from being overwritten by other cookies on the user’s device.

  • Restrict the cookie to a specific subdomain: Businesses can restrict the Google Analytics cookie to a specific subdomain to protect user privacy.

  • Set an expiration date: Businesses can set an expiration date for the Google Analytics cookie so they don’t store tracking code on the user’s device for longer than necessary.

How to Use GA4’s Data Storage Settings

GA4 allows businesses to set the time before event-level data is automatically deleted from Analytics servers using Data Retention controls

The platform’s settings offer several data retention periods, including 14 months (maximum for GDPR), 26 months, 38 months, and 50 months. Businesses can choose the data retention period that best meets their needs and complies with applicable data privacy regulations.

Tips for using GA4’s data storage settings correctly:

  • Make sure that you have a process for deleting user data upon request.

Consider using a data anonymisation tool to anonymise user data before storing it.

How to Use GA4’s Data Portability Settings

Here are two methods for exporting data from GA4 while complying with data privacy regulations.

Pull event information via User Explorer

User Explorer is a tool in GA4 that allows businesses to view detailed information about individual users to pull event information for any user identifier, such as a user’s email address or device ID. This feature helps businesses locate data outside of GA4 to delete it upon request.

Integrate with BigQuery to export user event data

BigQuery is a cloud data warehouse that stores and analyses large data sets. Businesses can integrate GA4 with BigQuery to export all event data associated with users.

This feature can be helpful for businesses that must comply with data privacy regulations requiring them to give individuals access to their data. BigQuery also offers advanced analytics or machine learning.

Streamline Data Privacy and Compliance With Metric Labs

Even though Google Analytics offers a user-friendly dashboard to manage compliance, setting things up correctly can be complex and confusing. Our data analytics team has helped many companies migrate to GA4 while preserving data integrity.

Don’t get caught on the wrong side of data compliance. Trust our Metric Labs experts to deliver a solution that meets regulatory requirements while maximising insights from valuable first-party data and Google Analytics 4.

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