How Scaling Tech Companies Can Control Privacy Risk in Connected Products

If you build connected products, you already know how intense the privacy landscape has become. Every new sensor, data pipeline, integration, or AI powered feature can introduce fresh risk. As companies scale, these little risks stack up fast. What used to be a simple product roadmap can quickly turn into a maze of data responsibilities, regulatory expectations, and customer trust concerns.

The good news is that controlling privacy risk is absolutely doable. The challenge is that it requires more than compliance checklists. It requires a mindset shift toward treating data as a product in its own right, with the same level of design attention as hardware or software.

Image Source: Google Gemini

The Privacy Pressure Cooker for Fast Growing Tech Companies

Across the industry, reports continue to highlight growing tensions. For example, research from Deloitte shows that users now factor in privacy clarity when making buying decisions for mobile and IoT products. This is a sign that privacy maturity is not just a legal box to tick. It is a growth enabler.

Why Privacy Risk Rises Faster Than Product Growth

As connected ecosystems expand, data tends to spread across services, vendors, and codebases in a way that big-picture decision-makers often cannot see. Privacy risk grows in areas like:

• Data flows that shift or expand faster than documentation.
• Third party integrations added without full vetting.
• Legacy telemetry that keeps collecting more than necessary.

This pattern is evident in technical research. A recent study from arXiv revealed that many third party SDKs widely used in connected products quietly transmit more data than their documentation suggests. The scale of this issue increases as companies grow and rely on faster development cycles or outsourced modules.

Along with reviewing how third-party SDKs handle data, it’s useful to have clear practices for collaborating with partners. For example, adopting a reciprocal link exchange can help promote transparency and strengthen accountability when working with other businesses or integrating new tools.

At the same time, regulatory frameworks are evolving. Coverage from The Verge points to upcoming adjustments in EU privacy laws that may simplify some aspects of compliance. Still, these changes also raise new expectations around AI transparency and automated decision making, both of which heavily affect connected product companies.

In other words, privacy is not getting easier. It is getting more dynamic.

A way to address this dynamism is to ground your internal processes in strong GDPR compliance practices. Even when your market expands beyond Europe, GDPR aligned processes tend to create cleaner, more predictable data environments that support scaling.

Building a Privacy Strategy that Actually Scales

Traditional privacy programs often break as companies grow because they are built around paperwork, not product reality. Scaling tech companies need something more operational. Below are the pillars that make a practical difference.

Map Data Flows Like They Are Product Features

Most breaches and violations happen because companies lose track of how data moves, requiring an IT strategy rethink. Data flow mapping should be a living artifact updated with every major roadmap decision. This is especially true for connected product environments where devices talk to services, which talk to clouds, which talk to analytics stacks.

Your engineering teams should treat this as part of technical design, not just a legal deliverable. This mindset shift makes data boundaries easier to visualize, which helps catch risky flows early.

Validate Third Party Code as Strictly as Hardware Components

The PwC Digital Trust Insights report, highlighted in this PwC summary, notes that connected product attacks and supply chain threats rank among the top cyber risks for 2025. Much of this risk flows through libraries, vendor integrations, and SDKs.

If your hardware team requires rigorous testing protocols, your software team should do the same for third party code. This includes:

• Reviewing what the SDK collects even when you do not use its full feature set.
• Requiring transparency into data handling.
• Creating a vendor review checklist that product managers can handle without slowing sprints.

This operationalizes privacy so it does not depend on a single overworked compliance lead.

Make Privacy UX a Product Differentiator

Users are reaching a tipping point. As the aforementioned Deloitte research shows, trust now directly influences purchasing behavior for connected devices. That means clear privacy controls and honest communication can lift adoption and retention.

The most effective privacy UX is written in human language and presented before problems arise. Customers feel safer when they understand what a device is doing, why it needs certain permissions, and how they can manage their own experience.

Bring Privacy and Security Together Early

Privacy and security are intertwined. Security without privacy still leaves users exposed to misuse. Privacy without security collapses under threat. Connected product companies should link these teams at the design stage, not after launch.

This becomes even more important as AI features integrate into products. Each model or automated decision introduces explainability and fairness considerations that fall under both privacy and security umbrellas.

The Path Forward for Scaling Tech Companies

The companies that succeed in the next decade of connected tech will be the ones that design privacy into their growth from day one. That means operational processes, realistic documentation habits, vendor controls, and privacy centric product thinking.

It also means staying aligned with emerging regulations, watching how AI oversight evolves, and using strong compliance frameworks as safety rails rather than burdens.

With connected products touching more parts of daily life, users expect clarity and fairness from the companies behind them. When you build trust into your product ecosystem, you reduce risk and strengthen your competitive edge simultaneously.