Maryland’s Online Data Privacy Act: A Game-Changer for Data Minimization in the United States
Maryland has taken a game-changing step in data privacy protection with the enactment of the Maryland Online Data Privacy Act (MODPA), which is effective on October 1, 2025. Among the law’s numerous provisions, MODPA’s robust data minimization requirements represent a significant evolution in U.S. privacy legislation, potentially reshaping how organizations approach data collection and retention practices nationwide.
Understanding MODPA’s Unique Data Minimization Framework
MODPA’s Section 14-4606(B)(1)(I) establishes a particularly stringent data minimization requirement that exceeds the traditional privacy compliance measures found in other state privacy laws. Under this provision, covered organizations must limit personal data collection to what is reasonably necessary and proportionate to maintain or provide a product or service requested by the consumer. Crucially, this limitation extends to the processing of such information, creating a comprehensive framework that governs the entire data lifecycle.
This approach represents a noteworthy departure from many existing state privacy laws, which often focus primarily on consumer rights and opt-out mechanisms rather than imposing strict collection limitations at the source. MODPA’s data minimization requirements are more extensive than those of its counterparts in other states. The law takes an unprecedented approach to sensitive data by establishing two distinct requirements: first, it prohibits the collection, processing, or sharing of sensitive data unless such activities are strictly necessary to provide or maintain a specific product or service requested by the consumer; and second, it establishes a blanket prohibition on the sale of sensitive data without any exceptions, even when consumer consent is obtained.
The ‘strictly necessary’ standard that MODPA applies to sensitive data represents a fundamental shift in how organizations must approach data governance. Unlike other state privacy laws that rely on consent-based frameworks—where businesses can process sensitive data with proper consumer authorization—Maryland eliminates consent as a permissible basis for sensitive data processing entirely. This two-word phrase requires organizations to critically examine every touchpoint where sensitive data is collected, processed, or shared, asking whether each activity is genuinely indispensable for delivering the specific service the consumer has requested. This obligation threads through every aspect of a privacy program: from initial data collection forms and backend processing systems to vendor relationships and data retention policies. Organizations must be prepared to demonstrate not just that sensitive data processing is helpful or beneficial, but that it is necessary, a substantially higher bar that demands careful documentation and ongoing evaluation of data practices.
The International Context: Learning from GDPR’s Data Minimization Principle
The concept of data minimization is not new to the global privacy landscape. The European Union’s General Data Protection Regulation (GDPR) has long established data minimization as a fundamental principle, as outlined in Article 5(1)(c), which requires that personal data be “adequate, relevant and limited to what is necessary in relation to the purposes for which they are processed.”
Under the GDPR, organizations must identify the minimum amount of personal data necessary to fulfill their purpose and retain only that amount of information, without exceeding it. Controllers must periodically review their processing to ensure that the personal data they hold remains relevant and adequate for their purposes, and delete any data they no longer need.
MODPA’s approach to data minimization draws clear inspiration from these international standards while adapting them to the U.S. regulatory environment. This convergence signals a growing global consensus around the importance of limiting data collection to what is truly necessary for legitimate business purposes.
SOC 2 and Data Minimization: The Auditing Perspective
The principle of data minimization also finds support in established auditing frameworks, particularly within SOC 2 Type II audits and their Privacy and Confidentiality Trust Services Criteria (TSCs). While SOC 2 compliance doesn’t explicitly mandate specific data retention periods, the framework’s confidentiality and privacy criteria require organizations to demonstrate appropriate processes for identifying, classifying, retaining, and deleting confidential and personal information.
Under SOC 2’s Confidentiality and Privacy criteria, organizations must manage data responsibly throughout its lifecycle, including identifying and classifying sensitive data, establishing retention policies, and implementing secure disposal procedures. The framework emphasizes the importance of having documented policies and controls related to data retention and destruction.
This alignment between MODPA’s requirements and existing auditing standards suggests that organizations already following SOC 2 best practices may find themselves better positioned to comply with Maryland’s new data minimization mandates.
ISO 27001 and Data Minimization Best Practices
Similarly, ISO 27001 considerations have long recognized data minimization as a best practice within information security management systems. The standard’s approach to information lifecycle management emphasizes the importance of limiting data collection and retention to what is necessary for business operations, aligning with the principles now codified in MODPA.
Organizations implementing ISO 27001 frameworks often establish policies that naturally support data minimization objectives, including regular data audits, classification systems, and automated deletion procedures, all of which will prove valuable in achieving MODPA compliance.
Practical Implications for Information Governance
For information governance and recordkeeping practitioners, MODPA’s data minimization requirements present both challenges and opportunities. The law’s prescriptive approach to limiting data collection represents a significant shift from previous U.S. privacy legislation, which has generally been less directive about proactive data limitation strategies.
Organizations subject to MODPA will need to:
Implement Collection Limitations: Perform data mapping on data processing activities and review, and potentially redesign data collection processes to ensure they capture only the minimum information necessary for specified purposes.
Establish Processing Boundaries: Create clear guidelines for how collected data may be processed, ensuring all processing activities align with the “reasonably necessary and proportionate” standard.
Develop Retention Frameworks: Implement systematic approaches to data retention and deletion that support ongoing compliance with minimization principles.
Regular Compliance Reviews: Establish periodic assessments to ensure data holdings remain aligned with minimization requirements as business needs evolve.
Turning Compliance into Competitive Advantage
While data minimization requirements represent additional compliance obligations, forward-thinking organizations are recognizing them as opportunities for operational improvement. Many companies are using MODPA’s implementation timeline as a catalyst for comprehensive data governance initiatives that “clean house” by actively remediating or deleting unnecessary data.
This proactive approach offers several advantages:
Reduced Risk Exposure: Limiting data holdings naturally reduces the potential impact of data breaches and security incidents.
Cost Optimization: Storing and processing less data can lead to reduced infrastructure and operational costs.
Enhanced Trust: Demonstrating commitment to data minimization can strengthen customer relationships and brand reputation.
Simplified Compliance: Maintaining minimal, well-organized data sets makes it easier to respond to consumer privacy requests and regulatory inquiries.
Preparing for MODPA
Organizations that fall within MODPA’s scope should begin preparing now, even though enforcement of the law for personal data processing activities will not take effect until April 1, 2026. The implementation timeline provides an opportunity to develop comprehensive data minimization strategies that align with both MODPA’s requirements and broader privacy compliance objectives.
Key preparation steps include:
- Conducting Data Audits: Inventory current data collection and processing practices to identify areas requiring modification.
- Reviewing Collection Processes: Assess all data collection points, from website forms to mobile applications, to ensure alignment with minimization principles.
- Updating Privacy Policies: Revise privacy policies and notices to reflect new data minimization commitments and practices.
- Training Staff: Educate employees about data minimization principles and their role in maintaining compliance.
- Implementing Technical Controls: Deploy systems and processes that support automated data minimization and retention management.
The Broader Trend Toward Data Minimization
MODPA’s emphasis on data minimization reflects a broader trend in privacy regulation, both domestically and internationally. As state privacy laws continue to evolve across the United States, data minimization principles are likely to become increasingly common features of the regulatory landscape.
Organizations that proactively embrace data minimization strategies will find themselves better positioned not only for MODPA compliance but for the evolving privacy regulatory environment more broadly. By treating data minimization as a fundamental business practice rather than merely a compliance requirement, companies can build sustainable privacy programs that create value while protecting individual rights.
Conclusion
Maryland’s Online Data Privacy Act represents a significant milestone in U.S. privacy regulation, particularly through its robust data minimization requirements. By establishing clear limitations on data collection and processing, MODPA provides a framework that aligns with international best practices while addressing the unique needs of the American regulatory environment.
For organizations subject to the law, the path forward involves more than simple compliance; it requires a fundamental reimagining of data practices that prioritizes necessity, proportionality, and respect for individual privacy. Those who embrace this challenge will find that effective data minimization not only meets regulatory requirements but also creates operational efficiencies and competitive advantages in an increasingly privacy-conscious marketplace.
As we approach MODPA’s October 2025 effective date, now is the time for organizations to begin developing comprehensive data minimization strategies that will serve them well not only in Maryland but across the evolving landscape of U.S. privacy and cybersecurity regulation.
