Many businesses invest in privacy programs, train their teams, and adopt compliance frameworks—yet still fail to account for one of the biggest threats to their data protection efforts: shadow data. This invisible, unmanaged data can quietly grow within your systems, creating risks for regulatory fines, customer trust, and data breach exposure. In this blog, we’ll break down what shadow data is, where it hides, and how your business can eliminate it before it becomes a liability.

What Is Shadow Data?

Shadow data refers to any personal, sensitive, or confidential data that exists outside your organization’s official data governance programs. It’s often untracked, unmanaged, and not included in formal privacy processes like your Record of Processing Activities (ROPA), Data Protection Impact Assessments (DPIAs), or retention schedules.

This type of data may be stored in:

• Unsecured spreadsheets on desktops or personal devices 
• Shared cloud drives like Google Drive or Dropbox 
• Email attachments or internal chat threads 
• Archived backups or old legacy systems 
• Temporary files created for testing or reporting 
• Unsanctioned tools used by employees (known as “shadow IT”) 

Although it’s unintentional, shadow data can easily include personally identifiable information (PII), which makes it a compliance and security risk.

Why Shadow Data Is a Big Problem for Businesses

Shadow data is dangerous because it exists outside of your control but still contains data you’re legally responsible for protecting.

Key risks include:

• Non-compliance with data privacy laws like the California Privacy Rights Act (CPRA) and the General Data Protection Regulation (GDPR) 
• Inaccurate or incomplete responses to Data Subject Access Requests (DSARs) 
• Increased vulnerability to data breaches and leaks 
• Audit failures due to missing or outdated Records of Processing Activities (ROPA) 
• Damage to customer trust and brand reputation 

A 2023 IBM Security report found that shadow data is one of the top contributors to cloud-related breaches—highlighting how common and costly unmanaged data can be.

Real-World Examples of Shadow Data

• A marketing team stores customer email lists in a shared folder without encryption or permission. 
• A sales rep saves client contracts on a personal laptop and forgets to delete them. 
• A decommissioned system is backed up but never deleted or monitored. 
• A development team copies real customer data into a test environment without proper safeguards. 

These situations are not uncommon—and each one carries legal and operational risks for your business.

What Privacy Laws Say About Hidden Data

Under the California Privacy Rights Act (CPRA), businesses must clearly understand and document how they collect, use, and store personal data. This includes enforcing data minimization and purpose limitation practices. 

The European Union’s General Data Protection Regulation (GDPR) also requires organizations to maintain a complete and up-to-date Record of Processing Activities (ROPA), even for data that might seem inactive or insignificant. 

If shadow data contains personal data, your business is still responsible for it—whether you know it exists or not.

How Curated Privacy LLC Can Help

At Curated Privacy LLC, we help businesses uncover and eliminate shadow data as part of a holistic privacy compliance strategy.

Our services include:

• Shadow data discovery and audit 
• Full data inventory and Record of Processing Activities (ROPA) creation 
• Workflow updates to prevent the accumulation of unmanaged data 
• Employee training to reduce risky habits around file storage 
• Data retention and deletion policy development 

We align your systems and processes with major privacy laws like the CPRA, GDPR, and upcoming U.S. state regulations, ensuring you’re audit-ready and compliant.

Final Thoughts: You Can’t Protect What You Can’t See

Shadow data is one of the most overlooked threats in modern privacy programs. It’s not visible in dashboards or spreadsheets—but it’s still there, creating risk. Businesses that take the time to find and address shadow data not only reduce legal exposure but also build stronger, more trustworthy operations.

Get a Free Consultation

Let’s identify and fix your shadow data risks—before regulators or breaches do.
Curated Privacy LLC offers free consultations to assess your current privacy program.

Visit: www.curatedprivacy.com
Email: info@curatedprivacy.com

Follow us on social media for real-world privacy tips and updates on evolving data protection laws.