Why Your Website Needs a Privacy Policy. It’s the Law.
Privacy is a hot topic. You have probably seen the commercials. Sleek shots of people using a company’s phones, computers or products throughout a city while a narrator goes on and on about how that company values privacy. When you put this in contrast to the ads you see in your online feed marketing a product you were just discussing with a friend earlier that day, you begin to wonder whether the word “privacy” really has the same definition you once thought.
Online habits are driving this evolution in privacy. For example, in 2018, the average adult user spent 6.3 hours per day with digital media. This includes mobile, desktop/laptop, and other streaming devices and gaming consoles. That’s an enormous amount of time online, and the information on user habits can provide insight into how potential customers are interacting with a business. However, collecting information on users carries serious legal complications. To address these complications, it is best practice for a company to create and maintain a privacy policy which contains universally recognized privacy principles.
The Question: What is a Privacy Policy?
A privacy policy is a user-facing document that discusses a company’s established practices for collecting, using and sharing user data. Every company that operates a website, accepts credit card payments online, offers a mobile application, issues an email newsletter, or uses social media is generally collecting some form of user data. You can usually find a company’s privacy policy at the foot of its website.
The Question: Why do I need a Privacy Policy?
First, the importance of having a privacy policy has grown in recent years due to customer expectations. There’s a reason major companies are putting substantial portions of their marketing budget towards advertisements which promote their reputation for handling consumer’s sensitive information. The way in which a company handles an individual’s private information impacts that individual’s decision whether to do business with that company. Second, recently enacted state laws, such as the California Consumer Privacy Act (2018), have a broad reach and are applicable to most companies that conduct business online or engage in other online activities. Failure to comply with these state laws can subject a business to increased scrutiny and substantial fines.
The Question: What should my Privacy Policy include?
Most importantly, a privacy policy should be tailored to a specific company. It is important to retain an attorney who will review your business practices and then craft a privacy policy which addresses the specific consumer data your company collects and subsequently uses. The Federal Trade Commission (FTC) takes the position that the use of personal information in a way that deviates from what is described in a company’s privacy policy is a deceptive trade practice under the Federal Trade Commission Act (FTCA). 15 U.S.C. § 45. In support of that position, the FTC regularly brings enforcement actions against companies that misrepresent their privacy practices, which makes it all the more important to follow the advice of your legal counsel when it comes to drafting and implementing a privacy policy.
The Question: What is the difference between a Privacy Policy and Terms of Use?
While both a Privacy Policy and Terms of Use are documents that allow a company to limit its liability from its online presence, they are distinct things. On the one hand, a privacy policy notifies users how a company is collecting, using and sharing user data, and it is required for compliance with federal and state laws. On the other hand, a Terms of Use (also known as Terms of Service) is a legally binding agreement which stipulates the rules on how a website may and may not be used. A Terms of Use is not expressly required in order to operate a website, but it is highly advisable to include one.
Contact us today so we can discuss your data privacy needs! For more information on the internet & technology services provided by Hendley & Goodwyn, LLP, visit our Services page.
*The material and information in this blog is for general informational purposes only. In no way is this information to be construed as legal advice for a particular situation.*