Secrets to a Successful Privacy Policy

Privacy policies may seem like a snooze, but they can actually be a key tool in protecting your business and communicating with customers.  A privacy policy explains your entity’s views and procedures regarding privacy and provides information about how you will use a website user’s personal information and/or data.  It also details the steps you take to maintain user information securely.

Privacy policies must:

  • Be specifically tailored to your industry, business, and circumstances
  • Have clear and accessible explanations understandable to the average consumer
  • Provide enough information that users have informed consent
  • Be strictly adhered to once published
  • Be updated to reflect any changes

A recent case underlines the importance of a well-crafted privacy policy.  In Carlsen v. GameStop, Inc., the plaintiff brought a lawsuit against GameStop regarding the video game retailer’s information sharing practices.[1]  The appeals court dismissed the plaintiff’s claims and proposed class action because of GameStop’s privacy policy.

The plaintiff subscribed to GameStop’s monthly publication Game Informer magazine, including both print and online versions.  GameStop provides a feature that allows subscribers to log in to the magazine content through their personal Facebook accounts.  The plaintiff filed suit because once he logged in to the magazine through Facebook, his Personal Facebook ID and Game Informer browsing history were transmitted to Facebook.

In order to access the online content of Game Informer, a subscriber must agree to the site’s terms and conditions, which includes GameStop’s privacy policy.  GameStop’s policy stated that “Game Informer does not share personal information with anyone.”

The court held that the transmission of Game Informer subscribers’ Facebook IDs and browsing history did not constitute “personal information” under GameStop’s privacy policy because these items were not included in the explicit list in the privacy policy detailing “personal information” and because the information at issue was not specifically solicited by Game Informer or voluntarily submitted in response to such a solicitation, as specified in the privacy policy.  Because the Facebook IDs and browsing history were not included in the privacy policy as protected personal information, GameStop did not act wrongly in sharing that information, and thus there was no breach of contract.  GamerStop’s clear and well-written policy was key in extricating GameStop from this lawsuit.

Privacy policies have become a common business practice for many websites.  These days, website users are keenly aware of privacy concerns and protective of their personal information.  The prevailing view is that a credible website will operate with at least minimal privacy standards in place.  Privacy policies are especially necessary when you are engaged in e-commerce or data collection.  If your prospective and current clients are likely to have concerns about privacy, then they will expect you to have a policy that details the various protections and procedures that you have in place.

Every website will have different elements to cover, and some websites will need more comprehensive policies than others. This is likely dependent on what kind of user information is collected and how much/to what extent it will be shared with third parties.

Regulated industries, like banking, medical, and others, are required by law to maintain a privacy policy that applies both on and off the internet.  Entities in these industries should address all issues covered under industry regulations in an online privacy policy as well.

We advise against copying a policy from another business, even if that business is similar to yours.  A poorly written or inapplicable policy taken from another website can expose you to liability.  You want to make sure that your privacy policy specifically covers the individual needs of your business.

Often websites will have full terms and conditions with a separate privacy policy integrated into the terms.  A privacy policy needs to be easy to understand even though it is a legal document.  Your policy should be also clearly and prominently displayed on your site and accessible from key pages like the homepage and shopping cart, if not every page.

You want to make sure that as your business or technology evolves (say you launch a related app or pair with a social media platform), your privacy policy is updated to address the same.  Anytime a change to your policy is made, you should provide clear notice to users and in some cases obtain consent from users for material changes.

Privacy policies typically include sections that address:

  • user information that is collected
  • method of collection
  • how that information is shared and/or stored

A policy should address not only the required personal information that a user enters into the website but also any data logged automatically by your website, application, servers, etc.  A privacy policy should also address any use of cookies.

Once you have a policy in place, it is essential that you abide it and make sure that your practices actually match the statements in your policy. Your policy creates a contract with your users. If your policy and practices do not align, you open yourself up to liability, both from lawsuits by users and actions by regulators like the FTC, who scrutinize unfair or deceptive trade practices.

If your website is directed toward children under the age of 13, additional requirements apply to your website under the Children’s Online Privacy Protection Act and should be detailed in your privacy policy.

As demonstrated by the GameStop case, a clear privacy policy drafted to meet your needs and circumstances can not only provide your users with a transparent explanation of your privacy practices, but also protect your entity from liability. — Rina Van Orden

[1] 833 F.3d 903 (8th Cir. 2016).