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A Privacy Policy agreement is the agreement where you specify if you collect personal data, what kind of personal data you collect from users and what you do with that data.

This agreement is required by law if you collect personal data. Personal data is any kind of data or information that can be considered personal (identifies an individual):

Email address

First and last name

Billing and shipping address

Credit card information

And so on

What is a Privacy Policy

A Privacy Policy is a legal statement that specifies what the business owner does with the personal data collected from users, along with how the data is processed and why.

In 1968, Council of Europe did studies on the threat of the Internet expansion as they were concerned with the effects of technology on human rights. This lead to the development of policies that were to be developed to protect personal data.

This marks the start of what we know now as a “Privacy Policy”. While the name “Privacy Policy” refers to the legal agreement, the concept of privacy and protecting user data is closely related.

This agreement can also be known under these names:

Privacy Statement

Privacy Notice

Privacy Information

Privacy Page

The Privacy Policy can be used for both your website and mobile app if it’s adapted to include the platforms your business operates on.

The contents of a Privacy Policy may differ from one country to another, depending on the country legislation, but most privacy laws identify the following critical points that a business must comply with when dealing with personal data:

Notice. Data collectors (meaning, you or your company) must make clear what they are doing with the personal information from users before gathering it.

Choice. The companies collecting the data must respect the choices of users on what information to provide and how personal that provided information will be.

Access. Users should be able to view or contest the accuracy of personal data collected by the company.

Security. The companies are entirely responsible for the accuracy and security (keeping it properly away from unauthorized eyes and hands) of the collected personal information.

This means that a “Privacy Policy” serves as a way to inform users how their personal information will be used, along with how the information will be collected and who has access to it.

Who needs a Privacy Policy

Any entity (company or individual) that collects or uses personal information from users will need a Privacy Policy.

A Privacy Policy is required regardless of the type of platform your business operates on or what kind of industry you are in:

Web sites

E-commerce stores

Facebook Apps

The basics of a Privacy Policy

In the US, there are no overall laws. The U.S. privacy legislation may vary from one state to another. Certain federal laws that govern users’ data in some circumstances, such as in these examples:

The Gramm-Leach-Bliley Act. The obliges organizations to offer clear and accurate statements about their information collecting practices and it also limits usage and sharing of financial data

COPPA law. The act is especially for web sites that gather information about children under 13 – any site of this category is legally obliged to adhere to the restrictions implemented by the act.

Health Insurance Portability and Accountability Act. The act applies to online health services too.

California Online Privacy Protection Act.

SOPIPA law. This act applies if you collect personal data from students.

Content Eraser law. This law applies if you collect data from minors (under the age of 18).

In Canada, there’s the Personal Information Protection and Electronic Documents Act (PIPEDA) generated by federal privacy laws.

This law established acceptable standards to limit and organize personal data gathering, usage, and disclosure by commercial institutions. This means that organizations may gather, use and disclose that percent of information for purposes that a reasonable person would consider fit in the circumstance.

The Privacy Commissioner of Canada stands for receiving and peacefully taking care of complaints against organizations. Its purpose is to solve privacy matters through compliance, not through enforcement. It reaches complaints, spreads the importance of awareness of and conducts studies about privacy issues.

Before you draft this agreement for your business, consider the basic requirements for most online businesses that deal with personal data from users (this includes SaaS apps or Facebook apps as well).

That the privacy of your users is protected

That you take full responsibility to protect the privacy of your users

That you comply with active privacy laws.

Based on these above, the basic requirements of Privacy Policy agreements are:

What information you collect from users. “Information” means “personal information”: any kind of information that has the potential to identify a user.

What will you do with the collected personal information

With whom you share the collected personal information, i.e. with third-parties

Users need to know what kind personal data you collect from them. It’s best to tell users exactly what data you collect from them and why:

Contact information, such as email address

Name, profession and date of birth

Preferences and interests

And so on

Your agreement should mention why you collect this kind of data. Generally, the only purpose for collecting personal data from users is to use it and do what’s best for your company and users as well:

You may use the data gathered to help towards development of new services or improve your existing services

You may send users emails about special offers, new services or other information that may be interesting for them

You may use their data to get in touch with them in order to invite them to participate in market research

Nonetheless, their personal information may be used to personalize their sessions on your website in order to better fit their interests, such as offering them relevant, individually tailored content

If you already have the agreement for your website and you’re now launching a mobile app, you need to first consider what kind of new personal data you collect through the mobile app. Then update your agreement to include the new changes: what you collect from the website and from the mobile app.

How to enforce a Privacy Policy

There are two methods of implementation in regards to the enforceability of a legal agreement: browsewrap and clickwrap.

A browsewrap agreement is defined as simply a link found in the footer of the web site:

In a clickwrap implementation, the website is informing users of the legal agreements that users need to read and agree to right when users sign up for an account:

You can use both: browswrap and clickwrap.