What is a Privacy Policy?
A Privacy Policy is a statement or a legal document that states how a company or website collects, handles and processes data of its customers and visitors. It explicitly describes whether that information is kept confidential, or is shared with or sold to third parties.
Personal information about an individual may include the following:
- Name
- Address
- Phone number
- Age
- Sex
- Marital status
- Race
- Nationality
- Religious beliefs
For example, an excerpt from Pinterest's Privacy Policy agreement clearly describes the information Pinterest collects from its users as well as from any other source that users enable Pinterest to gather information from. The information that the user voluntarily gives includes names, photos, pins, likes, email address, and/or phone number etc., all of which is regarded as personal information.
Additionally, Pinterest also states that it collects user location data from mobile devices, and if someone makes a purchase on Pinterest, payment and contact information - including an address and phone number - will be collected. If users buy products or services for others, Pinterest gathers their contact information and shipping details, too.
Users may also give Pinterest permission to access information that is shared with other websites like Facebook and Twitter by linking their Pinterest account with them. This information would also include information about their friends and followers. The account settings have information about how much access Pinterest has to their users' data.
In sum, a Privacy Policy is where you let your users know all about how you make sure their privacy is respected by your business practices.
Why you Need a Privacy Policy
Privacy is not a new concept. Humans have always desired privacy in their social as well as private lives. But the idea of privacy as a human right is a relatively modern phenomenon.
Around the world, laws and regulations have been developed for the protection of data related to government, education, health, children, consumers, financial institutions, etc.
This data is critical to the person it belongs to. From credit card numbers and social security numbers to email addresses and phone numbers, our sensitive, personally identifiable information is important. This sort of information in unreliable hands can potentially have far-reaching consequences.
Companies or websites that handle customer information are required to publish their Privacy Policies on their business websites. If you own a website, web app, mobile app or desktop app that collects or processes user data, you most certainly will have to post a Privacy Policy on your website (or give in-app access to the full Privacy Policy agreement).
There are several reasons for a website to post its Privacy Policy agreement on its website.
Here are some of the main reasons:
- Required by the law
- Required by third party services
- Increases Transparency
Let's take a look at each of these reasons in more depth.
A Privacy Policy is Required by the Law
For individuals to feel comfortable sharing their personal information on the internet, there should be some sort of legal responsibility on businesses to protect that data and keep the users informed about the status and health of their information.
Countries around the world have realized the need to protect their citizens' data and privacy. Businesses and websites that collect and/or process customer information are required to publish and abide by a Privacy Policy agreement.
A majority of countries have already enacted laws to protect their users' data security and privacy. These laws require businesses to obtain explicit consent from users whose data they will store or process.
A few of these laws include the following:
For a business or a website that collects and processes user information in a certain region or country, it is very important to have complete knowledge of the data and privacy protection laws enforced in that region and the region your customers and end users are in. Non-compliance with these laws can result in hefty fines or even prosecution against the violator.
In some cases, businesses have to follow laws specific to states or regulations specific to industries.
For example, here's how General Motors complies with CalOPPA in the US by including a California-specific section in its Privacy Policy:
