Business 101: Do You Need a Privacy Policy?

How to determine if your website needs a privacy policy.
July 1, 2013

Chances are your website collects the names and email addresses of site visitors so you can contact them later, via newsletter or email blast offering sales, promotions and other information. If you sell products online, you’re collecting even more customer information. But consumers want to know what you’re doing with that information, which is why you need a privacy policy.

A privacy policy is a statement posted on your website that states how you collect, use, disclose and manage users’ personal information—anything that can be used to identify an individual, including first and last name, physical address, email address, date of birth, phone number, etc. According to the U.S. Federal Trade Commission’s Fair Information Practice Principles, there are five basic principles of privacy protection:

1) Notice/Awareness; 2) Choice/Consent; 3) Access/Participation; 4) Integrity/Security; and 5) Enforcement/Redress.

To address these principles, your privacy policy should identify:

- The entity collecting the data.

- How the data will be used.

- Who will receive the data.

- The nature of the data and how it was collected.

- Whether it’s required (vs. voluntary) for visitors to provide the data, and the consequences if they refuse.

- The steps you take to ensure the confidentiality, integrity and quality of the data.

Your privacy policy should let users opt-in or opt-out of receiving information and communications from you, and give choices as to what permissions they are allowing. If you’re not sure whether your privacy policy states everything correctly, make sure to run it by a lawyer.

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