Privacy Policy Fundamentals: Purpose, Key Components, Real World Examples, Evolving Legal Landscape

Privacy policies are everywhere. They serve many purposes and come in many different forms. A privacy policy is an external-facing legally binding document that protects consumers from predatory data collection practices. An effective policy also protects the company collecting the data by clearly defining how they collect, store, and use customer data, which can mitigate the potential for legal risks relating to mishandling of personal information or privacy violations.

There are state, federal, and international laws requiring organizations that collect personal information to have privacy policies in place. Generally, an effective policy should contain a description of the information the company collects and how it is collected, the company's reason for collecting the data, how the data will be used and protected, whether the data is shared with third parties, the consumer's rights and choices regarding the collection, use and sharing of their data, and the amount of time the data is retained and how it is deleted. Other information may be required depending on the company's industry, type of personal data collected, and the website's target audience.

The most common and preferred privacy policy form is a clickwrap agreement. With a clickwrap privacy policy users actively acknowledge and agree to an organization's data collection and usage practices. Because the user's consent is recorded, a clickwrap agreement is considered more enforceable and legally compliant than the more passive browsewrap agreement.

Listen as our authoritative panel breaks down the key components of a privacy policy and provides guidance for drafting and reviewing these agreements.