Does Your Website Need a Privacy Policy?

Are you struggling to understand the new data regulations, or do your eyes cloud over when you hear about data privacy?

Read on to learn what a privacy policy is and why your website may need one.

What Is a Privacy Policy?

A privacy policy is a statement that explains how you handle all personal information collected on your website. This personal information typically comes from your customers and regular visitors to your site, and your privacy policy should be easily accessible to those site visitors.

At its most basic level, a privacy policy answers the following questions:

• What information are you collecting?
• What do you do with that information?
• With whom do you share the information?

As you can see, privacy policies provide essential information to people who visit your website. After all, with data breaches, security leaks, and other malicious activity seemingly happening every other day, consumers are more concerned about improving their data privacy.

Which Companies Need a Privacy Policy?

Websites that collect Personally Identifiable Information (PII) need a privacy policy. PII is any data you can use to determine a person's identity, whether directly or indirectly.

Some examples of PII include:

• Names.
• Email Addresses.
• Birthdays.
• Phone Numbers.
• Credit Card Numbers.
• IP Addresses.

Your company may collect some of this information from customers making purchases or visitors signing up for a newsletter. If so, you need a privacy policy to assure customers that you're not misusing their data.

Common Misconceptions

Some misconceptions about privacy policies could put you in trouble with the authorities or your customers, so let's clear them up.

Some believe you only need a privacy policy if you collectfinancial information. In truth, however, you need a privacy policy if you deal with all kinds of personal information, not just financial.

Furthermore, others think they don't need a privacy policy on a website that does not share its information with third parties. While transferring data to third parties is a disclosure made in your privacy policy, it is not the only disclosure regarding private information. Therefore, you would still need a privacy policy even if you do not share the data you collect.

A third misconception is that a privacy policy can be vague or that you don't have to follow all its terms because most customers won't read it. On the contrary, privacy policies are a legal requirement in most cases, and compliance failures have consequences. All it takes is for one customer to notice the difference between your data collection practices and your privacy policy for trouble to arise.

Why Does Your Website Need a Privacy Policy?

Now that you know what a privacy policy is and that your website probably needs one, you may ask yourself why it is required.

It's the Law

We live in an age where a lot of personal information finds its way online, and in the wrong hands, it can cause us harm. Consequently, governments worldwide have introduced regulations requiring a privacy policy for websites and services that collect user information.

Third-Party Apps Require It

Most third-party apps and service providers require their partners and clients to have a privacy policy to limit their exposure to regulatory action. That's because they operate in multiple legal and geographical jurisdictions and make an effort to anticipate and comply with the rules in these various areas.

Builds Trust

Customers are becoming more sensitive about their data privacy. One of the ways you can gain their trust is by assuring them that you will protect their data from misuse and malicious actors when they visit your site.

Informs Customers

Apart from knowing that their personal information is protected, some customers would also like to know what kind of information you are collecting from them. A privacy policy will inform them about this and how you store their data.

Security-First Stance

A privacy policy is one of the first parts of your website that customers and clients will interact with. It makes a great first impression that you take your security and theirs seriously.

Avoid Fines and Court

There are laws to protect customers' personal information from misuse. The best way to avoid breaking these rules and facing the consequences is to comply. The first step is clearly stating what information you collect and how you manage it in your privacy policy.

SEO, Branding, and Marketing Purposes

Including a page with a privacy policy can improve your website's trust rank, leading to a higher ranking with search engines like Google. Obviously, an improved ranking is a win for online businesses looking to attract more visitors.

Changing Technology

Our personal lives have found their way online as technology evolves. While the laws for safeguarding all this new information continue to adapt, the privacy policy will always serve as a way for consumers to understand how web services use their data.

The Laws Currently Affecting Privacy Policies

Multiple laws in various regions and sectors govern how websites use personal information.

European Union's General Data Protection Regulation (GDPR)

The first of these laws is the General Data Protection Regulation (GDPR), which protects the privacy of EU residents. GDPR requires websites to obtain informed consent before they collect personal information. Informed consent means providing certain disclosures found in a privacy policy.

California Online Privacy Protection Act (CalOPPA)

The California Online Privacy Protection Act (CalOPPA) is the first state law in the United States to require commercial websites and online services to post a privacy policy. It applies to any website that collects the personally identifiable information of California residents.

California Consumer Privacy Act (CCPA)

The third law is the California Consumer Privacy Act (CCPA). This law went into effect in 2020 and granted California residents more control over the personal information collected by businesses. They have the right to know what data you're collecting and how you're using it, and they can request that you delete their data.

Health Insurance Portability and Accountability Act (HIPAA)

The Health Insurance Portability and Accountability Act (HIPAA) of 1996 governs the use of personally identifiable information in the healthcare sector. It prevents sharing patient information with anyone other than a patient and their representatives. Beyond healthcare providers, businesses operating in that sector must also be HIPAA compliant.

Children's Online Privacy Protection Act (COPPA)

The Children's Online Privacy Protection Act (COPPA) applies to websites and online services that cater to children below the age of 13 and obtain personal information about their visitors. COPPA restricts the information these sites can collect and gives parents tools to control the data collected.

Gramm-Leach-Bliley Act (GLBA)

The Gramm–Leach–Bliley Act (GLBA) is a financial sector regulation that requires all companies offering financial products and services to disclose their information management practices to consumers. Compliance is mandatory for all financial institutions in the United States.

While most of these laws seem limited to specific regions or sectors, the fact that websites can have visitors from anywhere in the world means that your online business can also fall under the jurisdiction of these laws.

Creating a Privacy Policy

To ensure that your privacy policy meets the stipulations of the various laws that require it, here are the questions you must answer when creating one for your website:

1. What information do you collect from your website visitors? 

There are various types of private information, and your policy should identify which ones your website collects from visitors.

2. Why is this information collected?

The reason you collect the different types of user information is just as important as the information collected. For instance, do you collect data to improve the customer's experience? Is it to contact them in the future?

3. How is this information collected?

Thirdly, your policy should state how you're collecting personal information. Personal information is collected in various ways, both passively (cookies and third parties) and actively (registration forms, surveys, and checkout forms).

4. What will this information be used for, and who will access it?

How do you intend to use the personal information collected on your site? Are you simply storing it for a period of time and eventually deleting it? Will third parties have access to this information? If so, what parts can they access?

5. How will users be informed if your privacy policy changes?

Customers should know when you change your policy regarding the personal information they’ve entrusted to you and be alerted to said changes.

6. How can visitors with questions about your site's privacy statement contact someone?

Have different contact information for policy-related questions so they don’t end up mixed with general inquiries about your website.

7. How is user information protected?

How do you store all the private information from your visitors that you collect, and what measures do you use to safeguard it from malicious actors?

Regulations Are Constantly Changing

Owing to the need for ever-increasing protection, the world of privacy regulations is constantly changing. To illustrate, over 15 states have proposed privacy bills that will affect website privacy terms if passed. Additionally, five states have already passed laws that will go into effect throughout 2023. Non-compliance with these new and existing laws can adversely affect businesses. As we remember, Amazon was fined $877 million for GDPR violations in 2021.

Websites dealing with private information must ensure they prioritize data privacy. In addition, their privacy policy should strictly comply with existing laws, and there should be a strategy for staying up to date with evolving and new privacy laws.

Liquid Web Can Help With Compliant Web Hosting

While the law does not currently require most websites to have a privacy policy, it is something that you should seriously consider. A privacy policy can help build trust with your customers, inform them of how you use their information, and protect you from legal liability. 

If you need help creating a privacy policy for your website, Liquid Web can assist you. They are committed to protecting customers’ information, as shown by their security and compliance certifications, and will work with you to ensure that your privacy policy meets all legal requirements.

Contact one of The Most Helpful Humans In Hosting® today and learn more about how they care about your data privacy.