July 28, 2022

Why Does My Website Need a Privacy Policy?

Author: BreatheTechnicalSupport

No matter where in the world you are located, chances are that you see privacy policies all over the place. In the past, privacy policies were a large corporation issue. The little guys really didn't need to concern themselves with it - at least that's what we thought.

You'll notice more and more websites have links to their privacy policies and you're probably wondering - do I need a Privacy Policy?

It almost feels strange not to have one on your website. They are also showing in places like contact forms, signups, notifications and even just in the footer of a website.

There are 2 reasons why we are seeing privacy policies on website.

First, privacy laws from around the world state that policies are required most websites and not having one can lead to privacy-related fines, and in some cases, lawsuits.

Secondly, people who shop online are becoming very concerned about sharing their information with companies. Not having a Privacy Policy will make them feel even more leery of visiting your site or giving you their information. This can cause you to lose sales.

I will break down for you the reasons why a Privacy Policy is a good practice for your business, and why so many companies have one.

What Is A Website Privacy Policy?

A Privacy Policy is a digital 'document' or declaration on a website that informs your visitors of a your company’s privacy practices. This includes how they collect information from their visitors, how that information is used, and how and if they disclose Personally Identifiable Information (PII).

PII is any piece of information that could be used to identify an individual. PII commonly collected by websites include:

  • Name
  • Email Addresses
  • Phone and Cell Numbers
  • IP Addresses
  • Physical or Mailing Addresses
  • Many websites commonly collect PII with:
  • Contact Forms
  • Email Newsletter or lead generation sign up forms
  • Account creation forms
  • Purchase and Checkout forms
  • Website Analytics like Google Analytics

PII is protected by many privacy laws worldwide that require some websites to have a Privacy Policy that specifies what information the site takes, and what is done with it.

Why do companies set up a Privacy Policy? Legal Requirement

One of the main reasons that a company would set up a Privacy Policy is because it is a legal requirement to have one.

Here is a list of laws that require websites to have a Privacy Policy – and they can burden you with major fines if you don’t have any in place:

  • California Online Privacy and Protection Act of 2003 (CalOPPA);
  • California Consumer Privacy Act (CCPA);
  • Delaware Online Privacy and Protection Act (DOPPA);
  • Nevada Revised Statutes Chapter 603A;
  • General Data Protection Regulation (GDPR);
  • United Kingdom Data Protection Act (UK DPA 2018);
  • Personal Information Protection and Electronic Documents Act (PIPEDA);
  • Australia Privacy Act 1988;
  • Colorado Privacy Act (effective in 2023);
  • Virginia Consumer Data Protection Act (VCDPA – effective in 2023);
  • Quebec Bill 64 (effective in 2023);
  • Utah Consumer Privacy Act (effective in 2023); and
  • Connecticut SB6 (effective in 2023).

These laws are unique in the respect that they protect the visitors to your website and not your business. This can apply to businesses that do not function or are located in the state or country where the laws are passed.

This means, your business could be located in Winnipeg, Manitoba in Canada - but if you are reaching visitors in California, the CalOPPA applies to you if you collect information from California residents.

Nevada's laws for privacy applies to any business that has customers in Nevada, also regardless of where your business is actually stationed.

When you are figuring out what privacy laws pertain to you, you should ask yourself these questions:

  1. Where do I do business?
  2. Where are my customers living?
  3. Who am I marketing my products or services to?
  4. Who am I tracking online through cookies or other various types of analytics?

If any of the privacy laws apply to your business, then you are required by law to have a Privacy Policy that discloses what information is collected, why, and what it's used for.

Most companies choose to have a Privacy Policy and follow these laws since not complying can be very expensive. Fines can be anywhere from $2,500 to 20,000,000 or more per violation. This means that each visitor to your website whose privacy you 'infringe' on is a violation. Fines can add up extremely quickly, even if your website has only a few visitors per month.

With dozens of proposed bills on privacy in the USA and countries like Canada and Australia proposing reviews and updates to their laws, the Privacy Policy requirement is only going to get more strict and won't be going away.

With some of the bills proposing a private right of action where consumers would be given permission to sue a business directly for collecting their personal information without a proper policy, it is becoming extremely important to make sure that your website not only has a privacy policy, but that you have an effective and efficient way to keep your policy up-to-date with all the changing laws.

Consumers Prefer Companies Who Take Privacy Seriously

Another answer to the question of why businesses have a Privacy Policy is because customers expect a business to actually have one. Even though this is a more recent trend, over the past few years, customers are more worried about sharing their information online and are actively choosing to stop doing business with some specific companies because of privacy concerns.

These studies show the importance of privacy to customers online:

  • 7 in 10 Canadians refuse to provide PII to a company over privacy concerns – Office of the Privacy Commissioner of Canada;
  • 40% of consumers are concerned about what happens to their PII when shopping online – Empathy.co;
  • 93% of Americans would switch to a company that prioritizes privacy – Axios;
  • 83% of US voters want Congress to focus on privacy in 2021 – Morning Consult;
  • 67% of Americans say that there should be tougher penalties, such as high fines, for companies that do not protect the privacy of consumers – Consumer Reports.

This information shows 2 important issues as to why your business should have a clear, detailed Privacy Policy.

Caring about your visitor’s privacy and showing that by having a policy in place can give you an advantage over your competition.  Now that potential customers are starting to make their buying decisions based on privacy, you can actually increase your business by demonstrating that you can about their online safety and privacy as much as your visitors do.

It's no longer enough to just state that their information will not be sold or shared.

As consumers start pressuring their governments to make and pass privacy laws, the Privacy Policy requirement is going to increase in the future. Having something in place now can future-proof your business - and making sure they stay updated no matter what laws are passed is crucial.

Click here for more information on how to properly set up your Privacy Policies, and how they can be automatically updated with every new law that is brought in.

I can help to make sure you have the best policies set up for your requirements, and that you never need to research privacy laws to make sure you are always compliant.

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