Website privacy policies could cost your business. Failing to consider the laws and regulations surrounding digital privacy in 2016, could lead to litigation for digital companies in the coming years.
You have a great idea for a website that is going to revolutionize an industry. You call it www.greatidea.com, and you can hardly sleep at night knowing its the greatest idea in the history of man. You’ve done your due diligence and you’ve determined there are no other ideas out there on the entire web, and you’re going to boot strap the creation of your idea using overseas developers and open source code.
You finalize and launch your beta and the idea proves to be ingenious. Although you have yet to commoditize your idea, traffic is up, users are happy, and you see a $1 Billion valuation in your future with a quick exit. You receive raving accolades from tech publications and industry insiders as the next Zuckerberg.
You then receive a knock on your apartment door and an unfamiliar face is looking back from the other side with an envelope in your hand. You open and greet him, only to receive a reply of “Mr. Jones? You’ve been served.”
Not understanding what just happened, you open the envelope to realize you’ve been served with a class action lawsuit filed in the State of California against you personally as the owner of www.greatidea.com. You’re not even located in California. You live in Texas, and your developers are in Bangladesh. So why are you being sued in California?
Whether you realize it or not, your online company is subject to the laws of any state in which it does business, including customer data privacy. Therefore, unless you’re an internet company that blocks the submission of information from anywhere but your home state, you need to be mindful of website privacy policies across the United States. Not to mention the rules of the Federal Trade Commission and the Federal Communications Commission when it comes to website privacy policies. Failing to maintain compliance in a state could lead to litigation under that state’s privacy requirements.
- Introduction (Who, what, why).
- Information you collect.
- Log Data – for businesses that use data in analytics.
- What you use the information for.
- How are Cookies used?
- What is Your Security?
- How are changes to the policy handled?
- Where can consumers contact you?
You also must included state specific privacy requirements. For example California has led the way in enacting a series of privacy laws that must be considered and complied with not only by California resident companies, but also by any online business that has California resident customers.
With the complex maze of privacy requirements now in effect at both the state and federal level, and the ever changing regulatory landscape, it helps to have strategic partners to help you navigate those waters. The digital business law team at Smith Simmons is prepared to help your online business remain compliant with website privacy laws. Contact us today to arrange a review of your existing policies or future needs.