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Developing a Meaningful Privacy Policy

Tuesday, June 10, 2014

In May 2014, California’s Attorney General Kamala Harris released recommendations for businesses addressing recent changes and best practices under California’s privacy laws. The guide is entitled “Making Your Privacy Practices Public: Recommendations on Developing a Meaningful Privacy Policy.”1 California is widely known for leading the nation in privacy laws, and particularly laws with respect to Web site privacy policies. Because these laws apply to any Web site with visitors from California, regardless of the location of the business, all companies should take heed of these recommendations. It is important to note that these recommendations do not carry the force of law and in some respects offer greater privacy protection for visitors than is required by existing California law.

Background

In 2003, California established the landmark California Online Privacy Protection Act (CalOPPA), which was the first law in the nation to require operators of commercial Web sites, including mobile apps, to conspicuously post a privacy policy if they collect personally identifiable information from Californians. In 2013, CalOPPA was amended by Assembly Bill 370, which requires privacy policies to include information on how operators respond to Do Not Track signals or similar mechanisms.

In 2012, Attorney General Harris created the Privacy Enforcement and Protection Unit to enforce federal and state privacy laws regulating the collection, retention, disclosure, and destruction of private or sensitive information by individuals, organizations, and the government. The unit also works to educate consumers and recommend best practices to businesses on privacy-related issues.

In 2014, Attorney General Harris’ Privacy Enforcement and Protection Unit consulted with numerous stakeholders from the business sector, academia, and privacy advocates, and developed the recommendations described in this alert.

Summary

At a high level, Attorney General Harris’s latest recommendations provide that companies publish privacy policy statements that not only address data collection and use practices but that are also easily readable and understandable by the general public. The guidance contains recommendations in the following broad areas:

  • scope of policy
  • availability
  • readability
  • data collection
  • online tracking/do not track
  • data use and sharing
  • individual choice and access
  • security safeguards
  • effective date, and
  • accountability.

Detailed Recommendations

The guide sets forth detailed recommendations on how to create meaningful privacy policies that do more than simply meet legal requirements.

Scope of Policy

Companies should explain the scope of their privacy policies. For example, a policy may apply only to online data collection and use practices, or it may also apply to a company’s offline practices. The explanation of the scope should also clearly set forth the entities covered by the policy, such as any subsidiaries or affiliates.

Availability

For Web sites, policies should be posted conspicuously. So visitors can easily locate the policy, the link should be on the homepage and every page where personal information is collected; the link should be in a larger font, perhaps in a contrasting color; and should contain the word “privacy.”

For online services such as mobile applications, links to the policy should be on the platform page as well as within the actual application (such as a settings page or “information” page). Users must be able to view the policy before they download an application.

Readability

In general, privacy policies should be written in plain language. This means: (1) minimizing technical or legal jargon; (2) using short sentences; (3) using the active voice; (4) using titles and headers; (5) possibly providing the policy in multiple languages; and (6) considering the format of the policy on the screens on which it will be read.

Data Collection

Every privacy policy should clearly describe how a company collects personally identifiable information. This includes disclosure of whether the company collects personally identifiable information on users or visitors from other sources, or through technologies such as cookies or web beacons. Further, the policy should describe the specific kind and categories of personally identifiable information collected. Companies collecting personally identifiable information from children under the age of 13 should consult the Federal Trade Commission’s guidance on the Children’s Online Privacy Protection Act.2

In general, personally identifiable information is any information relating to an identified or identifiable natural person. It includes any piece of information that can be used to uniquely identify or trace an individual’s identity, alone or when combined with other personal or identifying information that is linked or linkable to a specific individual.3

Online Tracking/Do Not Track

In 2013, California passed AB370, a “tracking transparency” law that amended CalOPPA by adding disclosures about online tracking (i.e., collecting personally identifiable information about consumers as they move across different Web sites or online services over time) to the requirements for a privacy policy. The new provisions do not prohibit online tracking or set a standard for how operators should respond to a “Do Not Track” (DNT) browser signal; but merely require disclosures regarding (1) how the operator does respond to such signals or similar mechanisms and (2) the possible presence of other parties conducting online tracking to the operator’s site or service.

Online tracking is invisible to consumers. Consumers whose browsers send a DNT signal cannot easily determine how a site or service responds to the signal. Thus, the guidance recommends:

  • Clearly identify the section of the privacy policy relating to online tracking. Headers such as “How We Respond to Do Not Track Signals,” “Online Tracking” or “California Do Not Track Disclosures” are good examples.
  • Describe how the Web site responds to DNT signals or similar mechanisms. The description may explain whether the Web site treats visitors whose browsers send DNT signals are treated differently or whether the Web site responds at all to DNT signals.
  • If a policy does not describe a Web site’s response to DNT signals, it should contain a conspicuous link to a program that offers consumers a choice about online tracking, along with a brief, general description of what the program does.
    • Disclose whether or not the Web site complies with the program in the privacy policy.
    • Disclose the effect of the program. For example, does participation result in the cessation of collection of personally identifiable information across Web sites or online services over time?
    • Make sure that the linked page clearly identifies steps consumers must take to exercise the choice offered by the program.
  • Disclose whether other parties collect personally identifiable information on the Web site or service, if any. If so:
    • Are they only approved parties?
    • How does the company verify that authorized third parties are not bringing unauthorized parties to the company’s site or service to collect personally identifiable information?
    • Can the company ensure that authorized third-party trackers comply with its DNT policy?

Data Use and Sharing

A privacy policy should explain a company’s use and sharing of personally identifiable information. In particular, if personally identifiable information is used beyond what is required for a customer transaction or for basic functionality, this should be disclosed. The policy should further explain the company’s practices regarding sharing personally identifiable information with third parties (such as affiliates and marketing partners). Other data use disclosures include:

  • a list of the different types or categories of companies with which the company shares personally identifiable information
  • links to privacy policies of third parties with whom the company shares personally identifiable information, and
  • the retention period for each type or category of personally identifiable information collected.

Individual Choice and Access

Each privacy policy should describe the choices consumers have regarding the collection, use and sharing of their personal information. The policy should further explain how individuals can exercise these choices. Internally, companies should ensure that their practices actually honor consumer choices.

Additionally, consumers should be provided with an opportunity to review and correct their personal information. Of course, prior to granting access to personal information, companies should verify identities and authenticate access rights, particularly with respect to sensitive information. Companies should then carefully document any changes or corrections to personal information through audit logs or transaction histories.

Security Safeguards

A privacy policy should explain how a company protects its customers’ personal information from unauthorized access, modification, use and destruction. This can include a general description of internal security measures, as well as measures a company imposes on third parties with whom it shares customer personal information.

Effective Date

Clearly identify the effective date of a privacy policy. Explain how you will notify consumers about any material changes to the policy in the future. The guidance suggests that companies go further than merely changing policy language online to make consumers aware of such changes.

Accountability

Each policy should contain contact information in the event a consumer has questions or concerns about a company’s privacy policies and practices. At a minimum, provide a title and e-mail address, but also consider providing a telephone number. Make sure someone at the company is adequately trained to handle requests and questions regarding the company’s privacy policy and practices.

Pepper Point

The recommendations summarized above will help you craft a more meaningful privacy policy. Each company’s privacy practices are different and each company has unique concerns. Pepper Hamilton’s attorneys routinely advise and draft privacy policies for businesses of varying sizes and industries, and can assist in the creation of a tailored privacy policy that not only meets legal requirements, but is also customized for your particular needs.

Endnotes

1 To view the full publication, please see http://oag.ca.gov/sites/all/files/agweb/pdfs/cybersecurity/making_your_privacy_practices_public.pdf.

2 To review a copy of the guidance, please see http://www.business.ftc.gov/documents/0493-Complying-with-COPPA-Frequently-Asked-Questions.

3 For a detailed definition of “personally identifiable information” in California, see California Senate Bill No. 46 (can be viewed at http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140SB46).

Sharon R. Klein and Melissa L. Nuñez

Written by

Sharon R. Klein
Phone: 949.567.3506
215.981.4172
213.928.9800

Fax: 949.863.0151
215.981.4750
213.928.9850

kleins@pepperlaw.com

Melissa Louise Nuñez
Phone: 949.567.3548
213.928.9800

Fax: 949.863.0151
213.928.9850

nunezm@pepperlaw.com


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The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.

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