What is a privacy policy and why is it important?

Privacy policies are important because it gives organisations a simple way to communicate to stakeholders how they deal with the personal information that they handle in order to provide their services. Requiring organisations to publicly share this statement also prompts meaningful consideration of the processes that are in place. 

Users voluntarily hand over their data all the time; from newsletter sign-ups to free trial requests - the data that is captured should be proportional and protected. The privacy policy outlines the who, what, why, and how behind data collection practices, including the parties involved in handling that data and the purposes for which it is used.

Common questions about privacy policies

We’ve compiled a list of answers to common questions that arise when drafting a privacy policy. The following guide will help you create a policy that’s both compliant and clear:

1. What information do you collect?

List all types of personal data you collect—such as names, emails, IP addresses, billing details, user activity, and metadata. Make sure to create a distinction between sensitive and non-sensitive data. We’ve written more about it here.

2. Why do you collect this information?

Explain the purpose behind data collection. This can include service delivery, customer support, legal compliance, user analytics, or providing personalised experiences.

Tip: Be concise about the relevance of data collection for your end-use. The data being collected should be proportionate. If you’re dealing with data from EU or EEA citizens, you must also not use data for any other purposes than the ones you state here. 

3. How is the data collected and handled?

Specify whether you use cookies, web forms, third-party integrations, or tracking pixels. Describe how the information is stored, secured, and who has access to it.

Best Practice: Clarify both technical and organisational safeguards, such as encryption or access restrictions. For example, incorporate a statement about who has access to the data.

4. Who can access or share this data?

Identify any third-party service providers, hosting platforms, or analytics tools that interact with user data, and explain under what circumstances data may be shared.

Common Mistake: Omitting third-party access or failing to mention international data transfers. For the importance of the latter, reach out to us for more information!

5. What rights do users have over their data?

Depending on applicable laws (like GDPR, CCPA, PIPEDA), users probably have rights to access, correct, delete, or restrict the use of their data. Explain how users can exercise their rights and how to contact your team should they want to. 

Tip: Include a dedicated email or contact form for data-related inquiries.

6. How will users be notified of changes to your policy?

Make it clear how and when you’ll update your privacy policy (for example, an email notice). Explain why changes might be made to your policy, as you’ll be referencing this in your communication, should any changes actually arise.

Advice: Transparency in your communication reinforces credibility and user confidence.

7. Is a privacy policy legally required?

While requirements vary by jurisdiction, any organization collecting personal information, especially across borders, should have a privacy policy in place. Many consumer protection laws, such as the GDPR (EU), mandate privacy disclosures. If you’re not able to comply, it  can result in significant penalties, reputational damage, and loss of business. 

Conclusion

A well-structured privacy policy communicates how and why your orgnisation collects personal information, and what it subsequently does with that data. By clearly explaining your data practices along with user rights and safeguards you not only meet legal obligations but also demonstrate a commitment to proper data management.

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