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Privacy policy is a statement or a legal document (privacy law
Privacy law
Privacy law refers to the laws which deal with the regulation of personal information about individuals which can be collected by governments and other public as well as private organizations and its storage and use....

) that discloses some or all of the ways a party gathers, uses, discloses and manages a customer or client's data. Personal information can be anything that can be used to identify an individual, not limited to but including; name, address, date of birth, marital status, contact information, ID issue and expiry date, financial records, credit information, medical history, where you travel, and intentions to acquire goods and services. In the case of a business it is often a statement that declares a party’s policy on how it collects, stores, and releases personal information it collects. It informs the client what specific information is collected, and whether it is kept confidential, shared with partners, or sold to other firms or enterprises.
Privacy policy is important to the modern state, because grounded in it is the individual's physical and moral autonomy. For this reason, it is worthy of constitutional protection. The exact contents of a privacy policy will depend upon the applicable law and may need to address requirements across geographical boundaries and legal jurisdictions. Most countries have their own legislation and guidelines of who is covered, what information can be collected, and what it can be used for. In general, data protection laws in Europe cover the private sector as well as the public sector. Their privacy laws apply not only to government operations but also to private enterprises and commercial transactions. In North America, privacy laws (except in Quebec) apply only to the public sector, not to the private sector. However, most private sector organizations in North America have taken the initiative to develop their own privacy policies and codes of conduct.

History


In 1968, the Council of Europe began to study the effects on technology on human rights, recognizing the new threats posed by computer technology that could link and transmit in ways not widely available before. As well, in 1969 the Organisation for Economic Co-operation and Development
Organisation for Economic Co-operation and Development
The Organisation for Economic Co-operation and Development is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade...

(OECD) began to examine the implications of personal information leaving the country. All this led council to recommend that policy be developed to protect personal data held by both the private and public sectors, leading to Convention 108. In 1981,Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data
Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data
The Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data of the Council of Europe of 1981 extended the safeguards for everyone's rights and fundamental freedoms, and in particular the right to the respect for privacy, taking account of the increasing...

 (Convention 108) was introduced. One of the first privacy laws ever enacted was the Swedish Data Act in 1973, followed by the West German Data Protection Act in 1977 and the French Law on Informatics, Data Banks and Freedoms in 1978.

In the United States, concern over privacy policy started around the late 1960's and 1970's saw the passage of the Fair Credit Reporting Act
Fair Credit Reporting Act
The Fair Credit Reporting Act is a United States federal law that regulates the collection, dissemination, and use of consumer information, including consumer credit information. Along with the Fair Debt Collection Practices Act , it forms the base of consumer credit rights in the United States...

. Although this act was not designed to be a privacy law, the act gave consumers the opportunity to examine their credit files and correct errors. It also placed restrictions on the use of information in credit records. Several congressional study groups in the late 1960s examined the growing ease with which automated personal information could be gathered and matched with other information. One such group was an advisory committee of the United States Department of Health and Human Services (HHS) which in 1973 drafted a code of principles called the Fair Information Practices. The work of the advisory committee led to the Privacy Act in 1974. The United States signed the Organisation for Economic Co-operation and Development
Organisation for Economic Co-operation and Development
The Organisation for Economic Co-operation and Development is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade...

 guidelines in 1980.

In Canada, a Privacy Commissioner of Canada
Privacy Commissioner of Canada
The Privacy Commissioner of Canada is a special ombudsman and an officer of parliament who reports directly to the House of Commons and the Senate....

 was established under the Canadian Human Rights Act
Canadian Human Rights Act
The Canadian Human Rights Act is a statute originally passed by the Parliament of Canada in 1977 with the express goal of extending the law to ensure equal opportunity to individuals who may be victims of discriminatory practices based on a set prohibited grounds such as gender, disability, or...

 in 1977. In 1982, the appointment of a Privacy Commissioner was part of the new Privacy Act. Canada signed the OECD guidelines in 1984.

Fair Information Practice


The four critical issues identified in Fair Information Principles are:
  • Notice – data collectors must disclose their information practices before collecting personal information from consumers
  • Choice – consumers must be given options with respect to whether and how personal information collected from them may be used for purposes beyond those for which the information was provided
  • Access – consumers should be able to view and contest the accuracy and completeness of data collected about them
  • Security – data collectors must take reasonable steps to assure that information collected from consumers is accurate and secure from unauthorized use.


In addition the Principles discuss the need for enforcement mechanisms to impose sanctions for non-compliance with fair information practices.

Current Enforcement


In 1995 the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

 (EU) introduced the Data Protection Directive for its member states. As a result, many organizations doing business within the EU began to draft policies to comply with this Directive. In the same year the U.S. Federal Trade Commission
Federal Trade Commission
The Federal Trade Commission is an independent agency of the United States government, established in 1914 by the Federal Trade Commission Act...

 (FTC) published the Fair Information Principles which provided a set of non-binding governing principles for the commercial use of personal information. While not mandating policy, these principles provided guidance of the developing concerns of how to draft privacy policies.
The United States does not have a specific federal regulation establishing universal implementation of privacy policies. Congress has, at times, considered comprehensive laws regulating the collection of information online, such as the Consumer Internet Privacy Enhancement Act and the Online Privacy Protection Act of 2001, but none have been enacted. In 2001, the FTC stated an express preference for "more law enforcement, not more laws" and promoted continued focus on industry self regulation.

In many cases, the FTC enforces the terms of privacy policies as promises made to consumers using the authority granted by Section 5 of the FTC Act which prohibits unfair or deceptive marketing practices. The FTC's powers are statutorily restricted in some cases; for example, airlines are subject to the authority of the Federal Aviation Administration
Federal Aviation Administration
The Federal Aviation Administration is the national aviation authority of the United States. An agency of the United States Department of Transportation, it has authority to regulate and oversee all aspects of civil aviation in the U.S...

 (FAA), and cell phone carriers are subject to the authority of the Federal Communications Commission
Federal Communications Commission
The Federal Communications Commission is an independent agency of the United States government, created, Congressional statute , and with the majority of its commissioners appointed by the current President. The FCC works towards six goals in the areas of broadband, competition, the spectrum, the...

 (FCC).

In many cases, private parties enforce the terms of privacy policies by filing class action
Class action
In law, a class action, a class suit, or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued...

 lawsuits, which may result in settlements or judgements.

Applicable US law


While no generally applicable law exists, some federal laws govern privacy policies in specific circumstances, such as:

The Children's Online Privacy Protection Act (COPPA) affects websites that knowingly collect information about or target at children under the age of 13. Any such websites must post a privacy policy and adhere to enumerated information-sharing restrictions COPPA includes a Safe Harbor provision to promote Industry self regulation.

The Gramm-Leach-Bliley Act requires institutions "significantly engaged in financial activities give "clear, conspicuous, and accurate statements" of their information-sharing practices. The Act also restricts use and sharing of financial information.

Health Insurance Portability and Accountability Act (HIPAA) Privacy Rules requires notice in writing of the privacy practices of health care services, and this requirement also applies if the health service is electronic.

Some states have implemented more stringent regulations for privacy policies. The California Online Privacy Protection Act of 2003 - Business and Professions Code sections 22575-22579 requires "any commercial web sites or online services that collect personal information on California residents through a web site to conspicuously post a privacy policy on the site". Both Nebraska and Pennsylvania have laws treating misleading statements in privacy policies published on Web sites as deceptive or fraudulent business practices.

Applicable Canadian law


Canada's federal Privacy Law
Privacy law
Privacy law refers to the laws which deal with the regulation of personal information about individuals which can be collected by governments and other public as well as private organizations and its storage and use....

 applicable to the private sector is formally referred to as Personal Information Protection and Electronic Documents Act
Personal Information Protection and Electronic Documents Act
The Personal Information Protection and Electronic Documents Act is a Canadian law relating to data privacy. It governs how private sector organizations collect, use and disclose personal information in the course of commercial business. In addition, the Act contains various provisions to...

(PIPEDA). The purpose of the act is to establish rules to govern the collection, use and disclosure of personal information by commercial organizations. The organization is allowed to collect, disclose and use the amount of information for the purposes that a reasonable person would consider appropriate in the circumstance.

The Act establishes the Privacy Commissioner of Canada
Privacy Commissioner of Canada
The Privacy Commissioner of Canada is a special ombudsman and an officer of parliament who reports directly to the House of Commons and the Senate....

 as the Ombudsman for addressing any complaints that are filed against organizations. The Commissioner works to resolve problems through voluntary compliance, rather than heavy-handed enforcement. The Commissioner investigates complaints, conducts audits, promotes awareness of and undertakes research about privacy matters.

European Union


There are significant differences between the EU data protection and US data privacy laws. These standards must be met not only by businesses operating in the EU, but also by any organization that transfers personal information collected concerning citizen of the EU. In 2001 the United States Department of Commerce
United States Department of Commerce
The United States Department of Commerce is the Cabinet department of the United States government concerned with promoting economic growth. It was originally created as the United States Department of Commerce and Labor on February 14, 1903...

 worked to ensure legal compliance for US organizations under an opt-in Safe Harbor Program. The FTC has approved eTrust to certify streamlined compliance with the US-EU Safe Harbor.

Online Privacy Certification Programs


Online Certification or "Seal" programs are an example of industry self-regulation of privacy policies. Seal programs usually require implementation fair information practices as determined by the certification program and may require continued compliance monitoring. TRUSTe
TRUSTe
TRUSTe is a company based in San Francisco, California, best known for its online privacy seals. TRUSTe operates the world’s largest privacy seal program, certifying more than 3,500 websites, including leading online portals and brands like Yahoo, Facebook, Microsoft, Apple Inc., IBM, Oracle...

, the first online privacy seal program, included more than 1,800 members by 2007 Other online seal programs include the Trust Guard Privacy Verified program, eTrust, and Webtrust.

Technical implementation


Some websites also define their privacy policies using P3P
P3P
The Platform for Privacy Preferences Project, or P3P, is a protocol allowing websites to declare their intended use of information they collect about browsing users...

 or Internet Content Rating Association
Internet Content Rating Association
Internet Content Rating Association was an international non-profit organization with offices in the United States and the United Kingdom...

 (ICRA), allowing browsers to automatically assess the level of privacy offered by the site, and allowing access only when the sites privacy practices are in line with the users privacy settings. However, these technical solutions do not guarantee websites actually follows the claimed privacy policies. They also require users to have a minimum level of technical knowledge to configure their own browser privacy settings. These automated privacy policies have not been popular either with websites or their users.

Criticism


Many critics have attacked the efficacy and legitimacy of privacy policies found on the Internet.
Concerns exist about the effectiveness of industry-regulated privacy policies. For example, a 2000 FTC report Privacy Online: Fair Information Practices in the Electronic Marketplace found that while the vast majority of website surveyed had some manner of privacy disclosure, most did not meet the standard set in the FTC Principles. In addition, many organizations reserve the express right to unilaterally change the terms of their policies. In June 2009 the EFF
Electronic Frontier Foundation
The Electronic Frontier Foundation is an international non-profit digital rights advocacy and legal organization based in the United States...

 website TOSback began tracking such changes on 56 popular internet services, including monitoring the privacy policies of Amazon
Amazon.com
Amazon.com, Inc. is a multinational electronic commerce company headquartered in Seattle, Washington, United States. It is the world's largest online retailer. Amazon has separate websites for the following countries: United States, Canada, United Kingdom, Germany, France, Italy, Spain, Japan, and...

, Google
Google
Google Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program...

 and Facebook
Facebook
Facebook is a social networking service and website launched in February 2004, operated and privately owned by Facebook, Inc. , Facebook has more than 800 million active users. Users must register before using the site, after which they may create a personal profile, add other users as...

.

There are also questions about whether consumers understand privacy policies and whether they help consumers make more informed decisions. A 2002 report from the Stanford Persuasive Technology Lab contended that a website's visual designs had more influence than the website's privacy policy when consumers assessed the website's credibility. A 2007 study by Carnegie Mellon University
Carnegie Mellon University
Carnegie Mellon University is a private research university in Pittsburgh, Pennsylvania, United States....

 claimed "when not presented with prominent privacy information..." consumers were "…likely to make purchases from the vendor with the lowest price, regardless of that site's privacy policies However, the same study contends where privacy information is clearly presented, consumers prefer retailers who better protect their privacy and may "pay a premium to purchase from more privacy protective websites." Furthermore, a 2007 study at the University of California, Berkeley
University of California, Berkeley
The University of California, Berkeley , is a teaching and research university established in 1868 and located in Berkeley, California, USA...

 found that "75% of consumers think as long as a site has a privacy policy it means it won’t share data with third parties," confusing the existence of a privacy policy with extensive privacy protection.

Critics also question if consumers even read privacy policies or can understand what they read. A 2001 study by the Privacy Leadership Initiative claimed only 3% of consumers read privacy policies carefully, and 64% briefly glanced at, or never read, privacy policies. One possible issue is length and complexity of policies. According to a 2008 Carnegie Mellon study the average length of a privacy policy is 2,500 words and requires an average 10 minutes to read. The study cited that "Privacy policies are hard to read" and, as a result, "read infrequently".

Further reading



External links