During the last year, Facebook®, Twitter®, and Google® each settled disputes with the Federal Trade Commission ("FTC") relating to website privacy, and Google® has reportedly paid $8.5 million to settle a class action suit based on similar privacy-based claims. Even though actions against these Internet giants capture the headlines, all companies, regardless of size, with websites can learn valuable lessons from the FTC's recent enforcement actions (as Upromise, Inc. learned just days ago when the FTC took action against it on similar grounds).
The following are various aspects of website privacy law that you should ensure your company does not overlook.
Conducting On-Line Business
If your company does business through its website, it may well have additional financial privacy protection obligations and disclosure requirements under various federal and state financial privacy laws, particularly if credit is extended for on-line transactions. Any company engaging in transactions through its website needs to be aware of the many additional legal obligations created by the patchwork of financial privacy laws.
Websites directed at children are subject to additional restrictions and requirements under the Children's Online Privacy Protection Act ("COPPA"). If your company's website, or a section of the website, is designed for children, COPPA disclosures and policies are necessary.
Opt-Out Requirements for Advertising
Don't Forget State Laws
A few states have their own website privacy laws with which your company must comply if you are directing your website to residents of any of those states. For example, if your company's website is directed at California residents, or at U.S. audiences generally, your website will need to comply with California's rules, which are reputed to be the most rigorous and which include specific requirements that may go beyond the requirements of the federal rules.
Internet privacy is gaining increasing attention from governmental entities, consumer groups, and plaintiffs' class action attorneys, and is expected to be an emerging source of risk for many companies. Fortunately, much of that risk is avoidable if care is taken to observe the patchwork of applicable legal requirements.
© 2023 Ward and Smith, P.A.
This article is not intended to give, and should not be relied upon for, legal advice in any particular circumstance or fact situation. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney.