Drafting a Privacy Policy that Works

We live in an information economy.  While many companies have privacy policies and/or terms and conditions on their websites governing how they collect and use personal information, such policies are typically poorly drafted, fail to convey important information, or are simply inaccurate.  Class action suits have targeted dozens of companies for alleged failure to communicate what information they collect and why.

Website visitors typically provide information by typing it in the appropriate field and checking a consent box, or taking some similar step, but companies collect much more information without relying on the consumer’s help. Web analytics track consumers as they move from page to page within a site. Cookies store user histories and preferences as a file on the user’s browser. Third-party marketers mine for information about consumers habits. Even if the information gathered is not associated with a consumer’s name, privacy concerns may arise. So how can you be sure you’re sending clear messages about privacy and getting truly informed consent?

First, be as clear, concise and transparent as possible.  Your privacy policy should not read like a technical manual. While you may have to master terms like “query string,” “web beacon,” and “trace route,” those terms mean nothing to your audience. Also, many of these technical details change so regularly that your privacy policy will be out of date before it’s uploaded to the site.

Second, focus on information the consumer needs to make choices. Try to draft your policy from a “cause and effect” point of view. For example, “if you use the website, then we will collect X. If you create a registered account, we will require Y. If you give us this piece of information, we will share it with Z. If you have a question or complaint, then please contact us here.”  Third, your policy should be written as simply as possible, in plain language. Use common words over advanced vocabulary. Favor short, declarative sentences. Make it easy for the reader to find what he or she is looking for by using headings. If it fits your corporate culture, don’t be afraid to draft the policy in a fun, approachable way. Zynga Inc., the company behind FarmVille, created PrivacyVille. In PrivacyVille, gamers earn points by showing that they understand Zynga’s privacy policy.  Finally, the text of a privacy policy matters, but so, too, does its placement on the website. If the consumer has to follow a link, is the link easy to find? Is the font size large enough?

Best practices and customer expectations will change over time. So too must your privacy policy. Make clear to consumers how you will communicate changes to your privacy policy, and what constitutes their consent to such changes. A privacy policy is a contract, and a contract needs to be written clearly. Good privacy policies all start by knowing what to say, and how to say it. But above all, say it in plain English.

Music Industry Prepares to do Battle with Artists Over Rights to Recordings

I read an excellent article in the New York Times yesterday about musicians reclaiming ownership of their original recordings from labels. Hits like Bruce Springsteen’s “Darkness on the Edge of Town,” Billy Joel’s “52nd Street,” Kenny Rogers’s “Gambler” and Funkadelic’s “One Nation Under a Groove” have generated tens of millions of dollars for record companies over the years, but US copyright law (which was revised in 1978) allows for musicians to regain control of their work via a “termination right” after 35 years, provided that they apply to do so in advance.  Hard to believe, but each of the recordings listed above (and many, many more) are approaching their 35th anniversary.

Illegally downloading of new releases in recent years has left record labels disproportionately dependent on sales revenue from older recordings. Labels can ill afford to lose the proceeds from these sales.  Not surprisingly, the labels contend that the masters belong to them in perpetuity because they are “works made for hire” – works created, not by independent musicians, but by “employees” hired by the labels to record the songs.

The article suggests that the label’s contention is a weak one.  First, musicians typically pay for the making of the records themselves (as well as touring, distribution, etc) via advances against their royalties.  Second, musicians do not receive benefits from, nor are they obligated to, employers in the traditional sense.  As the saying goes, if it walks like an independent contractor…

It will be interesting to see what rights the song writers (if different from the musician performing the song) are entitled to.  Also, as the article suggests, will foreign bands be able to exercise termination rights on their American recordings even though their original contract was signed outside the US?  It looks we’ll all have front row seats to what I’m sure will be a killer performance by the artists and the labels.

Wild, Wild West No More: FTC Disclosure Rules Regarding Blogger Compensation

In October 2009, the Federal Trade Commission (“FTC”) issued revised “Guides Concerning the Use of Endorsements and Testimonials in Advertising” (the “Guidelines”) that may impose disclosure requirements on bloggers (and Tweeters, Facebookers and other online publishers) who endorse certain products and services.

The Guidelines, which until 2009 had remained unaltered for nearly 30 years, call for bloggers to disclose their relationship with a company when they are being paid or otherwise compensated by that company to comment favorably on its products or services. The Guidelines also suggest that bloggers may be held liable for making misleading or unsubstantiated claims about such a product or service.

As a blogger, you may be asking, “Why must the FTC bathe in the tears of we poor bloggers”?  Relax.  The Guidelines really aren’t that onerous or unfair if you take a moment to think about the requirements and the public policy rationale behind them.

First, the disclosure requirement applies only to bloggers endorsing companies for compensation (i.e., ad revenue, spokesperson fees, commissions, a “steady stream” of freebies, etc.).  If, for example, you’re a fashion stylist blogging about fashion simply because you L-I-V-E (*fingers snapping*) fashion, or because you want to gain exposure for your work, you may say all the wonderful things you want about how fierce your Jimmy Choos look or how informative you found Elle’s cover story on makeup for Eskimos to be.  Of course, there are other issues pertaining to libel, copyright, and other matters which are outside of the scope of this article but which you must nonetheless be aware of before posting anything.  At All.  Ever.

Second, for those bloggers receiving compensation, the Guidelines are easily complied with.  In fact, the disclosure statements suggested in the Guidelines themselves are fairly benign (i.e., “ABC Company gave me this product to try.”  That’s not so bad, right? Just make sure to clearly and conspicuously disclose your relationship, preferably within the actual blog post pertaining to the product or service.  Although there is no definitive FTC statement on this issue, a blanket statement on your blog home page really doesn’t cut it because it does not adequately notify your audience about which brands are compensating you to endorse which products and services. If you are using WordPress, you can automate the process by using the Add Post Footer plug-in.  You’ll need to enter a default disclaimer, which you can then override on a post-by-post basis using a custom field.

Third, the FTC has gone out of its way to indicate, publicly, that they are way more interested in educating bloggers than suing them.  They’ve got bigger fish to fry.  Furthermore, they’re on record as saying that there is no monetary penalty for a first-time violation, even if the violation is a fairly serious one (which it won’t be if you simply follow the Guidelines and/or use common sense).

Finally, fourth, if you’re serious about your blogging career, the FTC’s meddling is actually a really positive thing.  By issuing these guidelines, the FTC is regulating transparency in blogs the same way it regulates transparency in newspapers, magazines and television.  Bloggers are no longer the red-headed stepchildren of journalism.  Rejoice!  After all, you’ve been burning the midnight oil, furiously typing away while the night pulls itself apart on the crimson seams of yet another sunrise for a while now…  You’re not doing this for your health, right? And the FTC’s imprimatur should be a great help to you the next time you pitch that stodgy CPG brand about working with you, or that fuddy-duddy media outlet about using you as a talking head.

It is important to note that even after making any necessary disclosure statements, you must also avoid making any false, misleading or unsubstantiated claims about a product or service you endorse. Again, The FTC is not out to get bloggers sharing their opinions but, at the same time, you shouldn’t make blanket factual claims about an endorsed product that you can’t substantiate and support.