Why Small Business Websites Need a Privacy Policy

As a small business owner, you may be asking yourself, do I really need a Privacy Policy?

You may have heard about large businesses such as Facebook or Amazon getting into trouble with legislators and being fined millions of dollars because of their poor privacy practices, but how likely is it that your small business would get into the same kind of trouble? Is the Federal Trade Commission or your state’s Attorney General really going to be knocking on your doors? Are lawyers really going to spend their time tracking down small companies that they can sue for not having a Privacy Policy? All of these are great questions and I hope that I can give you some insight into how your small business should approach privacy.

The Trust Factor

First, why do people shop at or use the services of small businesses? While I cannot speak for everyone, I shop at small businesses because I trust them. A small business is a labor of love and commitment – you know that the small business owner is doing everything that they can to provide good services or products and that the customer always comes first. It is much more likely that Facebook or Amazon will sell your private information than a small business because small business owners usually have a lot more respect for their customers than the giant tech monopolies that have very little or no competition.

Regardless of where they shop though, consumers now want to know that their data is secure and protected and that it will not be sold to some third party who will endlessly text them about the latest deals. A small business that does not have a Privacy Policy shows their customers that they do not care about their privacy and are unwilling to take the extra time to reassure them that yes, your data is safe with us. The lack of that reassurance can obliterate the trust factor and push the consumer to larger brands because, if your privacy is not going to be taken seriously anyway, you might as well just go with a bigger name.

The Legal Liability Factor

Currently, there are over a dozen proposed bills across the United States that impose requirements on businesses, such as requiring a business that collects personal information to have a Privacy Policy. While it is true that most of those bills apply only to businesses that make millions of dollars in revenue, some bills do not have a small business exemption. The fact is that consumers want privacy and, while most of the anger is centered around large corporations, the topic is trending towards applying to all businesses, even small ones. And yes, while the Federal Trade Commission and the state Attorney Generals will at first focus on the large companies, they will take consumer complaints about other businesses into account when deciding who to sue.

If consumers are complaining about your website and a lack of a Privacy Policy on that website, the authorities are bound to take note. You can think of this as you do about your taxes – just because you are small, does that mean that the IRS will ignore you and allow you to not pay taxes for years? That’s not a bet that I’d be willing to take. Penalties for failing to take privacy seriously can range from the thousands to the millions. As a small business, a penalty of that size can take you out of business.

While Facebook may be able to afford billions in terms of penalties and attorneys’ fees, that type of expenditure is just not feasible for small businesses. Most of the proposed bills also allow consumers and their lawyers to sue businesses directly. While the Federal Trade Commission and the Attorney Generals have very limited time and resources, plaintiff’s lawyers have nothing but time when it comes to finding who to sue. These attorneys are not shy about starting dozens of lawsuits at any given time and do not limit their scope to the biggest companies out there. The truth is that protecting yourself costs a lot less and will save you a lot of money and headache in the future.

The Reputation Factor

This is a great time to become a leader in your industry and to distinguish yourself from your competition as a privacy-focused business. Your customers will appreciate the fact that you care about them and their privacy, even if you are a small company. Furthermore, they will appreciate the fact that you are willing to consider their concerns and respond in an appropriate way even if the giants such as Google are not.

Having a Privacy Policy will help you build and retain the trust of your customers, help you avoid liability and will work wonders for your reputation. As a small business, you take care of your customers and strive to be better every day – why not do so by providing your customers with peace of mind regarding their privacy.

Donata Kalnenaite
Termageddon, LLC 

Disclaimer: this post should not be taken as legal advice.  

Author Bio

Donata is the President of Termageddon, which is a Privacy Policy generator that automatically updates its policies whenever the laws change. She is a licensed attorney and a certified information privacy professional. She often volunteers at the Illinois State Bar Association holding courses on the General Data Protection Regulation where she teaches other attorneys on the importance of privacy and what Privacy Policies should contain. In her free time, Donata enjoys bee keeping, hunting for morel mushrooms and walks with her fiancé and two dogs.

As a partner of Termageddon, I offer all of my clients Privacy Policy and Terms of Service plans at a discounted rate. If you are interested in adding these policies to your website, please contact me.

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