By detailing what kind of data a company collects, why it collects such data, and how it plans to secure user information, a privacy policy offers transparency, demonstrates a commitment to fair use, and keeps companies compliant with stringent regulations.
However, privacy policies are often written on separate pages and tucked away at the footer of screens, where eyes hardly go. Most users carry on without awareness of such policies, yet their continued engagement is taken as implied consent (as stipulated in the policy, which they didn’t read).
This exposes organizations to several potential challenges, from disputes and unenforceability to non-compliance and legal penalties.
Thankfully, all this can be avoided with one simple solution: clickwrap.
In this guide, we'll discuss the details of a clickwrap privacy policy, its benefits, and how to get the best results from it.
What is a clickwrap privacy policy?
A clickwrap privacy policy is a prompt on digital platforms that requires users to actively acknowledge and agree to an organization's policy on the collection, use, and disclosure of personal data.
As shown in the image above, the user must hit the checkbox to acknowledge that they have read and agree with the various terms relevant to their engagement with the company’s digital properties. Each term, including the privacy policy, is written on a separate page and hyperlinked within the clickwrap prompt.
Another method of indicating consent to clickwrap contracts is clicking a button that says “I Accept” or something similar.
Also Read: Clickwrap Agreements—The Ultimate Guide
The goal of clickwrap privacy policies (or clickwrap contracts in general) is to obtain explicit, undeniable consent from users who engage with an organization on digital platforms. This is crucial for several reasons, which we will discuss in the following sections.
“The keys to an enforceable user agreement come down to “notice” to and “acceptance” by the user.”
~Sterling Miller, CEO and Senior Counsel Hilgers Graben PLLC
Ten Things: Website User Agreements
Privacy policy on digital platforms: problems with the old approach
Owing to growing concerns about how organizations utilize customer data, most jurisdictions around the world have established rules aimed at protecting user privacy and giving individuals more control over their information.
Privacy laws like the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA) require businesses that operate on digital platforms to disclose their data handling practices on a privacy policy page. This fosters transparency and allows organizations to obtain user consent before collecting, processing, and utilizing their data for various purposes, such as sales and targeted advertising.
To comply with these regulations, most organizations began rolling out privacy policies using a method called “browsewrap.”
In a browsewrap approach, the privacy policy and other web agreements are typically accessible to users through links at the bottom of the webpage.
Users do not need to take any explicit action to indicate consent. Thus, by continuously engaging with an organization through its digital channels, it is IMPLIED that the user has consented to the privacy policy and other terms of engagement.
This, however, has proven to be unsuitable for the modern business ecosystem for several reasons:
- Implied consent means there's hardly any tangible way to prove that users read and agreed to the privacy policy.
- Browsewrap agreements are often placed at the bottom of web pages, where most users don’t bother to look.
“Where a website makes its terms of use available via a conspicuous hyperlink on every page of the website but otherwise provides no notice to users not prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on—without more—is insufficient to give rise to constructive notice.”
~United States Court of Appeals for the Ninth Circuit on Nguyen v. Barnes & Noble, Inc.
- When organizations update their privacy policies, there's no way to ensure that users read and consent to these changes for continued business relationships.
This creates room for ambiguity and disputes, reduces enforceability, and exposes organizations to legal penalties.
Also Read: Browserwrap vs Clickwrap Agreements—A Comparative Analysis
Benefits of using a clickwrap privacy policy
Unlike browsewrap, clickwrap privacy policy emphasizes “demonstrated consent.” While this may appear simple, it can benefit your firm in multiple ways, some of which we've discussed below.
#1 Increased transparency
Clickwrap privacy policies present terms upfront, requiring users to actively read and agree before moving forward with engagements. This eliminates the "hidden in fine print" issue associated with browsewrap agreements.
Users are fully informed about how their data is collected, used, and shared, fostering trust and preventing misunderstandings that could lead to complaints or disputes.
#2 Enhanced legal compliance
Strict privacy laws like GDPR and CCPA demand clear, demonstrable consent for data collection and use. Clickwrap makes it easy to achieve this, significantly minimizing the risk of fines or legal action due to non-compliance.
#3 Improved enforceability
In a dispute, the clickwrap agreement can provide indisputable evidence that the user actively agreed to the privacy policy. This strengthens your organization's position in legal proceedings, making it easier to enforce the terms stipulated in your policy.
Also Read: Is a Clickwrap Agreement Legally Enforceable?
#4 Competitive advantage
In an era where consumers are wary of data exposure, the transparency of clickwrap privacy policy can be a significant differentiator.
By being open about how your organization intends to handle user data and providing them with a level of control over their personal information, you can foster a sense of empowerment and respect, leading to enhanced customer satisfaction and loyalty.
#5 Proactive risk mitigation
Clickwrap's privacy policy reduces the chances of misunderstandings or misinterpretations about data use, minimizing privacy-related complaints, disputes, and potential data breaches.
Also read: Are Clickwrap and Browsewrap Agreements the Same?
Best practices for utilizing a clickwrap privacy policy
It is important to understand that clickwrap is not a magic pill for all your challenges with web agreements. To ensure you get the best results from it, you must implement it the right way. Here are some best practices to keep in mind.
#1 Tailor your privacy policy to the jurisdictions of your primary target markets
Privacy laws vary from jurisdiction to jurisdiction. Thus, it is crucial to customize your clickwrap privacy policy to reflect the unique requirements of the regions where you do business.
For example, if a significant portion of your users are EU citizens, you'll need to ensure your policy is fully compliant with the GDPR. If your main target market is in the US, your privacy policy must be compliant with the various US privacy laws applicable to your business.
#2 Never precheck your boxes
While prechecking your boxes is not illegal in places like the US, it undermines the essence of informed user consent. It implies that the user has already agreed to the privacy policy, even if they haven't had a chance to review it.
This can be controversial and may weaken your policy’s enforceability.
To guarantee genuine consent, always present users with an unchecked box that they must actively select to indicate their agreement.
#3 Incorporate good record-keeping practices
Maintaining good record-keeping practices is crucial to the enforceability of your clickwrap contracts. You want to be able to present clear evidence of user consent during legal proceedings. Additionally, your records will be required to demonstrate compliance during occasional regulatory filings.
Ensure your clickwrap privacy policy is connected to a robust contract repository. This should collect and store details like the user’s IP address, name, time and date of agreement, and version of the policy agreed to.
Also read: Tips to Store Your Contracts Effectively
#4 Utilize dedicated clickwrap platforms for enhanced efficiency
You could build your clickwrap privacy policy from scratch. But that would require a significant amount of time and effort.
Leveraging dedicated clickwrap platforms saves you hours of manual labor, masking all the complex technicalities for your team.
With SpotDraft Clickthrough, you get access to the nine yards of functionalities needed to build a fully-fledged clickwrap privacy policy. This includes templates for various web contracts, a robust contract repository with version control features, reporting tools, and other functionalities that combine to help you launch clickwrap contracts with just a few clicks.
Wrapping up
A clickwrap privacy policy has proven to be a sufficient replacement for its browsewrap counterpart, offering a more robust and compliant approach to obtaining consent.
That said, the success of your clickwrap contract hinges on your ability to understand its nuances and adhere to best practices for its development and implementation.
Ready to create your first clickwrap privacy policy? It’s super-easy on SpotDraft Clickthrough! Click here to book a personalized demo.
“I have seen a demo of SpotDraft’s CLM technology and they should be on your short list of vendors to talk to about a contract management system.”
~Sterling Miller, CEO and Senior Counsel Hilgers Graben PLLC
Ten Things: Cool Tech for In-House Counsel
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