4 Reasons Your App Needs a Privacy Policy

By David Oragui / 4 February 2019

Data privacy is increasingly important to consumers. If your business is developing a mobile app, there are some key things you need to know about adopting a privacy policy. This article will explore the reasons why you need a privacy policy and provide some insight into how to create an app privacy policy.

For anyone doing business in the digital space, it was uncomfortable to watch as Facebook CEO Mark Zuckerberg testified before the U.S. Senate about the Cambridge Analytica scandal. The normally affable Zuckerberg looked very flustered as he explained why data from 87 million Facebook users was inappropriately obtained through his platform’s apps.

Ever since news of the scandal broke, app users have been increasingly concerned about their privacy. What kind of information does an app collect? Is that data shared? If so – why is it shared and who is it shared with?

To alleviate consumers’ fears, and to meet the standards set by third-party distributors, many developers have had to develop an app privacy policy or risk losing users and downloads. 

This article will discuss the four reasons your app needs a privacy policy:

  • Adhering to the law
  • Staying above board with third-party distributors
  • Building trust with consumers
  • Making more money (and keeping it)

The article will also provide guidance for businesses that need to develop a clear, concise, and effective app privacy policies.

Privacy Policy Depends on the App

Before the Facebook scandal, there were only a handful of app developers who were concerned about spelling out the users’ right to data privacy. After all, what data could be extracted from a simple app download?

As we learned during Mr. Zuckerberg’s uncomfortable testimony, there is quite a lot of data that can be gleaned from even the most innocuous app usage. This data can range from generic (e.g., amount of screen time the user averages) to the very personal (e.g., identification or financial data).

Personal information image

Additionally, anonymous data can also be classified as “personally identifiable information” if the data is used in connection with another type of data that can result in identifying a user. 

For example, you may believe that your profile in an app allows you anonymity if you don’t use your real name. However, if the profile includes your your age, hometown, or other interests, someone can compare the profile information to another list that has similar information and reasonably deduce who you are.

If your app collects any type of personal or identifiable data, whether you intend to use that information in-house or share it externally, then you need to have an app privacy policy.

Keeping Up With Privacy Protection Laws

The most important reason for developing an app privacy policy is because many governments require it. 

Here are a few of the main countries that legally require an app privacy policy:

If you collect, store, or share personal data, then you need to understand that almost every state, country, and state-sponsored organization will require you to explain what you plan to do with that data.

Third-Party Distributors Now Require App Privacy Policies

Once Facebook demonstrated how a third-party platform could misuse consumer data, other third-party app platforms and distributors began taking steps to protect themselves from lawmakers and the courts.

Both Google and Apple require that app developers develop and display a privacy policy, even if the developer is not planning on collecting sensitive or personal data. 

Apple’s app privacy policy requirement is designed to protect the tech giant from any litigation. That way, an iOS app developer that shares data will be held accountable by the terms of its own privacy policy.

Google, on the other hand, wants the app privacy policy to help users understand what data the app developer collects, why the developer collects it, and what the developer is going to do with it. 

This is especially important for a company that will use a third-party service to collect data or display ads using the Google Analytics or AdWords tools.

AdWords Privacy Policy copy

The privacy policy for AdWords must also include instructions for consumers to opt out of remarketing activities.

Keep the App Users Happy Through Trust

Facebook lost a lot of consumer confidence after the data scandal. Usage didn’t necessarily decrease, but the types of information changed drastically as people scurried to regain what little privacy remained.

In fact, much of the social media platform’s post-scandal marketing efforts centered on regaining consumer trust with the promise not to share data. Instead of following Facebook’s reactive crisis management approach, companies should take more proactive steps to maintain users’ trust.

When a user sees that an app has a privacy policy, there is a subconscious belief that the user can trust the company/developer. Regardless of what the fine print of the policy says, the sheer notion that such a policy exists can increase the level of trust between an online business and its app users.

Also, an app privacy policy can effectively provide peace of mind to app users and potential users. The policy will need to explain in plain language what the app developer plans to do with personally identifiable information. 

Example of app privacy policy

This can make a user or potential downloader feel comfortable, use the app more frequently, and even recommend the app to others.

Privacy Policies Can Help You Make, and Keep, More Money

Numerous studies (like this and this) have shown that a company being honest and upfront with consumers by providing an app privacy policy can better persuade those consumers to follow the desired call to action. In fact, a privacy policy has even proven effective in getting people to fill out surveys, complete online forms, or sign up for emails. 

To that end, a clear and concise app privacy policy can drive consumers to the point of purchase.

Also, the app privacy policy can pay dividends by ensuring your app continues to be available for download rather than suspended (or worse). Google Play and the Apple App Store now require developers to have privacy policies linked to their apps before they are approved, and any updates to the app need to be accompanied by a revised privacy policy. 

Along with making money, an app privacy policy can help a company protect its bank account in several ways. For one, a company without a comprehensive privacy policy runs the risk of being sued by a consumer or group of consumers. For example, Delta Airlines, Snapchat, and Google are prime examples of large companies that faced lawsuits over questionable privacy policies. 

In today’s litigious society, one lawsuit can lead to many others, exponentially increasing the amount a company will pay in legal fees and settlement costs.

Finally, significant fines from government agencies can be another consequence of not having a clear app privacy policy. As mentioned earlier, the FTC acts as the consumer watchdog for developers that don’t display an active privacy policy. In 2013, the social app Path agreed to pay an $800,000 fine to the FTC for privacy violations – an example of the hefty cost of neglecting a thorough and honest mobile app privacy policy.

Help Is Available for App Developers

The components of the app privacy policy will differ depending on the type of app and the type of company, as well as the types of consumers (i.e., minors, students) the app specifically targets.

This is why many developers may find it useful to use an independent privacy policy generation service. 

Here are a few popular privacy policy generation platforms:

  • PrivacyPolicies.com: This site ranks high on Google for privacy policy generators. The service requires a nominal one-off fee for businesses, but is free for personal use.
  • TermsFeed: This platform lets a business create premium custom legal agreements based on specific criteria, such as if the app will collect email address, use geolocation, or sell products and/or services.
  • FreePrivacyPolicy.com: This site gives developers an easy way to generate an app privacy policy by filling in blanks and copying/pasting code into the app.
  • Trust Guard: This company provides both a privacy policy and a trust seal that lets users know that an app is secure and safe.

Privacy policy generation services can help a developer navigate through the legal language and state/federal statutes to create a clear app privacy policy.

Learn how to rank your app in Apple's App Store versus Google Play.

The Most Important Part of An App

An app developer needs to have a privacy policy if the app collects any form of personal information, from names to addresses to financial information. 

A clear privacy policy will explain to app users what happens to the personal information they give to the company. Without this important verbiage, a developer could be violating the law, which could incur hefty financial and reputational penalties. 

There are a number of third-party services that can assist a developer in producing an app privacy policy, since there are numerous elements the developer is obliged to disclose and differing governmental statutes that may apply.

For those reasons, the privacy policy may be the most important part of a mobile app. Without it, the damage caused by consumers, government agencies, and litigious parties may be too much for a developer to bear. 

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