Don't Get Sued: 3 Cases in Website Privacy You Can Learn From

Jul 30, 2015 11:27:00 AM

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Companies who disclose their app or website privacy policy to customers through understandable terms are typically happy campers for two reasons: 1. Their customers are happy! 2. They aren’t getting sued. We’re going to cover 3 recent cases where 3 companies have either faced an adverse legal decision or some seriously bad press.

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Now, “don’t get sued” sounds like a simple rule to follow, but proves difficult for many companies to uphold because, the common denominator is that: their digital legal agreements are unenforceable.

These cases are easy to find: old and new.

Case 1: Updating website legal terms in a really non-transparent way

In 2005, Jim Schumacher LLC a reseller of GPS equipment, entered a resale agreement with a predecessor to GPS, Spireon. That agreement allowed Schumacher to sell non-Spireon products and prohibited Spireon from contacting Schumacher’s existing customers.

When that agreement changed in 2005, Spireon prohibited resellers from selling non-Spireon products, and permitted Spireon to directly contact customers of its resellers. Spireon presented the amended agreement on its website portal. Resellers could access the portal only after agreeing to the new terms.

Schumacher purposely never agreed to terms; he didn’t want Spireon to have his contacts, but they accessed them anyways saying that Schumacher checked “yes.”

He was not agreeing to new terms, Spireon got mad and sued. Guess who lost? Spireon. Guess why? Because they didn’t have evidence of the clickwrap agreement showing that Schumacher agreed.

If only PactSafe would have been around to keep track…

Case 2: Sharing data in an unexpected way without disclosing it

Oh, Google... just last week Android users that had purchased paid apps through the Android Market/Google Play Store over a 5-year period from 2009 to 2014, had alleged that Google knowingly disclosed to third parties the names, email addresses and location information belonging to each Android user that purchased a paid app through the Android Market. Users claimed that this sharing went directly against promises Google made in their privacy policy.

So, it looks like some people read privacy policies, which we are glad to hear, but this time, it didn’t even matter! The judge dismissed the complaint because there weren’t any evident incurred damages.

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Case 3: Being vague in tracking personal data

Even more recently, Uber has been under fire for adaptations to their privacy policy that involve location services. Your location. Under Uber’s current and future privacy policy, the company reserves the right to compile a complete travel history: every Uber trip you take, for an indefinite amount of time. So that late night McDonalds run, the emergency trip on vacation to get your less-than-attractive wart removed, and that Vegas trip...still out there! Of course this is a tad disturbing even to the point that it has even been under the investigation of the Electronic Privacy Information Center (EPIC).

Takeaway: Set clear customer expectations and share what you’re up to

All of the above examples involve companies being a little devious in how they update terms and use customer data. We live in a connected world where consumers aren’t willing to let things slide when their customer data is being used improperly. We live in a world where transparency is appreciated. Here are some great ways to improve your transparency in your customer relationships:

  1. Provide an easy to navigate, responsive legal center with summaries of your main provisions and how your versions change all inline.

  2. Send an email with the terms your customers have agreed to as soon as they agree to it.

  3. Notify your customers every time your legal terms change via email and when they login and let them know how the new terms are accepted.

All of that in one plus much, much more? That’s PactSafe. Request a demo today.

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Amber Ferrari

Written by Amber Ferrari