Cookie Policies: Baking Data Collection Into Your Website
Utilized by over 40% of all websites, cookies are the unsung heroes of the digital world, quietly working behind the scenes to enhance both user experience and business functionality. For users, cookies save preferences and streamline interactions, while businesses leverage this data to better understand their audience and improve their services.
But how do these important data trackers affect businesses and their customers? We’ll explore that here and now!
What is a “cookie?”
Cookies are small files issued by apps or websites to users’ devices that track useful data like usage patterns, preferences and more. Issued by the website and stored on your device, cookies are sent back to their respective website upon revisiting to create a more personalized experience.
Cookies serve various purposes, including authentication, personalization, data analysis and user tracking.
For example, let’s say you visited your favorite retail site. The last time you were there, you’d done some healthy browsing and saved a few items in your cart…you know, just in case. Maybe you created an account and login for that sweet 10% off “New Member” deal. Thanks to cookies, you’ll be set up to complete your purchase with your username and password saved and those important items waiting in your cart.
Cookies can be categorized based on duration, provenance and purpose:
- Duration: How long do they stay on a user’s device?
- Provenance: Are they issued by a first- and third-party?
- Purpose: Are they essential (critical for website functionality) or non-essential (used for data collection and non-critical functions)?
Are cookies ethical?
When used properly, all parties can benefit from cookie data collection. Like any tool, the ethical responsibility lies with the implementor.
“But surely not all businesses are playing by the books,” you may be thinking. And you’re probably right, but that’s nothing to fret. There are laws in place to protect web users. Most…? Let us explain.
User Privacy Laws and Cookie Policies
While the U.S. has no federal law mandating cookie policies, other states may have their own regulations, and it’s good practice to comply with the strictest to cover a wide audience.
For example, California and the EU have implemented stringent regulations for online data collection. These include…
- California Consumer Privacy Act (CCPA): Enforced in California, the CCPA grants residents the right to know what personal information is collected about them, the right to delete that information and the right to opt out of the sale of their data. Failure to comply with the CCPA can result in fines of up to $7,500 per violation.
- General Data Protection Regulation (GDPR): Across the pond, the GDPR is a robust framework emphasizing transparency, user consent and the safeguarding of personal data for EU residents. Non-compliance with the GDPR can result in fines of up to €20 million (nearly $22 million) or 4% of the global annual revenue—whichever is higher.
While not a standalone regulation, the proposed ePrivacy Regulation complements the GDPR by focusing on electronic communications data. It addresses issues such as cookies, requiring explicit user consent for their use.
In 2023, there are 137 countries with their own independent data privacy laws and several other U.S. states, including Virginia, Colorado, Utah and Connecticut.
“But I don’t serve clients in these states!” Well…maybe not…but they may visit your website, and the consequences of sidestepping compliance are not worth the risk. Beyond financial penalties, businesses can face reputational damage and loss of public trust.
Which brings us back to our grand thesis…
As a business, open and honest (non-essential) cookie implementation builds transparency with your customers and protects your brand. Cookie policies – legal documents informing your site visitors of on-site data collection – help you create this transparency.
This information goes hand-in-hand with privacy policies, though they serve different purposes. While privacy policies disclose data collection and usage practices, cookie policies address the following:
- The list of potential cookies used
- Why and how cookies are used
- Information on opting out of cookie use
- Contact information for questions or concerns
In a nutshell, cookie policies shield businesses against potential fines and legal repercussions. They demonstrate a commitment to transparency and compliance with the law.
They are also the right thing to do! After all, wouldn’t you want to know if, how and why your information is being collected? The general public would agree, with 81% of Americans sharing concerns about how their data is being used (though 43% of Americans are willing to accept cookies).
And a note on evolving laws…
Let’s bake the perfect website!
From ADA to cookie compliance, TRIO’s marketing specialists are ready to help you create a web experience for all. With more than 20 years of creative excellence, our full-service agency can help your brand shine. Contact us to learn more about our marketing, event and web solutions.
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