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Cookies, Privacy, and the Law

by | Apr 10, 2024 | Business Law

In today’s digital age, numerous U.S. states and countries worldwide are enacting privacy laws emphasizing the importance of obtaining consent from website visitors or providing clear notice before collecting personal information. Due to the global reach of businesses and the challenge of tracking visitors’ origins, companies must proactively ensure compliance with diverse privacy regulations across jurisdictions to avoid facing substantial fines and penalties.

The legal framework surrounding cookies and online privacy is currently fragmented, with individual states crafting their own laws, as there is no direct federal regulation on cookies. However, a common trend is emerging – websites are increasingly required to seek user consent for non-essential cookies, with variations on when this consent is necessary depending on the jurisdiction and type of cookie involved. To cater to an international audience, websites must implement cookie consent mechanisms that adhere to the strictest regional laws, which aim to grant users transparency and control over their data.

Recently, Google made headlines by announcing its decision to limit cross-site tracking activities, likely influenced by the evolving landscape of privacy laws. This move is anticipated to trigger similar actions from other browsers. Cookies are essential tools for websites to track user behavior and interactions, even across multiple sites, raising concerns over the security of sensitive data. Consequently, regulators in a multitude of states and countries are enacting regulations governing the collection, storage, and usage of user information to safeguard data privacy.

Among the types of cookies, single-session cookies are temporary and aid in website navigation. In contrast, persistent/multi-session cookies remain on devices to gather data over time for analytical purposes. Privacy advocates are particularly wary of persistent cookies that monitor user actions post-website visit. Additionally, businesses must be mindful of sensitive data, such as identifying information or precise geolocation data, that often requires opt-in consent prior to collection to comply with current regulations.

Adopting different cookie banners – notice-only, opt-in, and opt-out – reflects various strategies for obtaining user consent for cookie usage on websites. As the legal landscape continues evolving, businesses must stay vigilant and ensure their online practices align with privacy laws to uphold user trust and maintain compliance in an ever-changing digital environment.

Best Practices

  • Separate cookies into categories (functionality, tracking, third-party) and allow users to make choices based on the category of cookie.
  • Obtain opt-in consent before placing cookies on a device, especially “optional” cookies or cookies not needed for essential website performance, and explain what each cookie does while asking for consent.
  • Remember a user’s cookie consent selections when a user returns or asks for consent if encountering what is perceived to be a new user. By remembering a user’s preferences when they return, not only are you assured that visitors to your website are comfortable with the cookies you are setting, but you also compile a record to show regulators should anyone inquire about your website and practices.

Compliance Checklist

  • Get consent before you set cookies other than purely functional ones.
  • Explain in plain language what every cookie does when asking for consent.
  • Keep a record of that consent.
  • Do not consent to the non-functionality cookies necessary for using the site.
  • Allow users to withdraw consent easily.

A company’s tolerance for risk, anticipated compliance obligations, and website functionality should all be considered when implementing a cookie consent mechanism as required by statute. If you are concerned about potential consequences, you should err on the side of caution and collect consent before setting cookies.

In the absence of federal legislation, more states will continue to enact their comprehensive privacy laws. The state laws could lead to a patchwork of inconsistent regulations, potentially prompting a strong push for federal regulation. Future laws will likely further emphasize consumer rights regarding data, including enhanced transparency, greater control over data collection and usage, and stricter requirements for obtaining user consent. Additionally, web browsers are taking the initiative and plan to stop supporting cross-site tracking this year, which will likely make compliance easier for controllers and website operators.

Businesses should review their privacy policies for compliance, provide mechanisms for consumers to exercise their rights granted by applicable privacy laws, and ensure the proper handling of personal data.

For more information of privacy law, contact Matt Mullins at 216-621-7860.

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