Privacy Policies and Partnerships in Conflict

Author:Mr Scott Kline
Profession:Hughes & Luce LLP

There is a problem brewing in the Internet. From small sites to the biggest portals, the name of the game these days is partnerships and joint ventures. Getting lost in this hub of activity, however, is a growing conflict between the joint venture agreements commonly entered into among these participants and the privacy policies which govern the use of their sites.

Almost all sites, especially content and retail sites, have adopted privacy policies to ensure that customer information will be kept confidential. In fact, the strength of the privacy policy has been used as an enticement by these sites to get customers and users to trust them, and therefore to turn over more information about themselves. Essentially, those Web companies understand that their customers will only share important personal and demographic information so long as they know it will not be widely distributed. Typically, most of these sites include a statement within the privacy policy such as the following: "We will not sell or rent your personally identifiable information to anyone," See Yahoo Privacy Policy. "We employ other companies and individuals to perform functions on our behalf...they have access to personal information used to perform their functions, but may not use it for other purposes," See Amazon Privacy Policy. "We do not share or sell information that identifies our guests personally or makes it possible for other parties to contact them directly..." See Privacy Policy. The basic tenet running through these statements is that a company will collect demographic and personal information but either will not share it with other entities (except subsidiaries) or, if it does share this information, will only share it in aggregate format, i.e., in a form where the individual users cannot be identified.

These types of privacy policies have given users the confidence to share personal information with Web sites and companies. However, over the last few months, there has been an increase in partnerships and joint ventures among Web based businesses, often with joint marketing agreements. In general, most of these agreements provide that there will be shared ownership of the information collected by the joint venturers or partners. While this...

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