Privacy Policies and Terms of Use: A Plain-English Guide for Website and App Owners

Most people have clicked “I agree” on a website or app without reading every word. That is normal. Privacy policies and terms of use are often long, formal, and full of legal language. But if you run a business online, these documents matter. They tell visitors what you do with their information, what rules apply when they use your site or service, and what expectations exist between you and your customers.

Before going further, an important disclaimer: we are not lawyers, and this article is not legal advice. It is general information and opinion intended to help non-technical, non-legal readers understand the basic issues. Laws vary by country, state, industry, audience, data type, and business model. You should work with qualified legal counsel to make sure your privacy policy, terms of use, cookie notices, consent flows, and related business policies are appropriate for your specific business.

Privacy Policy vs. Terms of Use: What Is the Difference?

A privacy policy explains how a business collects, uses, stores, shares, sells, protects, and deletes personal information. In everyday language, it answers questions like: What information do you collect from me? Why do you collect it? Do you share it with advertisers, service providers, payment processors, analytics tools, or other companies? How long do you keep it? What choices do I have? How can I contact you? If privacy laws apply, the policy may also need to explain rights such as access, deletion, correction, opt-out, portability, withdrawal of consent, or limits on use of sensitive information.

A terms of use document, sometimes called “terms and conditions,” “terms of service,” or “user agreement,” is different. It explains the rules for using the website, app, product, or service. It may cover account rules, acceptable use, payments, subscriptions, refunds, intellectual property, user content, prohibited conduct, disclaimers, limits on liability, dispute resolution, governing law, termination, and what happens if the terms change. If the privacy policy is mainly about personal information, the terms of use are mainly about the relationship between the business and the user.

A simple way to remember the difference is this: a privacy policy says, “Here is what we do with your information,” while terms of use say, “Here are the rules for using our service.”

Should They Be One Combined Document or Separate Documents?

For most businesses, privacy policy and terms of use documents should be separate. They serve different purposes, are read by different people for different reasons, and may be governed by different legal requirements. A privacy policy may be legally required for many websites and apps that collect personal information, especially if they serve users in places such as California, the European Union, the United Kingdom, or other jurisdictions with privacy laws. Terms of use are often not universally required just because a website exists, but they are highly recommended because they help set contractual rules and reduce misunderstandings.

Separate documents are usually clearer for consumers. A person who wants to know how their data is handled can go directly to the privacy policy. A person who wants to understand subscription cancellation, refund rules, account termination, or acceptable use can go directly to the terms. Separate documents are also easier to update. Privacy law changes frequently, and your data practices may change more often than your account rules. Keeping the documents separate makes it easier to revise one without rewriting the other.

That said, a combined document can work for a very simple business, especially if it collects little or no personal information and provides only basic informational content. But even then, clarity matters. If the documents are combined, the privacy section should be clearly labeled and easy to find. In our opinion, most businesses are better served by separate documents that link to each other.

Required Elements of a Privacy Policy

There is no single privacy policy law that applies to every business everywhere. Instead, requirements depend on where your users are located, where your business operates, what kind of information you collect, whether you sell or share data, whether you target children, whether you operate in regulated industries such as health or finance, and whether you use cookies, analytics, advertising, or automated decision-making. The following discussion is not a complete legal checklist. It is a practical overview of common requirements and recommendations.

Privacy Policy Quick-Steps

Depending on the laws that apply to your business, the required elements of a privacy policy or privacy notice may include:

• Identify the categories of personal information or personally identifiable information you collect.
• Identify the purposes for collecting, using, or processing each category of personal information.
• Identify the categories of third parties, service providers, contractors, or other recipients with whom you share, sell, disclose, or transfer personal information.
• State whether personal information is sold or shared, if laws such as the CCPA/CPRA apply.
• If sensitive personal information is collected, identify the categories collected, the purposes for collection or use, and whether it is sold or shared.
• Provide notice at or before the point of collection when required, including the categories of information collected, purposes of use, sale or sharing status, and retention period or retention criteria.
• Explain how long you keep each category of personal information, or explain the criteria used to determine the retention period.
• Describe any process users have to review, access, correct, or request changes to their personal information, if your business provides or is legally required to provide that process.
• Describe how users are notified of material changes to the privacy policy.
• Identify the effective date of the privacy policy.
• Disclose how the business responds to browser “Do Not Track” signals or similar opt-out mechanisms, if applicable.
• Disclose whether third parties may collect information about users’ online activities over time and across different websites or services.
• If GDPR applies, identify the controller, contact details, data protection officer contact where applicable, legal basis for processing, recipients, international transfers, data subject rights, complaint rights, consent-withdrawal rights, and automated decision-making or profiling where applicable.
• If personal data is obtained from somewhere other than the individual, disclose the categories of data collected and the source of the data where required by GDPR Article 14.
• If relying on consent, make consent clear, demonstrable, withdrawable, and as easy to withdraw as to give where GDPR-style consent rules apply.
• If the service is directed to children under 13 or knowingly collects information from children under 13, provide COPPA-required notices, obtain verifiable parental consent when required, explain parental review/deletion rights, and address children’s data security and retention.
• If cookies or similar tracking technologies are used, disclose essential and non-essential cookies and obtain consent for non-essential cookies where required.
• Accurately describe your real privacy and security practices so the policy does not become deceptive or misleading under consumer protection laws such as FTC Act Section 5.

Privacy Policy Elements That May Be Legally Required

If your commercial website or online service collects personally identifiable information from California residents, the California Online Privacy Protection Act, often called CalOPPA, may apply. California Business and Professions Code section 22575 requires covered operators to conspicuously post a privacy policy. The policy must identify the categories of personally identifiable information collected and the categories of third parties with whom that information may be shared. It must describe any process the operator maintains for users to review and request changes to their information. It must describe how users are notified of material changes to the policy. It must identify the policy’s effective date. If the operator tracks users over time and across third-party websites or online services, the policy must disclose how the operator responds to browser “Do Not Track” signals or similar mechanisms, and must disclose whether other parties may collect personally identifiable information about users’ online activities over time and across different websites when they use the operator’s site or service.

If the California Consumer Privacy Act as amended by the California Privacy Rights Act, commonly referred to as the CCPA or CPRA, applies to your business, California Civil Code section 1798.100 requires notice at or before the point of collection. Covered businesses must inform consumers of the categories of personal information collected, the purposes for which those categories are collected or used, and whether the information is sold or shared. If sensitive personal information is collected, the business must disclose the categories collected, the purposes of collection or use, and whether that sensitive information is sold or shared. The law also requires disclosure of the length of time each category of personal information is intended to be retained, or the criteria used to determine the retention period if a specific period cannot be stated. The business may not collect additional categories or use information for incompatible additional purposes without providing appropriate notice. Section 1798.100 also requires collection, use, retention, and sharing to be reasonably necessary and proportionate to the disclosed purposes, and requires reasonable security procedures and practices appropriate to the nature of the personal information.

If the General Data Protection Regulation, or GDPR, applies because you process personal data of people in the European Union or otherwise fall within its scope, Articles 13 and 14 require extensive transparency disclosures. Article 13 applies when personal data is collected directly from the person. It requires, among other things, the identity and contact details of the controller, contact details of the data protection officer where applicable, the purposes and legal basis for processing, legitimate interests where relied upon, recipients or categories of recipients, international transfer information where applicable, retention periods or criteria, data subject rights, the right to withdraw consent where processing is based on consent, the right to complain to a supervisory authority, whether providing data is required, and information about automated decision-making including profiling where applicable. Article 14 covers situations where personal data was not obtained directly from the person and requires similar information, plus the categories of personal data and the source of the data. GDPR Article 6 also matters because it requires a lawful basis for processing personal data, such as consent, contract necessity, legal obligation, vital interests, public interest, or legitimate interests. GDPR Article 7 sets rules for consent, including that the controller must be able to demonstrate consent, consent requests must be clearly distinguishable and written in clear and plain language, and withdrawing consent must be as easy as giving it.

If your website or app is directed to children under 13, or you have actual knowledge that you are collecting personal information from a child under 13, the Children’s Online Privacy Protection Act Rule, known as COPPA, may apply. The COPPA Rule is found in 16 C.F.R. Part 312. Section 312.3 generally requires covered operators to provide notice of what information they collect from children, how they use it, and their disclosure practices; obtain verifiable parental consent before collecting, using, or disclosing children’s personal information; provide parents a reasonable means to review and delete information and refuse further use or collection; avoid conditioning participation on collecting more information than reasonably necessary; and maintain reasonable procedures to protect confidentiality, security, and integrity. Section 312.4 contains detailed notice requirements, including a prominent online notice and direct notice to parents in many situations. Sections 312.5, 312.6, 312.8, and 312.10 address parental consent, parental review rights, security, and retention/deletion requirements.

If you make privacy promises to users, the Federal Trade Commission Act also matters. Section 5 of the FTC Act, 15 U.S.C. section 45, declares unfair or deceptive acts or practices unlawful. In practical terms, a privacy policy should accurately describe what the business actually does. If a business says it does not share information but does share it, or says it uses strong security while ignoring basic safeguards, regulators may view those statements as deceptive or unfair depending on the facts. Even when a specific privacy-policy statute does not apply, inaccurate privacy statements can create legal risk.

Cookie and tracking disclosures may also be legally required depending on where users are located and what tracking technologies are used. In the European Union, Article 5(3) of the ePrivacy Directive generally requires clear and comprehensive information and consent before storing information on or accessing information from a user’s device, except for technical storage or access that is strictly necessary to transmit a communication or provide a service explicitly requested by the user. This is why many sites show cookie banners for analytics, advertising, and similar tracking.

Privacy Policy Elements That Are Recommended Even When Not Clearly Required

Even when a particular law does not force you to include every item, a useful privacy policy should be understandable and complete. It should explain what personal information you collect, such as name, email address, phone number, account information, payment-related information, device identifiers, IP address, location information, usage data, communications, and any information the user submits. It should explain how you collect that information, including forms, account registration, checkout pages, cookies, analytics tools, advertising pixels, customer support messages, social media integrations, and third-party services.

It should explain why you collect the information. Common purposes include providing the service, creating accounts, processing payments, sending transactional messages, responding to support requests, improving the site, measuring performance, preventing fraud, complying with law, marketing, personalization, and advertising. It should explain who receives information, such as hosting providers, payment processors, email vendors, analytics companies, advertising partners, professional advisers, affiliates, business transaction parties, or government authorities when legally required.

A good policy should also describe security in realistic terms. It is usually risky to promise perfect security because no system is perfect. A better plain-English approach is to say that the business uses reasonable administrative, technical, and physical safeguards appropriate to the nature of the information, while acknowledging that no internet transmission or storage system can be guaranteed completely secure.

It is also wise to include contact information, an effective date, how updates will be handled, whether the service is intended for children, how users can exercise privacy choices, and whether data may be transferred across borders. If you use third-party tools, your policy should not simply say “we do not share information” if those tools receive user data. The best privacy policy is not the longest one; it is the one that accurately and clearly describes reality.

Cookies: Essential vs. Non-Essential

Cookies are small pieces of data stored on a user’s device by a website or related service. They can help a site remember that a user is logged in, keep items in a shopping cart, remember language preferences, measure traffic, personalize content, or show targeted ads. Similar technologies include pixels, tags, local storage, SDKs, and device identifiers.

Essential cookies are cookies or similar technologies needed for the website or app to work properly or to provide a service the user requested. Examples include cookies that keep a user logged in during a session, protect against fraud, remember items in a shopping cart, process checkout, maintain security, balance network traffic, or remember a privacy choice. These are sometimes called “strictly necessary” cookies. Under many cookie-consent frameworks, essential cookies can often be used without opt-in consent because the site cannot provide the requested service without them, though they should still be disclosed.

Non-essential cookies are not strictly required for the basic service. Examples often include analytics cookies, advertising cookies, social media tracking pixels, affiliate tracking, personalization cookies, cross-site tracking technologies, and cookies that build user profiles for marketing. These cookies can be valuable for a business, but they are more privacy-sensitive because they may track behavior over time, across pages, or across different websites. In places governed by EU-style cookie rules, non-essential cookies usually require consent before they are placed or accessed. Under GDPR Article 7, if consent is used, it should be clear, demonstrable, and as easy to withdraw as to give.

For a plain-English business approach, do not treat all cookies the same. Identify what cookies or tracking technologies you actually use. Separate essential from non-essential. Explain what each category does. If required, obtain consent before using non-essential cookies. Provide a way to change cookie preferences later. And make sure the website’s actual behavior matches the cookie notice.

Different Laws That Could Impact Your Policy

Privacy and website terms are affected by a patchwork of laws. A small business might be subject to one set of rules, while a larger business, a children’s app, a healthcare service, an online marketplace, or a subscription business might face additional obligations.

CalOPPA may affect commercial websites or online services that collect personally identifiable information from California residents. CCPA/CPRA may affect covered businesses that meet statutory thresholds and process personal information of California consumers. The GDPR may affect businesses that process personal data of people in the European Union, especially if offering goods or services to them or monitoring their behavior. The ePrivacy Directive may affect cookie consent and device-access rules in the EU. COPPA may affect sites and apps directed to children under 13 or those with actual knowledge that they collect personal information from children under 13.

The FTC Act affects privacy and consumer protection because it prohibits unfair or deceptive acts or practices. This matters whenever a business makes promises about privacy, security, pricing, subscriptions, endorsements, cancellation, or other consumer-facing claims. If the business uses recurring billing, free trials that convert to paid plans, automatic renewal, or other negative-option features online, the Restore Online Shoppers’ Confidence Act, including 15 U.S.C. section 8403, may require clear and conspicuous disclosure of all material terms before obtaining billing information, express informed consent before charging, and a simple mechanism to stop recurring charges.

If users can upload or post content, copyright law can affect the terms of use. The Digital Millennium Copyright Act safe harbor provisions in 17 U.S.C. section 512 may be relevant for online service providers that host user content. Section 512 includes notice-and-takedown procedures, designated agent requirements, and repeat-infringer policy requirements for certain safe harbor protections. Not every business qualifies, and the details are technical, so legal counsel is important.

If your terms include arbitration, the Federal Arbitration Act may matter. 9 U.S.C. section 2 generally provides that written arbitration provisions in contracts involving commerce are valid, irrevocable, and enforceable, subject to generally applicable contract defenses and other statutory limits. Arbitration clauses, class-action waivers, venue clauses, and dispute-resolution provisions can be heavily scrutinized, so these should not be copied casually.

Other laws may apply depending on the business. Healthcare businesses may need to consider HIPAA. Financial services may need to consider the Gramm-Leach-Bliley Act and related rules. Educational products may need to consider FERPA or state student privacy laws. Email and text marketing may involve CAN-SPAM, the Telephone Consumer Protection Act, and state laws. Data breach notification laws exist in many states and countries. Modern U.S. state privacy laws beyond California may also apply depending on location, volume of data, revenue, and data practices. This is one reason a generic template should be treated as a starting point, not a finished legal solution.

Terms of Use Document

Unlike privacy policies, there is generally no single law that says every website must have a terms of use document with a fixed list of clauses. Many terms-of-use clauses are not “legally required” in the same way that some privacy disclosures are. They are recommended because they help create a contract, set expectations, protect intellectual property, explain payment rules, reduce abuse, and manage risk. However, certain laws can make specific terms or disclosures legally important depending on what the business does.

Terms of Use Elements That May Be Legally Required or Legally Important

If you sell subscriptions, automatic renewals, free trials that become paid plans, or other negative-option offers online, 15 U.S.C. section 8403 is directly relevant. It says a person may not charge or attempt to charge a consumer for goods or services sold online through a negative-option feature unless the person clearly and conspicuously discloses all material transaction terms before obtaining billing information, obtains the consumer’s express informed consent before charging the consumer’s account, and provides simple mechanisms for the consumer to stop recurring charges. These disclosures do not always have to live only in the terms of use; in fact, they should usually appear clearly in the checkout or signup flow. But the terms should match those disclosures and explain billing, renewal, cancellation, and refund practices accurately.

If your service hosts user-generated content, a copyright policy may be legally important. Under 17 U.S.C. section 512, certain online service providers can qualify for limitations on copyright liability if they meet statutory conditions. For content stored at the direction of users, section 512(c) includes conditions such as responding expeditiously to proper takedown notices and designating an agent to receive infringement notices. Section 512(i) requires adoption, reasonable implementation, and communication to subscribers and account holders of a repeat-infringer termination policy. For businesses that rely on DMCA safe harbor protection, the terms of use often include a DMCA notice procedure, counter-notice procedure, and repeat-infringer policy.

If your terms include arbitration, 9 U.S.C. section 2 is relevant because it generally makes written arbitration agreements in contracts involving commerce enforceable, subject to generally applicable contract defenses and statutory exceptions. This does not mean every business must include arbitration. It also does not mean every arbitration clause will be enforced. The clause must be properly drafted, fairly presented, and appropriate for the business. Some claims and contexts have special rules. But if arbitration is included, it should be written carefully and conspicuously.

If your site makes consumer-facing claims about pricing, guarantees, refunds, cancellations, product performance, privacy, security, or service availability, the FTC Act’s prohibition on unfair or deceptive acts or practices matters. Your terms should not contradict your ads, checkout pages, refund pages, privacy policy, or actual practices. For example, a hidden “no refunds ever” clause may not fix a misleading sales page that promised easy cancellation or a money-back guarantee.

If your users are minors, live in particular states, buy regulated products, or access age-restricted content, age eligibility and compliance language may be legally important. If you operate in a regulated industry, required terms may come from industry-specific laws or licensing rules. For example, financial, healthcare, professional advice, education, alcohol, tobacco, cannabis, gambling, and children’s products can each raise special issues.

Terms of Use Elements That Are Recommended

Most businesses should consider including an introduction that identifies the company, the website, app, or service covered, and the date the terms became effective. The terms should explain that using the service means the user agrees to the terms, but the business should also think carefully about how agreement is obtained. Courts often look at whether users had reasonable notice and took an action showing agreement. A checkbox or clear button near a link to the terms is usually stronger than simply burying a link in a footer.

The terms should include account rules if users can create accounts. These rules may cover accurate information, password security, responsibility for account activity, age requirements, and the company’s right to suspend or terminate accounts for violations. If users can post content, the terms should explain what content is prohibited, what rights the user keeps, what license the user gives the business to host or display the content, and when content may be removed.

Acceptable-use rules are also important. These may prohibit illegal activity, harassment, spam, scraping, hacking, reverse engineering, malware, impersonation, infringement, abuse of support channels, and attempts to interfere with the service. A clear acceptable-use section helps users understand boundaries and gives the business a basis for moderation or termination.

Payment terms should describe prices, taxes, billing, renewals, cancellations, refunds, chargebacks, trials, promotional offers, and what happens if payment fails. These should match the checkout page and marketing claims. If refunds are discretionary, limited, or unavailable after a certain point, say so clearly. If subscriptions renew automatically, say so clearly before purchase and provide an easy cancellation path.

Intellectual property language should explain that the business owns or licenses the website, app, software, designs, trademarks, logos, content, and other materials, except for user content or third-party content. It should explain what users may and may not do with those materials. If you provide downloadable software or digital content, license restrictions may be especially important.

Disclaimers and limitation-of-liability clauses are common, but they should be drafted by counsel because enforceability varies. A typical disclaimer says the service is provided “as is” and “as available,” without promising uninterrupted or error-free operation. A limitation of liability may try to limit damages or exclude certain categories of damages. These clauses are not magic shields. Some liabilities cannot be waived, and consumer protection laws may restrict them. Still, they are common risk-management tools.

The terms should also explain termination, changes to the service, changes to the terms, governing law, venue, dispute resolution, contact information, and how the terms relate to other policies such as the privacy policy, cookie policy, community guidelines, or acceptable use policy. The best terms are not just copied from another site; they are aligned with the business model, user experience, and actual practices.

Policy and Terms Generators

Online generators can be useful starting points, especially for small businesses that need to understand the common questions a policy or terms document should answer. They are not a substitute for legal advice. A generator can only produce good output if the business provides accurate input, and it may not understand your full legal risk, industry, data flows, contracts, or state-specific obligations.

Examples of sites that offer privacy policy and/or terms of use generators include TermsFeed, FreePrivacyPolicy.com, PrivacyPolicies.com, Termly, TermsAndConditionsGenerator.com, PrivacyPolicyGenerator.info, and the App Privacy Policy Generator. Some of these services offer free basic documents and paid upgrades for more complex features such as GDPR, CCPA/CPRA, cookie consent, automatic updates, or attorney-reviewed language. If you use a generator, read the result carefully, make sure it matches what your business actually does, and have counsel review it if the policy or terms will be important to your operations.

Practical Final Thoughts

For a non-lawyer business owner, the most important idea is accuracy. Do not promise privacy practices you do not follow. Do not hide important payment terms. Do not copy a competitor’s policy and assume it fits your business. Do not use analytics, advertising pixels, email tools, payment processors, customer support widgets, or user-upload features without understanding what information they collect and where that information goes.

Start by mapping your reality. What information do you collect? From whom? Why? Where is it stored? Who receives it? How long do you keep it? Do you sell, share, or use it for targeted advertising? Do children use your service? Do you use cookies? Do you offer subscriptions? Do users upload content? Do you operate in regulated industries or serve people in states or countries with privacy laws? Once those questions are answered, a privacy policy and terms of use become much easier to write.

Privacy policies and terms of use are not just paperwork. They are public promises. They are also part of the trust relationship between a business and its users. Clear, honest, plain-English documents can reduce confusion, improve user confidence, and help the business stay aligned with legal and ethical expectations. But because the legal landscape is complex and changes over time, the safest next step is to use this article as background education and then work with legal counsel to build documents that fit your actual business.

References and Research Sources

California Business and Professions Code section 22575, California Online Privacy Protection Act privacy policy requirements: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=22575&lawCode=BPC

California Civil Code section 1798.100, California Consumer Privacy Act general duties and notice at collection: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1798.100&lawCode=CIV

California Attorney General CCPA information and FAQ: https://oag.ca.gov/privacy/ccpa

Children’s Online Privacy Protection Rule, 16 C.F.R. Part 312: https://www.ecfr.gov/current/title-16/chapter-I/subchapter-C/part-312

FTC COPPA compliance FAQ: https://www.ftc.gov/business-guidance/resources/complying-coppa-frequently-asked-questions

GDPR Article 6, lawfulness of processing: https://gdpr-info.eu/art-6-gdpr/

GDPR Article 7, conditions for consent: https://gdpr-info.eu/art-7-gdpr/

GDPR Article 13, information to be provided where personal data are collected from the data subject: https://gdpr-info.eu/art-13-gdpr/

GDPR Article 14, information to be provided where personal data have not been obtained from the data subject: https://gdpr-info.eu/art-14-gdpr/

EU ePrivacy Directive consolidated text, including Article 5(3) cookie/device-access rule: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02002L0058-20091219

Federal Trade Commission Act section 5, 15 U.S.C. section 45: https://www.law.cornell.edu/uscode/text/15/45

Restore Online Shoppers’ Confidence Act negative-option marketing provision, 15 U.S.C. section 8403: https://www.law.cornell.edu/uscode/text/15/8403

Digital Millennium Copyright Act safe harbor provision, 17 U.S.C. section 512: https://www.law.cornell.edu/uscode/text/17/512

Federal Arbitration Act, 9 U.S.C. section 2: https://www.law.cornell.edu/uscode/text/9/2

FreePrivacyPolicy.com article on essential cookies: https://www.freeprivacypolicy.com/blog/essential-cookies

FreePrivacyPolicy.com blog: https://www.freeprivacypolicy.com/blog/

LegalClarity article, “What Is a Privacy Policy? Examples and Requirements”: https://legalclarity.org/what-is-a-privacy-policy-examples-and-requirements/

TermsFeed privacy policy generator: https://www.termsfeed.com/privacy-policy-generator

TermsFeed terms and conditions generator: https://www.termsfeed.com/terms-conditions-generator

FreePrivacyPolicy.com privacy policy generator: https://www.freeprivacypolicy.com/free-privacy-policy-generator

FreePrivacyPolicy.com terms and conditions generator: https://www.freeprivacypolicy.com/free-terms-and-conditions-generator

PrivacyPolicies.com: https://www.privacypolicies.com

Termly privacy policy generator: https://termly.io/products/privacy-policy-generator

Termly terms and conditions generator: https://termly.io/products/terms-and-conditions-generator

TermsAndConditionsGenerator.com: https://www.termsandconditionsgenerator.com

PrivacyPolicyGenerator.info: https://www.privacypolicygenerator.info

App Privacy Policy Generator: https://app-privacy-policy-generator.firebaseapp.com