Get Sued By Competitors for Lying On Your Privacy Policy

Many sites put up privacy policies without giving them much thought. Once up, they are often forgotten about even if the policy is later changed. This can lead to disaster as one recent case showed.

You probably are not surprised to learn that lying in your privacy policy can get you into trouble. You will definitely be surprised to learn, however, that your competitors could be the parties suing you. Even worse, they could sue you for millions and win! How could this be? It all boils down to competition. In this case, claims of unfair competition.

The Lanham Act is a federal law that established rules related to unfair competition. Part of the language of the Act prohibits businesses from using false statements that a consumer may use in deciding to use the business instead of a competitor. This can include your privacy policy. If you state in your privacy policy that you do not share visitor information with third parties, but then do so, you are making the false statement called for in the Lanham Act.

For this to get you in trouble, however, the false statement must give you an advantage over competitors, to wit, your competitors admit they give visitor information to others. Making the determination in court is a question of fact, which means a jury will decide. Regardless, it is a risky proposition.

Getting rid of the technical legal jargon, the use of the Lanham Act in relation to privacy policies on sites is all about privacy. Between phishing, email and other online scams, many people are nervous about providing their personal information to sites. Along with this heightened public awareness comes a new unique selling position for sites - assuring privacy! Simply put, more people are likely to use a site that does not share their information with third parties than one that admits it does. If false assurances are given, the advantage is gained without merit, which is where a claim under the Lanham Act comes in.

Ultimately, you need to have a privacy policy on your site. Make sure it is accurate and updated as required so that you do not run into a situation where a competitor actually sues you.


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