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The Federal Trade Commission has taken the position that a company’s use of user data collected pursuant to a valid privacy policy must be in accordance with the limitations of that policy. See, e.g., In re Microsoft Corp., File No. 012 3240 (F.T.C. Aug. 8, 2002). Accordingly, a company that changes its privacy policy, or shares user data collected pursuant to a privacy policy with another company, should try to ensure that the data is used in accordance with the provision of the policy pursuant to which it was collected. The following clause addresses a situation in which ABC Co. and XYZ Co., each the operator of an existing Web site that collected data under separate privacy policies, enter into an agreement for the operation of a third, co-branded Web site. The clause provides that user data collected on the co-branded web site shall be used in accordance with the privacy policy of the co-branded Web site. The clause also provides that previously collected user data gathered on the existing Web sites may be used only in accordance with the privacy policy under which it was collected. PRIVACY POLICY (a) The Co-Branded Site shall include a clearly designated and prominently placed link to a privacy policy mutually agreed to by the parties (as the same may be modified, supplemented or amended by the parties from time to time) (the “Privacy Policy”), which shall be located at such URL as shall be designated by the parties from time to time. (b) Collection and use of any and all User Data generated from the Co-Branded Site by ABC or XYZ, including, without limitation, any and all Registration Data (collectively, together with the Registration Data, the “User Data”), shall be used in accordance with the Privacy Policy and any applicable laws, regulations and industry standards; provided, however, that (i) if any data included in the User Data were first collected on the XYZ Site, such data may only be used in accordance with the privacy policy posted in connection with the XYZ Site, and (ii) if any data included in the User Data were first collected on the ABC Site, such data may only be used in accordance with the privacy policy posted in connection with the ABC Site. Neither ABC nor XYZ may sell, rent, transfer, distribute or disclose to any third party any User Data in a manner which identifies the User as a member or user of the other Party’s respective Web site or services. Tracy Pulito is an associate in the New York office of Brown Raysman Millstein Felder & Steiner( www.brownraysman.com). To subscribe to the newsletter, “e-Commerce Law and Strategy,” click here.

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