Cookies and Privacy Management: The Essential Guide

February 21, 2019

As calls for privacy regulations get louder across the globe, understanding and managing cookie consent requirements has become more urgent than ever. [Businesses have the crucial responsibility of balancing compliance with a robust digital customer experience.]

The 2019 Consumer Privacy Survey by Cisco found that over 84% of users want more control over how their data is used. The global pandemic only worsened the rate of cybercrime worldwide and further fuelled demand for increased digital transparency. With the data protection regulations continuously evolving, it’s getting more and more challenging for businesses to implement a successful cookie management plan.

This handbook is an essential guide on how cookies work, why they can be dangerous, and how you can ensure that your organization is cookie compliant.

What Are Cookies?

Cookies are small text files, usually consisting of letters and numbers, that are placed on your device when you browse a website. They’re stored by the web browser and can be added to any device like a computer, tablet, or smartphone.

The data in a cookie is created by the host server and is labelled with an ID unique to your computer and network. This way, cookies help the browser “remember” you and your activity on a website. On your next visit, these cookies alert the server that the connection is from the same person on the same computer. Session cookies expire once you close your browser, while persistent cookies can be stored in your browser for up to a year.

Cookies are tiny — most of them only take up three to ten kilobytes of space on your hard drive. They can also be easily viewed and deleted. Cookies, by themselves, are harmless and can’t infect your computer with any form of malware. It’s how this information is gathered and used that is the root of privacy issues.

What Are Cookies Used For?

Cookies help websites work more efficiently and provide analytic information to the website owners. The three most important functions of cookies are:

  • Session management: Allows the website to recall individual login information and preferences
  • Personalization: Predominantly used for customized advertising
  • Tracking: Uses previous activity to generate relevant information and links

The Different Types of Cookies

First-party cookies are created directly by the website you’re using. These are generally safer, and are essential for providing a good user experience. On the other hand, third-party cookies are generated by domains other than the one you’re visiting directly. These are much more troubling and are frequently used for cross-site tracking, ad-serving, and retargeting.

Within these categories, there are more specific types of cookies:

- Strictly necessary cookies

These are essential to the website’s functionality and usually can’t be deactivated by the user. Forcibly disabling these cookies may cause service issues and could make some features unavailable.

- Functionality cookies

These cookies help the website server remember user information and preferences like login credentials, location, and language settings.

- Analytical and performance cookies

These cookies are used to analyze user activity to optimize website performance. Analytics cookies help the owners track the number of visitors and see how they move around the website.

- Targeted/Advertising cookies

They track all online activities including the sites you visit and the links and advertisements you click on. These cookies help customize advertisements to make them more relevant to your interests.

- Social networking cookies

These cookies allow users to share content on social media platforms. They do this by linking activity on the current website with a third-party sharing platform like Facebook, Twitter, or Instagram.

Why Cookies Can Be Dangerous

When your businesses place cookies on a visitor’s browser, legally you take on complete responsibility for protecting any collected data, even if you don’t know that the cookies are there. What’s more, failure to implement the proper security safeguards could lead to long legal battles, heavy fines, and damage to your reputation.

The issue is compounded by the presence of third-party ad networks on most websites. These advertising networks span hundreds of sites and track user data across them all. In this way, central data aggregators use cookies to create extremely detailed user profiles. More and more people are looking at this constant tracking as a form of privacy invasion and are lobbying for strict regulations governing cookies.

Most importantly, you need to take proactive steps to ensure that your data is not vulnerable to unauthorized access. Zendata can help you do just that, in minutes, without any additional engineering or development. We monitor your website by continuously scanning for cookies that are being placed, the functionality they fulfill, and the provider they belong to. These techniques make sure you are not collecting any data that isn’t strictly necessary and minimize risks of security intrusions aimed at stealing your customers’ cookie-collected personal information.

Cookie Laws and Regulations

Over the past few years, the regulations for cookie management have evolved into complex, legally binding requirements. Two of the most prominent ones are the General Data Protection Regulation (GDPR) and the California Consumer Protection Act (CCPA), but there are nearly 110 privacy/data regulations with different requirements and enforcements worldwide.

As mentioned, the General Data Protection Regulation (GDPR) is one of the most comprehensive privacy regulations in the world. It was established by the European Union and went into effect in 2018. Even though GDPR translates into law only in Europe, organizations worldwide need to be compliant. As users can access a website from anywhere in the world, differentiating U.S. citizens from EU citizens would be very costly for most businesses.

Even though there’s no federal law concerning cookies in the U.S., the California Consumer Protection Act (CCPA) secures the personal information of users in California. Both CCPA and GDPR treat cookie management very similarly, except for a few variations in the selection of an opt-out mechanism. Extensive federal laws governing customer data privacy are expected to be enacted and enforced in the U.S. very soon.

Organizations must fulfill all of the following requirements to ensure that they are GDPR compliant:

  • Users must have a choice to select which cookies are enabled,
  • Users must be able to opt-out, even if they had previously consented to the use of cookies
  • Users who reject cookies must still receive full access to the website
  • To encourage transparency, consent must be freely given, specific, and informed
  • Consent must be a clear affirmative action like pushing an accept button or clicking an opt-in box

Complying with Data Protection and Cookie Laws

While complying with multiple cookie regulations can seem like a daunting task, you must take active measures to align with all existing policies. Doing so will safeguard you against potential legal battles and hefty fines. It also helps build stronger consumer trust and improves your organization’s digital footprint in the long run.

Here are the five fundamental steps you need to take in order to remain compliant with cookie laws:

1. Audit and classify your cookies to understand how many of them your website actually runs

2. Share your cookie practices with your users (ideally, the users should be informed upfront about how their data would be used)

3. Gain consent before placing any cookies on the user’s computer

4. Customize a cookie banner (call-out box) or pop-up notification (dialog box) — with clear opt-in or opt-out options

5. Ensure that your organization-wide privacy policy is consistent with cookie consent management

Today, cookies have become a necessary part of web browsing and are omnipresent across all industries. But this wealth of data can also be the source of privacy concerns for consumers and compliance risks for businesses. With a vast array of new regulations, a poor cookie policy can lead to significant fines and a growing mistrust among consumers. However, if you are proactive about maintaining transparency and ensuring compliance, your business will greatly benefit from all the advantages that cookies offer.

Zendata can help you map the cookies you have on your site against their function to create an instantaneous cookie inventory/policy like this.