What is a privacy policy?

A privacy policy is a statement that outlines how an organization collects, uses, and protects individual data. It serves to inform users about what personal information is gathered, the purposes for which it is used, and the measures taken to secure that information. Organizations create privacy policies to demonstrate their commitment to transparency and to comply with various legal and regulatory requirements concerning data protection.

This documentation is essential for building trust with customers and users, as it clarifies their rights regarding their personal data and how they can expect their information to be handled. A well-defined privacy policy helps prevent misuse of data and guides organizations in establishing responsible data management practices.

In contrast, the other options do not accurately describe a privacy policy. A budget plan for marketing relates to financial planning, a legal requirement for financial reports pertains to compliance with accounting regulations, and a guide for employee conduct focuses on workplace behavior and ethics. None of these options concern the specific details of how personal data is managed, which is the core purpose of a privacy policy.