Recent high-profile, corporate data breaches demonstrate the significant costs a company incurs when its data about users is compromised. In turn, this increases the risk associated with collecting and utilizing user data for targeted advertising, the current tentpole of the online economy. As a result, more companies may seek to reallocate their budgets, and invest in mitigating the risks of collecting user data.This paper analyzes risk mitigation strategies in the informational privacy landscape in three parts:1) why privacy policies are a useful tool for mitigating the risks of data collection in the current environment; 2) why companies are better served by taking a best practices approach, rather than a minimalist approach, to comply with data collection standards and what that approach might look like; and 3) why user-oriented privacy policies are likely to mitigate risk more effectively than machine-based preferences at this time. Data collection companies who collect data from users in California are the primary subject of this paper because California has been one of the most active jurisdictions in the United States in enacting privacy-related legislation.The takeaway from this paper is that the benefits that flow from these companies' proactive adoption of user-oriented privacy policies outweigh the advantages of adhering to minimum standards.
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