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Summary
- Terms of use set the rules for how visitors may interact with your website; a privacy policy explains how your business collects, stores, and shares user data.
- Businesses with an online presence are legally required to have a privacy policy if they are an APP entity under the Privacy Act.
- Copying documents from other websites is risky and potentially unlawful; both documents must reflect your specific business practices.
- This article is a plain-English guide to the difference between terms of use and privacy policies for Australian business owners.
- Produced by LegalVision, a commercial law firm that specialises in advising clients on contracts and privacy law.
Tips for Businesses
Review both documents whenever your business practices change, such as when you start collecting new types of data or update your website. Even if you are not legally required to have a privacy policy, having one builds customer trust and prepares your business for likely future compliance obligations.
Terms of use and a privacy policy are two distinct legal documents that every Australian business website should display, each serving a different protective function. Terms of use set out the rules governing how visitors interact with your website, while a privacy policy explains how your business collects, stores and handles personal information in accordance with the Privacy Act 1988, administered by the Office of the Australian Information Commissioner. Businesses that qualify as APP entities are legally required to maintain a privacy policy. This article will explain what these legal documents are and why they are important for your business.
What are Terms of Use?
Terms of use are a legal agreement between your business and anyone who visits or uses your website. Think of them as the “house rules” for your online platform. They are often mistaken for Terms and Conditions but rather than setting out the services or goods you provide, they set out what visitors can and cannot do when they interact with your website.
Your terms of use typically cover:
- Acceptable conduct: what users can and cannot do on your site, including prohibitions on unlawful behaviour.
- Intellectual property: clarifying that website content belongs to your business and limiting how users can reproduce or distribute it.
- User-generated content: if your site allows comments, reviews or image uploads, specifying your rights over that content and users’ responsibilities for what they post.
- Liability limits: clarifying what you are and are not responsible for, including the accuracy of information, uninterrupted site access, and content on third-party sites you link to.
What is a Privacy Policy?
A privacy policy is a legal document that sets out how your business handles the information of users. It explains what data you collect, why you collect it, how you store it and who you share it with. This document gives users transparency about their information and demonstrates your commitment to protecting their privacy.
Your privacy policy must accurately reflect your actual business practices. It should cover:
- the specific types of information you collect, such as names or addresses;
- the methods you use to collect that information;
- the purposes for which you use it; and
- how you handle sensitive information, such as health records or religious information, with additional care and security measures.
Why Do I Need Terms Of Use?
Terms of use protect your business from legal risks. Without terms of use, you leave your business vulnerable to disputes about acceptable behaviour on your platform.
This document also helps protect your business from being blamed for any user-generated content. For example, if someone posts defamatory comments on your website, your terms of use can clarify that you are not responsible for that content and that you reserve the right to remove it. They also prohibit users from misusing your intellectual property, such as copying your website content or logo without permission.
Additionally, terms of use set realistic expectations about what your business is and is not responsible for, such as limiting your fault for issues like website downtime out of your control.
Why Do I Need A Privacy Policy?
If your business interacts with user data in any way, implementing a privacy policy is one of the steps you can take to comply with the Privacy Act. Whether you collect personal or sensitive information, a privacy policy demonstrates transparency and builds trust with your customers.
If your business is an APP entity, you are legally required to have a privacy policy. However, even if you are not legally required to have one, creating a privacy policy is best practice. The Privacy Act’s small business exemption is also expected to be reformed, which means more Australian businesses will likely need to comply with the Australian Privacy Principles in the coming years. Rather than waiting until compliance becomes mandatory, starting to build good privacy habits now is a smart move. It shows customers you take their privacy seriously and prepares your business for future growth.
Key Statistics
- 60 entities: The OAIC launched its first privacy compliance sweep in January 2026, reviewing the privacy policies of approximately 60 entities across six sectors, assessing whether they met the mandatory requirements of Australian Privacy Principle 1.4, with expanded penalties now applying for failure to maintain a compliant privacy policy. Ministry of Business, Innovation & Employment
- 92%: The OAIC’s 2023 Australian Community Attitudes to Privacy Survey found that 92% of Australians would like businesses to do more to protect their personal information, with data privacy ranking as the third most important factor after quality and price when choosing a product or service. Courts of New Zealand
- 3,123: The OAIC finalised 3,123 privacy complaints in 2024–25, alongside a $50 million enforceable undertaking secured from Meta, signalling that the regulator is actively enforcing privacy obligations and that businesses without compliant policies face real regulatory exposure. Aminz
Sources
- OAIC, Privacy Compliance Sweep to Put Privacy Policies Under the Spotlight (January 2026)
- OAIC, Australian Community Attitudes to Privacy Survey 2023 (August 2023)
- OAIC, Annual Report 2024–25 (November 2025)
Key Takeaways
Even though these two legal documents both need to appear on your website, they perform different functions. Terms of use establish rules for your website and privacy policies explain your data handling practices. Together, they create a strong legal framework to protect business.
If you need help with drafting your Terms of Use or Privacy Policy, LegalVision provides ongoing legal support for businesses through our fixed-fee legal membership. Our experienced privacy lawyers help businesses manage contracts, employment law, disputes, intellectual property, and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision’s legal membership, call 1300 544 755 or visit our membership page.
Frequently Asked Questions
Will I get in trouble for not including a Terms of Use or a Privacy Policy?
Potentially, yes. Without terms of use, you have limited legal protection if users misbehave or disputes arise. Failing to include a Privacy Policy could see you facing penalties from the Office of the Australian Information Commissioner. Even if not legally required, running a website without them leaves your business exposed.
Can I copy the Terms of Use or Privacy Policies from other websites?
No. Copying another business’s documents is risky and potentially illegal. Their documents reflect their specific practices, which differ from yours. Your privacy policy must accurately describe your actual data handling, and your terms of use must address your specific risks. Copied documents may also be protected by copyright.
I have an old Privacy Policy from years ago. Can I still use that?
No, update it. A privacy policy must accurately reflect your current data handling practices. If your policy says one thing but you are doing another, you are not complying with it. Review and update it whenever your practices change. An outdated policy can expose you to penalties and damage customer trust.
Do I need to display both documents on my website?
Yes. Your website terms protect your business from liability and set rules for how visitors use your site. A privacy policy explains how you handle personal information and is legally required for many businesses. Both belong in your website footer, where users can easily find them.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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