As restaurants and hospitality businesses adopt digital platforms to engage customers, tools like cookies, pixels, and session replay are widely used to improve user experience and marketing. However, this increased reliance on tracking technologies has triggered a sharp rise in lawsuits and regulatory investigations nationwide, even for small businesses and those outside major cities.
Restaurants and hospitality operators now face significant legal risks from website tracking, especially as privacy laws like California’s California Invasion of Privacy Act (CIPA) and the California Consumer Privacy Act are increasingly being used as grounds for civil lawsuits. Importantly, your business does not need to physically be in California to be subject to these laws; if someone accesses your website from there, you could face claims, often for allegedly collecting or sharing customer data without proper notice or consent. Potential damages are high, with CIPA alone allowing $5,000 per violation, and class actions multiplying that amount.
To reduce risk, restaurant and hospitality operators should:
- Audit Tracking Tools: Regularly check which tracking technologies are active on your website and mobile apps. Ensure they don’t collect or share personal information without user consent.
- Update Privacy Policies & Consent Mechanisms: Clearly inform customers about tracking. Implement cookie consent banners that comply with privacy laws.
- Limit Data Collection: Only collect what’s necessary for business operations like reservations or loyalty programs. Avoid gathering sensitive data unless legally justified.
- Review Vendor Contracts: Confirm that third-party service providers agree to strong data protection terms.
- Stay Educated and Train Your Team: Ensure all staff members managing web or marketing activities understand privacy compliance basics.
If your business receives a legal claim regarding website tracking:
- Act quickly: Consulting with privacy-savvy legal and technical professionals is essential.
- Conduct technical and legal review: Assess your systems, understand the legal arguments, and plan your response.
With the legal landscape around website tracking continuing to shift, restaurants and hospitality businesses of all sizes must be proactive. Regular audits, transparency, and a culture of compliance can go a long way towards protecting your business from costly lawsuits and reputational harm.