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A privacy policy is a legal document outlining how a website collects, tracks, and stores personal information from users. It is essential, especially for websites and apps that gather user data, as laws and regulations mandate transparency regarding data usage. The video tutorial from eForms discusses the significance of privacy policies, the role of cookies, and the necessary components when creating a privacy policy for your website. Users are encouraged to click a link at the video’s end to start customizing a privacy policy suited to their needs, highlighting the importance of consumer privacy protections.