overview
On July 25, 2025, Shopify's Terms of Service will be updated.
This update introduces "Shopify Network Intelligence" and requires merchants to comply with privacy policies on their e-commerce sites.
This article provides a detailed explanation of everything from an overview of Shopify Network Intelligence to the impact of enabling/disabling it, privacy policy compliance, and specific steps to take. We will clearly explain the actions that e-commerce businesses should take now, including the risks of not taking action, so we hope you will find it useful!
table of contents
- Introduction: Impact and background of the updated regulations
- What is Shopify Network Intelligence?
- Effect of enabling/disabling
- Privacy Policy and Terms of Use
- What is the deadline for response?
- Actual response flow
- Summary: What happens if you don't respond?
1. Introduction: Impact and Background of the Updated Terms
The update to Shopify's terms of service scheduled for July 25, 2025 is due to the introduction of Shopify Network Intelligence. This is a mechanism to anonymize, aggregate, and analyze store data from multiple merchants, and provide more accurate marketing support and optimize customer experience through various tools provided by Shopify. With this update, merchants will be required to enable Network Intelligence in order to use the applicable features, and will be required to disclose the contents of the privacy policy of their EC sites and obtain consent for each region, such as the United States and the EU. If Network Intelligence is not enabled, some apps will not be available.
Reference:Shopify Terms of Use effective July 25, 2025
2. What is Shopify Network Intelligence?
Shopify Network Intelligence is a system that aggregates and analyzes anonymized data collected from Shopify stores around the world and uses it to optimize marketing and store operations. Specifically, the following apps use insights collected from Shopify stores around the world to enable optimized personalization and targeting.
Apps affected by Shopify Network Intelligence
- Shopify Audiences
- Shop Channel
- Shopify Email
- Shopify Collabs
- Shopify Search and Discovery
3. Effect of enabling/disabling
This feature can be enabled/disabled from the Shopify admin panel's Settings > Customer Privacy. Whether you enable or disable it, there are advantages and disadvantages as follows.
Benefits of enabling
Enabling Shopify Network Intelligence allows you to use apps that support this feature. These apps use anonymized data from other merchants to help you optimize ad delivery, improve search functionality, and increase the effectiveness of your email marketing. As a result, you can attract more customers and improve your customer experience, which can lead to increased sales and improved marketing ROI.
Disadvantages of Activation
On the other hand, enabling it will mean sharing customer data with Shopify, which may be considered "provision to a third party (a third party in a foreign country)" under the Personal Information Protection Act, so it is necessary to clearly state this in the store's privacy policy and terms of use. Also, depending on the region, additional legal compliance such as obtaining consent and setting up an opt-out function may be required, so it will take a certain amount of time to set it up and document it.
Benefits of Disabling
By disabling it, you will not have to share customer data with Shopify, so you can minimize privacy concerns. It will be easier to demonstrate that your company is committed to protecting your customers' personal information, which will be reassuring for small and medium-sized stores in privacy-sensitive industries and those before expanding overseas.
Disadvantages of Disabling
However, if you disable Shopify Network Intelligence, compatible apps will be automatically uninstalled, and some marketing features and customer acquisition support tools will become unavailable. Compatible apps include Shopify Mail and Search and discovery, which are used by many stores, so losing these apps will be a major blow. There is a high possibility that even more advanced services will be linked to Shopify Network Intelligence in the future, and there is a risk of losing opportunities in terms of functionality and revenue.
4. Privacy Policy and Terms of Use
Enabling Network Intelligence imposes explicit disclosure obligations on merchants to their customers and may also impose specific requirements depending on the region in which you sell.
Customer notification requirements
Your terms of use and privacy policy must include the following:
You should also provide a link to your privacy policy somewhere visible to your customers.
- Link to Shipify Consumer Privacy Policy (Privacy Policy only)
- Your store is hosted by Shopify
- Shopify processes your data when you visit our store and make purchases (including to provide services based on your interactions with other merchants and Shopify)
- Your information may be shared with Shopify and third parties in other countries to use data from your interactions with other merchants and Shopify to provide services to you.
Additional requirements based on location
Regional requirements
- United States: Provides an opt-out function and dedicated page for the "sharing" of customer data and its use for targeted advertising, and also provides a link to the opt-out page in the privacy policy
- EEA/UK/Switzerland: GDPR consent collection, cookie banner and link to Shopify privacy portal on privacy policy page
*Opting out refers to the act of refusing to participate in a certain service or activity, or canceling an existing registration for that service or activity. It is used in particular to stop receiving newsletters or advertising emails, and to refuse the use of personal information.
Automatic Privacy Settings
The above opt-out page and cookie banner installation can also be set automatically via the automatic privacy settings in Settings > Your Privacy.
When this setting is on, your store will automatically apply default settings based on your customers' location that comply with local privacy laws (e.g. GDPR, CCPA, etc.), such as automatically displaying cookie banners and consent management to customers in those locations. However, this may not fully meet legal obligations, and you are encouraged to review and customize it yourself.
5. What is the deadline for response?
The revised Terms of Use will come into effect on July 25, 2025 .
Early response is important to avoid the risk of legal violations or operational outages due to delays.
6. Actual response flow when enabling
- Shopify admin → Settings > Customer Privacy and enable Shopify Network Intelligence (default setting is enabled)
- Updates to our Terms of Use and Privacy Policy
- If enabled, add link and text to privacy policy
- For the US, set up an opt-out page and include a link to the privacy policy
- Implemented cookie banner and consent withdrawal link for EU/UK
7. Summary: What happens if you don't respond?
- Invalidation → Risk of loss of functionality and reduced customer attraction efficiency
- Not responding → Possibility of violating laws and regulations, loss of brand trust, and penalties
While the recent update to Shopify's terms of service requires changes such as a revised privacy policy, it also aims to promote features that will be beneficial to future merchants, such as precise marketing support and optimized customer experience. By fully understanding the content and responding accordingly, we hope to be able to expand our business using Shopify.
Please note that the response policy and other matters stated in this article are based on the judgment of Commerce Media Legal. The final decision on the response policy and the response should be made at the discretion of the legal department of each company.
