diff --git a/PRIVACY.md b/PRIVACY.md
new file mode 100644
index 0000000000..219dd55df1
--- /dev/null
+++ b/PRIVACY.md
@@ -0,0 +1,55 @@
+# Privacy Policy
+
+## Overview
+This document describes how this project collects, handles, and processes data.
+
+## Data Collection
+- No personal information is collected without explicit user consent
+- For multiplayer functionality, we only collect necessary data:
+  - Username
+  - Game session data
+  - Network connection details
+
+## Data Storage
+- User preferences and settings are stored locally on your device
+- No sensitive data is transmitted to external servers
+- Game saves and configurations remain on your local system
+
+## Network Communications
+- Multiplayer sessions only transmit game-relevant data
+- Server connections are used solely for gameplay functionality
+- No tracking or analytics services are implemented
+
+## Crash Reporting
+- Crash dumps may be sent to Backtrace.io for diagnostic purposes
+- Each crash report transfer requires explicit user consent
+- Crash dumps contain:
+  - System information
+  - Machine hostname
+  - System username
+  - Technical data about the crash
+  - In-game screenshot
+- This data helps improve software stability
+- Users can decline sending crash reports without limiting gameplay functionality
+- Only team members have access to crash reports
+
+## Third-Party Services
+If you use optional features:
+- Server hosting services may collect connection data
+- Plugin systems operate under their own privacy terms
+
+## User Rights
+You have the right to:
+- Access your data
+- Delete your data
+- Opt out of any data collection
+- Request information about stored data
+
+## Changes to Privacy Policy
+- Users will be notified of any privacy policy updates
+- Changes will be documented in the project's changelog
+
+## Contact
+For privacy concerns or questions, please open an issue in the project repository or contact the team via [Discord](https://discord.gg/ZXZd8D8)
+
+Last updated: 2024-11-18
diff --git a/readme.md b/readme.md
index 2f5f41c04f..b1435910cf 100644
--- a/readme.md
+++ b/readme.md
@@ -52,7 +52,10 @@ If you want to help translate the game to your language, please stop by the Loca
   - 4.4 - [Graphics](#44-graphics)
   - 4.5 - [Audio](#45-audio)
   - 4.6 - [Scenarios](#46-scenarios)
-- 5 - [Code signing policy](#5-code-signing-policy)
+- 5 - [Policies](#5-policies)
+  - 5.1 - [Code of conduct](#51-code-of-conduct)
+  - 5.2 - [Code signing policy](#52-code-signing-policy)
+  - 5.3 - [Privacy policy](#53-privacy-policy)
 - 5 - [Licence](#6-licence)
 - 6 - [More information](#7-more-information)
 - 7 - [Sponsors](#8-sponsors)
@@ -247,14 +250,24 @@ We would also like to distribute additional scenarios with the game, when the ti
 
 ---
 
-# 5. Code signing policy
+# 5. Policies
 
-We sign our releases digital certificate provided by SignPath Foundation.
+## 5.1 Code of Conduct
+
+We have a [Code of Conduct](CODE_OF_CONDUCT.md) that applies to all OpenRCT2 projects. Please read it.
+
+## 5.2 Code signing policy
+
+We sign our releases with a digital certificate provided by SignPath Foundation.
 
 Free code signing provided by [SignPath.io](https://about.signpath.io/), certificate by [SignPath Foundation](https://signpath.org/).
 
 Signed releases can only be done by member of the [development team](https://github.com/OpenRCT2/OpenRCT2/blob/develop/contributors.md#development-team).
 
+## 5.3 Privacy policy
+
+See [PRIVACY.md](PRIVACY.md) for more information.
+
 ---
 
 # 6. Licence