diff --git a/PRIVACY.md b/PRIVACY.md
new file mode 100644
index 0000000..67dfb57
--- /dev/null
+++ b/PRIVACY.md
@@ -0,0 +1,37 @@
+# Privacy Policy — session-optimizer plugins
+
+_Last updated: 2026-07-22_
+
+The three plugins in this marketplace (context-guard, refine-gate, statusline)
+are **local-only** tools. This policy states exactly what data they read and
+write, and what leaves your machine.
+
+## What the plugins process
+
+- **context-guard** reads your Claude Code session transcripts
+  (`~/.claude/projects/**/*.jsonl`) and subagent transcripts to compute token
+  usage and spend, and writes checkpoint stub files under your home directory.
+  The Stop/SubagentStop hooks run local Python only.
+- **refine-gate** reads the prompt you submit (inside the UserPromptSubmit
+  hook) and injects binding instructions into the same session. Nothing is
+  stored beyond a small local state file used to rate-limit the gate.
+- **statusline** reads Claude Code's statusline stdin payload, your session
+  transcripts (for telemetry and cost aggregation), local git state, and its
+  own config files under `~/.claude/`. It writes local cache files only.
+
+## What leaves your machine
+
+**Nothing.** No plugin in this marketplace makes any network call, sends
+telemetry, or transmits any content to the author, to Anthropic, or to any
+third party. All processing is local subprocesses (bash/Python) reading and
+writing files under your home directory.
+
+## Your controls
+
+- Uninstall the plugin(s) to stop all processing.
+- Delete `~/.claude/.statusline-*` cache files and checkpoint stubs at any
+  time; nothing else is persisted.
+
+## Contact
+
+admin@ai-architect.tools · https://github.com/cdeust/session-optimizer/issues