Starting January 1, 2020, if you are a for-profit company doing business in California, you may have new data privacy compliance obligations. Specifically, California just enacted the California Consumer Privacy Act of 2018 (the country’s strictest data privacy law to date), placing new privacy mandates on certain businesses with respect to the personal information of consumers (defined as natural persons who are California residents). Many aspects of the new law smack of EU-GDPR influences, such as a new and improved (in other words, broader) definition of personal information and the inclusion of guaranteed consumer rights with respect to such personal information. If your business is already in compliance with the EU’s GDPR, the California law will be nothing new to you. For other businesses, however, you have 18 months to get with the program.
In the past, a business only needed to be concerned with protecting identification numbers (SSN, driver’s license, passport, etc.); financial, employment, educational, insurance, and health information; and user IDs and passwords. Now, however, added to the list of protected data elements are: email addresses, IP addresses, Internet browsing history, biometrics, geolocation data, commercial information (such as a consumer’s purchasing history), profiling inferences, “audio, electronic, visual, thermal, olfactory, or similar information,” or any other information that “identifies, relates to, describes, is capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household.”
With respect to this personal information, California consumers have been expressly granted the right: (1) to know what personal information is being collected about them; (2) to know whether their personal information is sold or disclosed and to whom; (3) to opt out of the sale of their personal information; (4) to access their personal information (and, in most cases, have it deleted upon request); and (5) to be free from discrimination for exercising their privacy rights. To ensure these rights are not violated, businesses are required to take certain steps, such as, when requested by the consumer, advising the consumer of the categories of information collected and the purposes for such collection, and of their right to have such information deleted. To meet their obligations under the new law, companies must, among other things, develop communication avenues, privacy notices, website statements, and the like.
The new law generally applies to businesses (and entities that “control or are controlled by” and “share common branding with” such businesses) that collect or sell consumers’ personal information, or disclose such information for a business purpose, provided that:
(1) The business (either alone or jointly) determines the purposes and means of processing the personal information (a la GDPR), and
(2) The business meets at least one of the following thresholds:
a. Has annual gross revenues in excess of $25 million;
b. On an annual basis, buys, receives, sells, or shares for commercial purposes the personal information of 50,000 or more consumers, households, or devices; or
c. Derives 50% or more of its annual revenues from selling consumers’ personal information.
The terms “business purpose” and “commercial purposes” are also specifically defined in the law.
The obligations placed on companies by the new law are numerous and very specific as to what must be done, how it must be done, and when. Violations of the law can result in civil penalties and the payment of damages. If you think your company may be subject to this new law, Privacy Ref is available to help you assess your compliance level and needs.