Have you ever read a company‘s privacy policy? If you‘re like most people, probably not – they tend to be densely written legal documents filled with jargon. But privacy policies spell out how businesses collect, use, share and secure your personal information.
With data analytics and tracking embedded in apps, websites and devices everywhere today, you‘re generating tons of data whenever you interact with technology. Businesses want this data because it powers product recommendations, targeted advertising and more.
But California recently passed a first-of-its-kind law forcing businesses to be more transparent about handling your data. Keep reading to learn what this new California Consumer Privacy Act (CCPA) means for your privacy rights!
Why California Passed a Sweeping Privacy Law
Technology has made it easy for businesses to collect vast amounts of information about you – often without your knowledge or meaningful consent. Think about all the data generated when you browse the web, shop online, interact on social media or use free apps and services.
In our digital economy, personal data has become a lucrative commodity. An entire "data broker" industry buys and sells people‘s information, packaging it for marketing, analytics and people search sites.
But consumers are increasingly concerned about how opaque this data ecosystem is. In one 2021 survey, 92% of Americans said they do not feel like they have complete control over their data online.
California – home to Silicon Valley and leading tech companies – passed the nation‘s first comprehensive consumer privacy law in 2018 to address these concerns. The CCPA went into effect on January 1, 2020 and has sparked a nationwide movement for stronger data privacy protections.
Overview of CCPA‘s Groundbreaking Protections
The CCPA establishes new rights for California residents to understand and control how businesses handle their personal information. It also places corresponding responsibilities on companies to be transparent about data practices.
Here is an overview of the key protections in the CCPA:
- Right to know what personal data businesses collect and how they use/share it
- Right to delete your personal data held by businesses
- Right to opt-out of sales of your data to third parties
- Right to non-discrimination for exercising CCPA rights
The law also bans "dark patterns" – deceptive interfaces deliberately making it hard to opt-out of data collection.
Additionally, the CCPA allows individuals to sue companies for damages if their non-encrypted personal data is stolen in a breach.
But most enforcement is handled by California‘s Attorney General, who can fine businesses up to $7,500 per CCPA violation. Repeat offenders face civil penalties up to $30,000.
Who Does the CCPA Apply To?
The CCPA only covers personal data belonging to California residents. But it has a sweeping impact because it regulates major industries doing business in the state.
The law applies to for-profit companies that meet any of the following thresholds:
- Have annual revenue above $25 million
- Buy, receive or sell personal data of 50,000+ California residents, households or devices
- Earn 50%+ of annual revenue from selling California residents‘ data
So far, the California AG has received over 9,100 CCPA compliance requests and assessed 49 penalties for violations. Any company doing business in California has to take this law seriously.
How Do Businesses Comply with the CCPA?
Following CCPA guidelines takes effort, but helps build customer trust through transparency. Here are best practices for businesses:
- Update privacy policies to meet CCPA requirements
- Build user interfaces allowing consumers to easily opt-out of data sales
- Honor consumer requests to know/delete their information
- Limit data collection to what is strictly necessary
- Anonymize consumer data where possible
- Review/update vendor contracts to ensure CCPA compliance
- Designate staff to handle privacy requests and monitor compliance
- Implement data security controls like encryption
- Train employees on protecting consumer privacy
- Document processes managing consumer data lifecycles
CCPA vs. GDPR – How Do Major Privacy Laws Compare?
The EU‘s General Data Protection Regulation (GDPR) is the other major privacy law companies must grapple with globally. How does it stack up against CCPA?
Scope:
- GDPR covers all EU residents and applies extraterritorially
- CCPA limited to California residents and regulated businesses
Size thresholds:
- GDPR regulates all companies processing EU residents‘ data
- CCPA only applies to CA companies meeting revenue/data volume thresholds
Rights protected:
- Both protect rights to access, delete and opt-out of data sales
- CCPA adds right to non-discrimination
Enforcement:
- GDPR enforced by national agencies in each EU country
- CCPA enforced by California Attorney General
Fines:
- GDPR fines up to 4% of global revenue
- CCPA caps per-violation fines at $7,500
So while the CCPA and GDPR share similar goals, the CCPA is limited to California and has caps on enforcement not seen in GDPR.
CCPA & CPRA FAQs
What does CCPA stand for?
CCPA = California Consumer Privacy Act
Does the CCPA apply nationwide?
No, CCPA only applies to data belonging to California residents. Most other states do not yet have a similar privacy law.
Who is exempt from the CCPA?
Government agencies, non-profits, HIPAA entities, and companies making under $25M in revenue are exempt. It applies to for-profit businesses above the revenue threshold handling 50,000+ Californians‘ data.
Can I sue a company under CCPA?
You can only sue if your non-encrypted personal data is compromised in a breach due to negligence. Otherwise, enforcement is by the Attorney General only.
Does CCPA apply to small businesses?
Yes, if a small business earns $25M+ in annual revenue OR buys/sells/handles 50,000+ Californians‘ data. There are no small business exemptions.
CCPA Strengthens Protection of Consumer Privacy
The digital economy relies on vast amounts of consumer data. But people are realizing that hidden cost is loss of privacy. California‘s Consumer Privacy Act gives residents rights to understand – and exert control – over how their personal information is collected, used and sold by businesses.
This groundbreaking law ushers in a new era empowering consumers to protect their data privacy. It remains the model for comprehensive state legislation as the push for consumer protections gains momentum nationwide.
