California’s New Privacy Law Could Change the Personal Data Landscape
By Beth Florkowski of Fausone Bohn, LLP posted in Business on Tuesday, December 17, 2019.
Starting January 1, 2020, the California Consumer Privacy Act (CCPA) takes effect. As more and more companies compete for consumers’ personal data, California has taken an aggressive step to regulate business’ data collection practices. The CCPA imposes regulations for businesses that trade in consumer data.
The CCPA defines a “business” as a for profit entity that does business in California and one of the following apply: it has gross revenue of greater than $25 million; it uses the data of more than 50,000 consumers; or it derives a majority of its business from selling consumers’ personal information. A “consumer” means a California resident. Once a business falls under the CCPA, a whole slew of regulations apply.
The most important regulations focus on notice to the consumer. Businesses must notify the consumer of what data is being collected, using plain language and explaining what that data is used for. Businesses must also tell the consumer how they benefit from the company using or selling their personal data; e.g., a price discount or different services for those that share data. Moreover, all businesses must give the consumer a clear chance to opt out of data collection.
To ensure businesses adhere to these regulations, there are penalties for violators. The California Attorney General can bring a suit against any business that violates the CCPA to recover a $2,500 fine per violation or $7,500 for an intentional violation. For any data breach, a consumer can bring a lawsuit for up to $750 per incident. But business costs do not end with just fines. To be compliant, businesses will have to train staff on CCPA compliance, be ready to respond to consumer requests for information, and potentially lose some revenue streams as consumers opt out and deny businesses the ability to sell their data.
California has one of the largest populations and economies in the country, and this new law will have a significant impact. For businesses that fall under the CCPA, there will soon be greater regulatory scrutiny on how they handle consumers’ personal data. The new CCPA has prompted other states to explore their changing their own privacy laws. Even if your business doesn’t operate in California, new consumer data privacy laws could be coming to a state near you. If you are in need a corporate attorney, we would love to sit down and discuss how we can help. Contact our experienced team of business professionals at 248-380-0000.