GDPR-lite? California Adopts Stringent CCPA to Protect Consumers
California’s CCPA to Lead the Way in Privacy Legislation
With the amount of celebrities and high-profile figures that live in California, it has come as no surprise that the third-largest state in the United Sates consistently leads the way in drafting strict privacy laws. From protecting rights of publicity to drafting consumer privacy laws, California often provides the strictest protection for citizens’ rights.
The CCPA Strict Regulations Will Take Effect Day One of 2020
In 2018, California passed the California Consumer Privacy Act (“CCPA”), which is slated to take effect the first day of 2020. The CCPA, with protections so similar to the European Union’s General Data Protection Regulation (“GDPR”) that it is known to many as “GDPR-lite,” regulates data breaches and consumers’ privacy. While it is definitely not as all-encompassing as the GDPR, it does offer, by far, the strictest regulations regarding consumer privacy to date in the United States.
Specifically, the CCPA provides for severe penalties for companies that fail to comply with its standards and procedures upon a data breach of consumers’ sensitive information. As e-commerce continues to dominate sales as it expands and crosses state borders, the CCPA has thus been written to include businesses that may not be physically located within the state’s borders but still ship to California residents. While the United States already has laws that ignore state lines, specifically tax laws, the CCPA is still relatively ground-breaking in how it will affect companies across the United States.
How The CCPA Will Protect Consumers
The CCPA is a step towards stronger consumer privacy regulation as the legislation puts forth in writing that businesses are responsible for the safeguarding of their consumers’ personal information. Specifically, it states that a California resident has the right to: 1) access his or her personal information as held by a business; 2) have said personal information deleted; 3) know what personal information a company has collected or sold; 4) have the option to opt-in or out of data collection without harassment; and 5) choose not to have their personal information disclosed.
In contrast to the more strict GDPR, however, the CCPA specifically targets bigger companies, providing relative safe harbors for smaller to mid-tier sized companies because it only affects companies that: 1) have annual sales above $25 million; 2) handles the “personal information of 50,000 or more consumers, households, or devices;” or 3) derives 50 percent or more of annual revenue from the sale of consumers’ personal information.
Smaller Companies Exempt From CCPA Regulation
While startups and smaller companies may feel a sense of relief from being exempt from the regulations of the CCPA, it can be troublesome for consumers as these smaller companies may likewise not enforce strict privacy procedures if they simply lack the budget to do so. Moreover, if these companies do suffer from data breaches and simply fold or declare bankruptcy, this still does not provide much protection for consumers that are impacted from the data breach.
Overall, however, states will continue to pass more legislation regarding personal information as e-commerce continues to dominate sales. As such, it will be interesting to see if other states follow California’s lead in providing stricter regulation or choose to go in a different direction altogether.
You may also be interested in:
Sign up for and explore our content and thought leadership here.
About the Firm:
Klemchuk LLP is a litigation, intellectual property, transactional, and international business law firm dedicated to protecting innovation. The firm provides tailored legal solutions to industries including software, technology, retail, real estate, consumer goods, ecommerce, telecommunications, restaurant, energy, media, and professional services. The firm focuses on serving mid-market companies seeking long-term, value-added relationships with a law firm. Learn more about experiencing law practiced differently and our local counsel practice.
The firm publishes Intellectual Property Trends (latest developments in IP law), Conversations with Innovators (interviews with thought leaders), Leaders in Law (insights from law leaders), Culture Counts (thoughts on law firm culture and business), and Legal Insights (in-depth analysis of IP, litigation, and transactional law).