California Consumer Privacy Act (CCPA)
The following is from the official site for the California Consumer Privacy Act (CCPA)
FACT SHEETThe California Consumer Privacy Act (CCPA) was enacted in 2018 and takes effect on January 1, 2020. This landmark piece of legislation secures new privacy rights for California consumers. The CCPA grants new rights to California consumers
- The right to know what personal information is collected, used, shared or sold, both as to the categories and specific pieces of personal information;
- The right to delete personal information held by businesses and by extension, a business’s service provider;
- The right to opt-out of sale of personal information. Consumers are able to direct a business that sells personal information to stop selling that information. Children under the age of 16 must provide opt in consent, with a parent or guardian consenting for children under 13.
- The right to non-discrimination in terms of price or service when a consumer exercises a privacy right under CCPA.
The CCPA applies to certain businesses
- Businesses are subject to the CCPA if one or more of the following are true:
- Has gross annual revenues in excess of $25 million;
- Buys, receives, or sells the personal information of 50,000 or more consumers, households, or devices;
- Derives 50 percent or more of annual revenues from selling consumers’ personal information.
- As proposed by the draft regulations, businesses that handle the personal information of more than 4 million consumers will have additional obligations.
The CCPA imposes new business obligations
- Businesses subject to the CCPA must provide notice to consumers at or before data collection.
- Businesses must create procedures to respond to requests from consumers to opt-out, know, and delete.
- For requests to opt-out, businesses must provide a “Do Not Sell My Info” link on their website or mobile app.
- Businesses must respond to requests from consumers to know, delete, and opt-out within specific timeframes.
- As proposed by the draft regulations, businesses must treat user-enabled privacy settings that signal a consumer’s choice to opt-out as a validly submitted opt-out request.
- Businesses must verify the identity of consumers who make requests to know and to delete, whether or not the consumer maintains a password-protected account with the business.
- As proposed by the draft regulations, if a business is unable to verify a request, it may deny the request, but must comply to the greatest extent it can. For example, it must treat a request to delete as a request to opt-out.
- As proposed by the draft regulations, businesses must disclose financial incentives offered in exchange for the retention or sale of a consumer’s personal information and explain how they calculate the value of the personal information. Businesses must also explain how the incentive is permitted under the CCPA.
- As proposed by the draft regulations, businesses must maintain records of requests and how they responded for 24 months in order to demonstrate their compliance.
- In addition, businesses that collect, buy, or sell the personal information of more than 4 million consumers have additional record-keeping and training obligations.
Cost estimates for CCPA compliance
- According to estimates in the Standardized Regulatory Impact Assessment for the CCPA regulations, the CCPA will protect over $12 billion worth of personal information that is used for advertising in California each year.1
- Preliminary estimates suggest a total of $467 million to $16,454 million in costs to comply with the draft regulation, if finalized, during the period 2020-2030.2
CCPA and GDPR The California Consumer Privacy Act (CCPA) and the European Union’s General Data Protection Regulation (GDPR) are separate legal frameworks with different scopes, definitions, and requirements. A business that complies with GDPR and is subject to CCPA may have additional obligations under CCPA.
- For example, under GDPR, companies must undertake a data inventory and mapping of data flows in furtherance of creating records to demonstrate compliance. Additional data mapping may be important to reflect the different requirements under CCPA.
- Under GDPR, companies must develop processes and/or systems to respond to individual requests for access to personal information and for erasure of personal information. These processes and/or systems may be applied to handling CCPA consumer requests, although businesses may need to review and reconcile the different definitions of personal information and applicable rules on verification of consumer requests.
- Under GDPR, companies must draft and execute written contracts with its service providers (“processors”). Companies may need to review these contracts to reflect requirements under CCPA.
1 Berkeley Economic Advising and Research, LLC, Standardized Regulatory Impact Assessment: California Consumer Privacy Act of 2018 Regulations (August 2019). 2 Berkeley Economic Advising and Research, LLC, Standardized Regulatory Impact Assessment: California Consumer Privacy Act of 2018 Regulations (August 2019). This number is specifically the cost associated with the regulations and not general compliance costs associated to the underlying CCPA law. More on the CCPA (external link) California website