Tackling The California Market From The Midwest? What A Business Needs To Know About The California Consumer Privacy Act (CCPA)

Jul
09

The data privacy regime is starting to look like more of the wild west every day. A year after companies had to focus resources on complying with Europe’s onerous requirements under the General Data Protection Regulations (GDPR), companies must once again gear-up for the first round of U.S. state efforts to tighten up data privacy rules with California’s new California Consumer Privacy Act (CCPA), which comes into effect on January 1, 2020. Whether you were able to ignore GDPR or not, CCPA sets the data privacy bar higher for most U.S. based companies.

DOES CCPA APPLY TO YOUR COMPANY?

CCPA generally will apply to any for-profit company that does business in California; and, either (1) has at least $25 million in annual gross revenues; (2) buys, sells, shares or receives information from at least 50,000 California consumers; or (3) derives at least 50% of its annual revenue from selling California personal information.

COMPLIANCE WITH GDPR DOES NOT EQUAL COMPLIANCE WITH CCPA.

While many aspects of CCPA read similar to the regulations you may have become familiar with under GDPR, there are clear differences. Like GDPR, CCPA will require companies to carefully craft specific language in their website privacy policy, including providing certain rights to California consumers, such as the right to request what personal information has been collected, the right to request that information is deleted, and the right to access information.

CCPA also includes specific disclosure requirements with respect to the “sale” of California consumer personal information and specific disclosure requirements with respect to personal information of minors. As part of the “sale” disclosures, many companies will need to add a new website opt-out option labeled “Do Not Sell My Personal Information.”

RISKS OF NONCOMPLIANCE.

CCPA is enforceable by both the California Attorney General and through limited private rights of action (specific to claims with respect to data breaches). Enforcement of CCPA will begin by the California Attorney General 6 months after the publication of final regulations or July 1, 2020, whichever is sooner. Fines can run from $2,500-$7,500 per incident (for example, a violation involving 10,000 California consumers could result in fines of $25 million to $75 million).

EXEMPTIONS – GLBA AND HIPPA.

There are specific exemptions with respect to certain types of data under CCPA. If you are a financial institution subject to Gramm-Leach-Bliley Act (GLBA) or a covered entity subject to HIPPA, certain data collected will be exempt. However, financial institutions and covered entities are still subject to CCPA with respect to data not subject to GLBA (non-NPPI) or HIPPA protection (i.e. non-PHI). It is important for companies to understand the interplay between all privacy regulations and set forth a data privacy compliance program that complies with all applicable laws.

WHERE TO START.

Analyzing the application of data privacy regulations can be daunting. McGrath North recommends companies start with data mapping to determine what information is collected, where the information is collected from, and what a company does with the information (including a list of third-parties that the information is later shared with). From here, companies can start to formulate well-thought-out compliance programs that allow them to comply with applicable data privacy laws while maintaining efficient and effective operations.

With a heightened national focus on data privacy and security, these burdensome and sometimes difficult to manage regulations are not going away. Whether you put in place a compliance program to satisfy the requirements of GDPR or not, CCPA and other U.S. state-based data privacy laws will impact almost all nationally operating entities.

McGrath North has data privacy experts to help you work through the weeds of the regulations and to partner with you to determine the most practical and efficient way for your company to implement privacy policies and procedures to ensure compliance. Here is a link for more information on our team: Privacy Team

Click here to read GDPR ONE YEAR LATER: HAS YOUR COMPANY SORTED THROUGH THE CONFUSION AND RISKS – WHAT U.S. COMPANIES NEED TO REMEMBER.

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