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What is the CCPA and how will it affect your company?

May 4, 2022

Technology enables businesses to innovate so fast that they often wander into unregulated territory. It’s difficult to know where the boundaries are until they’re crossed. California has taken charge against concerns surrounding a commonly crossed boundary—data privacy. 

What is the California Consumer Privacy Act (CCPA)? 

The California Consumer Privacy Act is a state statute implemented to protect California consumers’ data privacy rights from private corporate entities. Under CCPA regulations, consumers now have more jurisdiction over their own personal data which is collected and tracked by for-profit organizations. According to California’s Attorney General, the law secures new privacy rights for California consumers, which include: 

  • The right to know about the personal information a business collects about them and how it is used and shared;
  • The right to delete personal information collected from them (with some exceptions);
  • The right to opt-out of the sale of their personal information; and
  • The right to non-discrimination for exercising their CCPA rights.”

The CCPA was passed into law in 2018 and became effective on January 1, 2020. Before the CCPA was enacted, there were no regulations that firmly designated how the data was used, sold, or dispersed. California residents now have more power over their own information security. Furthermore, any business’s contractual provision that would otherwise waive your data rights is now unenforceable under the CCPA.

What kinds of data does the CCPA protect?

The CCPA protects consumers’ personal information, which is defined as “information that identifies, relates to, or could reasonably be linked with you or your household.” A few examples of CCPA-protected data include:

  • Your name, age, and date of birth
  • Social security number
  • Credit card number 
  • Email address 
  • Postal address
  • Political or religious affiliation
  • Passport or driver's license information
  • Records of products purchased
  • Internet browsing history 
  • Geolocation data 
  • Fingerprints 

The above list does not include every possible example. CCPA regulation applies to any information that can be used to create a profile of a consumer’s personal preferences and characteristics. However, any publicly available information about a consumer’s identity is not regulated under CCPA. 

Who does the CCPA apply to?

The CCPA only protects the rights of consumers who reside in California. Private, for-profit entities that conduct business with a California resident must adhere to CCPA regulations if they fall under at least one of three stipulations:

  • Have a gross annual revenue of over $25 million
  • Buy, receive, or sell the personal information of 50,000 or more California residents, households, or devices
  • Derive 50% or more of their annual revenue from selling California residents’ personal information

Public, non-profit businesses, such as government organizations, are exempt from complying with CCPA regulations. 

How to comply with CCPA regulations

Oftentimes, businesses have to comply with multiple regulations. If your business falls under one of the above categories, it will have to comply with CCPA’s regulations. Currently, there are six articles of regulation which each contain specific obligations that must be satisfied. Below are a few examples of noteworthy requirements for businesses that must adhere to CCPA compliance.

  • If a business wants to collect personal data from a consumer, it must issue a notice at or before collection. The consumer should know what data will be collected and how it will be used.
  • In order to respond to consumer requests to opt-out, know, and delete data, businesses must create accessible means or procedures to do so. In the case of opting out, a “Do Not Sell My Info” link must be posted on their website or mobile app.
  • Should a consumer enact one of their CCPA rights, a business must respond within 45 days, with a possible extension of an additional 45 days (90 total). 
  • Consumers who request the right to know or delete their data from a business must be able to accurately verify their identity.
  • Businesses must disclose any financial incentives earned from selling, exchanging, or retaining the use of personal data. They must also provide a rationale for how they calculated the value of the data. 
  • To demonstrate compliance, businesses must maintain records of all consumer requests and how they responded for 24 months.

What are the CCPA fines and penalties?  

Businesses that violate CCPA’s regulations are subject to a $7,500 fine per intentional violation, and up to $2,500 per unintentional violation. In the case of a breach due to faulty security procedures, a business is subject to civil lawsuits which can result in a fine of “one hundred dollars ($100) and not greater than seven hundred and fifty ($750) per consumer per incident or actual damages, whichever is greater.” In some cases, businesses have 30 days to resolve a compliance issue, and if done successfully, may be excused from penalties or fines. 

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