California Rolls Out Proposed Data Privacy Rules for Businesses

Thursday, October 10, 2019

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A sweeping consumer-privacy law is closer to launch as California Attorney General Xavier Becerra introduced draft rules businesses must follow to “mine” and sell Californians’ personal data.

As of Jan. 1, 2020, California residents will have the right to know when a business has collected or sold their personal information as well as the power to deny the sale of the data to marketing companies. Proponents tout the legislation, officially the California Consumer Privacy Act, as first-of-a-kind protections that will hold major retailers and marketers accountable for how they gather and use personal data.

“Data is today’s gold, everyone is rushing to mine data,” Becerra said at a press conference. “There’s a rush to mine, use and sell our personal information.”

The 24-page framework introduced comes after months of discussions and public hearings between the California Department of Justice, lawmakers, businesses and consumer rights advocates over how to implement and enforce the wide-ranging act.

Under the draft rules, qualifying businesses must give consumers notice at or before data collection, create a process for people to opt-out or request to have data deleted and respond to consumer data requests within 45 days.

When handling opt-out requests, businesses must verify consumers’ identities and store requests for at least two years. Businesses will also have to follow new rules when collecting information on minors under 16.

Becerra said the rules are not meant to punish businesses but to allow Californians to “pull the curtains back” and see what kind of information is being collected and sold.

“Our goal here in California is not to stifle innovation. That’s why if finalized, these rules would allow businesses an appropriate degree of flexibility in coming up with processes and procedures,” Becerra said.

The act will apply to businesses with annual revenues over $25 million, that buy, receive, or sell information of 50,000 consumers or get 50% or more of their revenue from selling consumers’ data. The rules also outline additional obligations for businesses that handle the information of more than 4 million people.

In a win for civil liberty groups, former Gov. Jerry Brown signed the act in 2018 after lawmakers made a last-minute deal to stave off a competing measure that had qualified for the statewide ballot. Real estate magnate Alastair Mactaggart, who spent millions to qualify the measure, agreed to pull his measure days before an election deadline due to the bill’s passage.

During the last legislative session, groups like the Internet Association and California Chamber of Commerce proposed a horde of changes in hopes of making the act more business-friendly. But the proposals were largely shot down by the Democratic-controlled Legislature and the act’s original tenets remained mostly intact.

While there are a few minor changes to the act still on Gov. Gavin Newsom’s desk, Becerra says he confident his staff won’t have to tweak the draft much to comply.

But the driving force behind the act, Mactaggart, isn’t done in his quest to pull back control from the tech industry and retailers: Last month he introduced another ballot proposal that increases penalties against companies for violating child privacy laws and establishes a new state agency to monitor alleged violations.

In a phone interview, Mactaggart said that while he’s pleased with Becerra’s draft rules, he believes his new proposal can “set the bar higher” on privacy protections.

“I look at privacy as a new human right, we never needed it before,” Mactaggart said. “Now companies can surveil us 24-7.”

Mactaggart also said that he’s confident that his team will be able to collect the over 600,000 signatures that will be needed to land the proposal on the November 2020 ballot.

While Becerra declined to comment on Mactaggart’s ballot proposal, he noted there are still two months left for public input on the draft regulations. His office will be holding a series of hearings the first week of December with stops in Sacramento, Los Angeles, San Francisco, and Fresno.

Source: Courthouse News Service

Category: Business News