Background

On January 1, 2014, California’s Online Privacy Protection Act was updated to include changes that will impact nearly every US business managing a commercial website that collects consumer personally identifiable information[i] (PII). 

California’s law already required websites that collect PII on California consumers[ii] to disclose certain online privacy practices through a published privacy policy, including publishing a policy effective date, identifying the categories of PII that a website collects, and explaining how PII is shared with third parties.

The amendment includes two important changes.  The first is to disclose how an operator responds to the “Do Not Track” signals available in most commercial web browsers (such as Microsoft Internet Explorer, Google Chrome, Apple Safari and Mozilla Firefox).  The second is a requirement to “disclose whether other parties may collect PII about an individual consumer’s online activities over time and across different Web sites when a consumer uses the operator’s Web site or service.”

Analysis

As web technology evolves consumers have increasingly become concerned about how their online actions and PII are managed, processed, and tracked.  California’s changes require website operators to be more transparent on their practices, so consumers can make informed decisions on how they will browse and what PII they are willing to share.

Do Not Track (http://donottrack.us/) is a technology and policy proposal that enables users to opt out of tracking by web sites they do not visit, including analytics services, advertising networks, and social platforms.  California’s law does not ask whether you do or do not track consumer behavior, it is specifically asking (from a technical standpoint) how the website responds to an electronic Do Not Track request from a user’s internet browser.  At this time there is no requirement to implement a solution to honor a Do Not Track request, rather just inform consumers how these requests are managed (if at all) in a privacy policy.

Further, as web sites incorporate rapidly changing ad networks and behavioral based ad targeting, California requires greater transparency in identifying what types of PII are tracked through online activities over time and across multiple web sites and then shared with other third parties.

Impact

If you are responsible for the operation of a website processing PII, California’s new law requires the re-examination of your internal practices and privacy policy.  You need to ask your organization’s IT department, web developers, and marketing department several questions including:

• Does our website take any action based on user Do Not Track requests?
• What, if any, first-party (i.e., placed by us) tracking features does our web site incorporate? 
• What, if any, third-party (i.e., someone other than us) tracking features does our website incorporate?
• What, if any, information do we collect on our website regarding a user’s online activities over time and across different web sites or online services (such as behavioral advertising or targeted ad-serving)?
• What, if any, information do we allow third-parties to collect on our web site regarding a user’s online activities over time and across different web sites or online services (such as behavioral advertising or targeted ad-serving)?
• How do we manage mobile applications and websites with regards to Do Not Track requests, tracking, and information sharing with third parties? 

The answers to these questions can then enable your organization to update your privacy policy accordingly.

Conclusion

Organizations operating a website processing PII on California consumers must understand its internal practices around Do Not Track, website tracking capabilities, and third party data collection and update its privacy policies in a timely and appropriate manner.  

[i] The term "personally identifiable information" means individually identifiable information about an individual consumer collected online by the operator from that individual and maintained by the operator in an accessible form, including any of the following:    (1) A first and last name. (2) A home or other physical address, including street name and name of a city or town. (3) An e-mail address.  (4) A telephone number.  (5) A social security number.  (6) Any other identifier that permits the physical or online contacting of a specific individual.  (7) Information concerning a user that the Web site or online service collects online from the user and maintains in personally identifiable form in combination with an identifier described in this subdivision.

[ii] The term "consumer" means any individual who seeks or acquires, by purchase or lease, any goods, services, money, or credit for personal, family, or household purposes.