California Privacy Bill’s Big Implications for US Businesses – Part II

by Buchanan Ingersoll & Rooney PC
Contact

Buchanan Ingersoll & Rooney PC

We recently provided background on the new rules and obligations of the California Consumer Privacy Act of 2018 (Privacy Act), which was adopted on June 28, 2018 and will go into effect on January 1, 2020. The bill provides California citizens with new rights and protections, while also requiring new obligations for business in California and beyond.

You can see a recap of the types of data and the types of businesses subject to the law in Part I of our series, but we’ve included a summary of some of the significant changes below:

  • Protected “personal information” not only includes directly identifiable information (e.g., name with social security number, financial account access information and health data), but also includes a person’s online browsing history, search history and any inferences from information collected such as a consumer’s psychology, behavior, abilities, and preferences, etc.
  • Not covered by the Privacy Act are: non-profit businesses; businesses with less than $25m in gross revenues that do not collect personal information for more than 50,000 consumers and do not derive over 50 percent of their revenue from selling data; and business that only collect or sell data outside of California.
  • Although the Privacy Act does not cover healthcare and consumer financial data protected by other Federal and state laws, any for profit healthcare or financial institution that collects website usage, browsing history, and demographic information using cookies and other internet technologies will be subject to the Privacy Act as it applies to those categories of personal information.

In Part II of this alert, we’ll help businesses covered by the law understand the law’s requirements and suggest some steps businesses may want to take to start preparing now.

New Law, New Rights, New Obligations

The Privacy Act structures its disclosure, data requests, and opt-out requirements in furtherance of five key rights for California consumers:

  1. Rights to know what personal information is being collected about them and whether their personal information is being sold or disclosed (and to whom).
  2. Rights to prohibit businesses from selling their personal information (while potentially forgoing certain free or reduced-cost benefits).
  3. Rights to require that businesses delete their data, absent the business needing the data for some ongoing business purposes.
  4. Rights to access the specific personal information that has been collected.
  5. Rights to receive equal service when exercising the rights afforded by the Privacy Act (while still allowing businesses to offer compensation or free/lower-cost services equal to the value of the data).

Specifically, once a business determines that it collects personal information, and that it meets the threshold criteria requiring it to comply with the Privacy Act discussed in Part I, the business must be prepared to do the following:

Disclose Data Collection Practices

All businesses that collect personal information must disclose to consumers, prior to collecting information, the categories of personal information to be collected, the purposes for the collection, and the third parties that will have access to the information collected. Updating and adding more detailed and specific disclosures to a company’s privacy policy will likely satisfy this requirement of the Privacy Act, as written. Businesses might also consider updating other portions of their websites dealing with  consumer privacy concerns to include this information.  

Allow Consumers to Opt Out of Information Being Sold

Businesses must:

  • Provide consumers with a link entitled “Do Not Sell1 My Personal Information” on their website’s homepage.2 Provide separate links to the “Do Not Sell” page in their online privacy policies, as well as any separate descriptions of California consumer privacy rights (e.g., in separate portions of their websites explaining the measures they take to protect consumer privacy).
  • Refrain from selling any personal information from consumers who have opted out of permitting sale of their data and from discriminating against consumers on the basis of an opt-out request.
  • If offering free services or financial or other incentives to entice consumers not to opt out, the value of those incentives must be equal to the estimated benefit to the business of selling the personal information.
  • If a consumer opts out of their data being sold, refrain from soliciting a change in that opt-out for 12 months.
Respond to Information Requests

Businesses must provide a toll-free telephone number or website at which consumers may request information about the personal information. Upon receiving a request from a consumer to access the consumer’s information, the business must have processes in place to verify the consumer’s identity and respond. After confirming the consumer’s identity, the business must respond, by mail or electronically, with the requested information.

  • For businesses that collect personal information, the disclosure must include: the categories; the sources; the business or commercial purpose for collection; the third parties with which the information is shared; and the specific pieces of information the business has collected on the consumer.
  • For businesses that sell information, the disclosure must include: the categories of personal information collected; the categories of information sold; the types of third parties to which information was sold, and the categories of information sold to each type; the categories of information sold to each specifically identified third party; and all categories of information otherwise disclosed for business purposes.

The Privacy Act requires all responses to be made within 45 days, unless the business has good cause for failing to meet that timeframe. The response also must be free of charge, by mail or electronically, and should be provided (to the extent “technically feasible”) in a readily usable format that allows the consumer to transfer the information to another entity “without hindrance.”3

Delete Information Upon Verifiable Request (Subject to Significant Limitations)

The Privacy Act grants consumers the right to have their personal information deleted. However, this right is significantly restricted in a number of ways. The business must first verify that the request is legitimate. Moreover, the business may deny even a verified request if the business can demonstrate the information is necessary to any of a wide range of business activities including, but not limited to:

  • Complete an ongoing business transaction with the consumer.
  • Use the data internally and lawfully in a way that would be expected by the consumer based on the consumer’s relationship with the business.

Thinking Ahead

Although the Privacy Act is not effective until January 1, 2020, businesses should start to assess the law’s impact now. Businesses should not rely on their compliance with other states’ privacy acts or even the rigorous new European General Data Protection Regulation (GDPR) to meet the requirements of the Privacy Act. For example, the Privacy Act’s “Do Not Sell My Personal Information” right has no counterpart in the GDPR and requires significant operational review to ensure compliance.

Here are six ways businesses can act now to prepare for the Privacy Act:

  1. Identify the categories of information currently collected from and about consumers, determine whether they fall into the new, broader definition of “personal information,” and be prepared to inform consumers about the purposes for which their personal information will be used.
  2. If you are not located in California, assess whether your business collects any personal information from California residents while they are in California, including:
    1. Online through voluntary submissions or chats.
    2. Online using cookies or other internet tracking technologies.
    3. Offline through telephone, text, fax, or mail.
  3. If you sell or exchange personal information for value (monetary or other), determine whether any third parties from which you purchase or to which you sell/exchange data are located in California, or whether the mechanisms by which you are transferring, gathering, or selling the data involves any California companies.
  4. If you sell/exchange personal information, analyze both (a) the fair value derived from the sale of the personal information and (b) the fair value of the services you provide to consumers. This analysis will assist in determining whether the benefits, services, or other incentives you are offering adequately compensate the consumer for the value of selling their data.4 For example, if you provide your customers with free online services, determine the amount of revenue foregone by not charging service fees for such services. Then, determine how much revenue you gain from selling customer data. Comparisons between the foregone revenue and the revenue gained from selling customer data will help establish the fairness of offering the service in exchange for data sales.
  5. Review your current operations to determine how data is stored, and what third parties receive personal information from you or your website, including whether such data is traceable back to a specific consumer.
  6. Start to determine what internal procedures will be needed and who in the company will be responsible for the following:
    1. Preparing and updating required mandatory disclosures.
    2. Locating where personal information is collected and stored.
    3. Receiving and verifying consumer requests.
    4. Responding to requests in writing or electronically.
    5. Deleting personal information when requested and required.
    6. Processing "Do Not Sell My Personal Information" requests.
    7. Following up with consumers after 12 months to allow them to opt back in to data sales (and any incentives provided by the company).

Finally, while some actions can be taken now, we recommend that businesses subject to the law continue to monitor its implementation, including any amendments and regulations to address open questions. For example:

  1. It is still unclear how households are treated and whether multiple devices for a single consumer will count as separate instances of collecting personal information for the purposes of the 50,000 consumer threshold. This will be critical to certain business whose collection efforts may exceed the threshold when factoring in multiple devices but may be under the threshold when only factoring in individual consumers.
  2. It is also unclear whether and how a business will be required to verify whether a member of the same household has the right to request information about household members who may not want their information to be shared.
  3. The scope of “doing business in” California is still unclear for non-California based companies. Furthermore, does the threshold revenue requirement for application of the law apply only to California derived revenue or all revenue derived by the business?
  4. While businesses will need to prepare updates to privacy policies, websites and other consumer-facing materials to advise consumers of their new rights, as required by the Privacy Act, further clarifications and amendments to the laws may further expand upon or limit the necessary revisions.
  5. While businesses may want to review their operations, including finances, revenue streams, and number of consumers/devices affected to determine whether the business meets the threshold criteria to require compliance, the Privacy Act still does not clearly define how revenue should be measured, whether including only California revenue or total business revenue.
  6. No guidance has been provided as to the formats in which data must be provided to consumers, upon their request, that would result in the data being transferable “without hindrance.” It remains to be seen, for example, how companies with legacy or proprietary software that is not interoperable will comply and what the scope will be of any exceptions to the requirements.
  1. For the purposes of the Privacy Act, “selling” includes “selling, renting, releasing, disclosing, disseminating, making available, transferring, or otherwise communicating orally, in writing, or by electronic or other means, a consumer’s personal information by the business to another business or a third party for monetary or other valuable consideration.”

  2. As currently written, the opt-out requirement only applies to a business’s homepage. This requirement may be amended further.

  3. The quoted terms are not further defined in the Privacy Act, leaving open questions regarding how far a business must go to ensure that a consumer can transfer their data to other entities, which may or may not use compatible systems.

  4. While many commenters have noted that the subjective value of a consumer’s data varies from person to person, the Privacy Act does not appear require a determination of the value of the data to the consumer.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Buchanan Ingersoll & Rooney PC | Attorney Advertising

Written by:

Buchanan Ingersoll & Rooney PC
Contact
more
less

Buchanan Ingersoll & Rooney PC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide

JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

Please note that if you subscribe to one of our Services, you can make choices about how we collect, use and share your information through our Privacy Center under the "My Account" dashboard (available if you are logged into your JD Supra account).

Collection of Information

Registration Information. When you register with JD Supra for our Website and Services, either as an author or as a subscriber, you will be asked to provide identifying information to create your JD Supra account ("Registration Data"), such as your:

  • Email
  • First Name
  • Last Name
  • Company Name
  • Company Industry
  • Title
  • Country

Other Information: We also collect other information you may voluntarily provide. This may include content you provide for publication. We may also receive your communications with others through our Website and Services (such as contacting an author through our Website) or communications directly with us (such as through email, feedback or other forms or social media). If you are a subscribed user, we will also collect your user preferences, such as the types of articles you would like to read.

Information from third parties (such as, from your employer or LinkedIn): We may also receive information about you from third party sources. For example, your employer may provide your information to us, such as in connection with an article submitted by your employer for publication. If you choose to use LinkedIn to subscribe to our Website and Services, we also collect information related to your LinkedIn account and profile.

Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

How do we use this information?

We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

  • Operate our Website and Services and publish content;
  • Distribute content to you in accordance with your preferences as well as to provide other notifications to you (for example, updates about our policies and terms);
  • Measure readership and usage of the Website and Services;
  • Communicate with you regarding your questions and requests;
  • Authenticate users and to provide for the safety and security of our Website and Services;
  • Conduct research and similar activities to improve our Website and Services; and
  • Comply with our legal and regulatory responsibilities and to enforce our rights.

How is your information shared?

  • Content and other public information (such as an author profile) is shared on our Website and Services, including via email digests and social media feeds, and is accessible to the general public.
  • If you choose to use our Website and Services to communicate directly with a company or individual, such communication may be shared accordingly.
  • Readership information is provided to publishing law firms and authors of content to give them insight into their readership and to help them to improve their content.
  • Our Website may offer you the opportunity to share information through our Website, such as through Facebook's "Like" or Twitter's "Tweet" button. We offer this functionality to help generate interest in our Website and content and to permit you to recommend content to your contacts. You should be aware that sharing through such functionality may result in information being collected by the applicable social media network and possibly being made publicly available (for example, through a search engine). Any such information collection would be subject to such third party social media network's privacy policy.
  • Your information may also be shared to parties who support our business, such as professional advisors as well as web-hosting providers, analytics providers and other information technology providers.
  • Any court, governmental authority, law enforcement agency or other third party where we believe disclosure is necessary to comply with a legal or regulatory obligation, or otherwise to protect our rights, the rights of any third party or individuals' personal safety, or to detect, prevent, or otherwise address fraud, security or safety issues.
  • To our affiliated entities and in connection with the sale, assignment or other transfer of our company or our business.

How We Protect Your Information

JD Supra takes reasonable and appropriate precautions to insure that user information is protected from loss, misuse and unauthorized access, disclosure, alteration and destruction. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. You should keep in mind that no Internet transmission is ever 100% secure or error-free. Where you use log-in credentials (usernames, passwords) on our Website, please remember that it is your responsibility to safeguard them. If you believe that your log-in credentials have been compromised, please contact us at privacy@jdsupra.com.

Children's Information

Our Website and Services are not directed at children under the age of 16 and we do not knowingly collect personal information from children under the age of 16 through our Website and/or Services. If you have reason to believe that a child under the age of 16 has provided personal information to us, please contact us, and we will endeavor to delete that information from our databases.

Links to Other Websites

Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

  • Our Legal Basis for Processing: Generally, we rely on our legitimate interests in order to process your personal information. For example, we rely on this legal ground if we use your personal information to manage your Registration Data and administer our relationship with you; to deliver our Website and Services; understand and improve our Website and Services; report reader analytics to our authors; to personalize your experience on our Website and Services; and where necessary to protect or defend our or another's rights or property, or to detect, prevent, or otherwise address fraud, security, safety or privacy issues. Please see Article 6(1)(f) of the E.U. General Data Protection Regulation ("GDPR") In addition, there may be other situations where other grounds for processing may exist, such as where processing is a result of legal requirements (GDPR Article 6(1)(c)) or for reasons of public interest (GDPR Article 6(1)(e)). Please see the "Your Rights" section of this Privacy Policy immediately below for more information about how you may request that we limit or refrain from processing your personal information.
  • Your Rights
    • Right of Access/Portability: You can ask to review details about the information we hold about you and how that information has been used and disclosed. Note that we may request to verify your identification before fulfilling your request. You can also request that your personal information is provided to you in a commonly used electronic format so that you can share it with other organizations.
    • Right to Correct Information: You may ask that we make corrections to any information we hold, if you believe such correction to be necessary.
    • Right to Restrict Our Processing or Erasure of Information: You also have the right in certain circumstances to ask us to restrict processing of your personal information or to erase your personal information. Where you have consented to our use of your personal information, you can withdraw your consent at any time.

You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

  • Timeframe for retaining your personal information: We will retain your personal information in a form that identifies you only for as long as it serves the purpose(s) for which it was initially collected as stated in this Privacy Policy, or subsequently authorized. We may continue processing your personal information for longer periods, but only for the time and to the extent such processing reasonably serves the purposes of archiving in the public interest, journalism, literature and art, scientific or historical research and statistical analysis, and subject to the protection of this Privacy Policy. For example, if you are an author, your personal information may continue to be published in connection with your article indefinitely. When we have no ongoing legitimate business need to process your personal information, we will either delete or anonymize it, or, if this is not possible (for example, because your personal information has been stored in backup archives), then we will securely store your personal information and isolate it from any further processing until deletion is possible.
  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

  1. Improve the user experience on our Website and Services;
  2. Store the authorization token that users receive when they login to the private areas of our Website. This token is specific to a user's login session and requires a valid username and password to obtain. It is required to access the user's profile information, subscriptions, and analytics;
  3. Track anonymous site usage; and
  4. Permit connectivity with social media networks to permit content sharing.

There are different types of cookies and other technologies used our Website, notably:

  • "Session cookies" - These cookies only last as long as your online session, and disappear from your computer or device when you close your browser (like Internet Explorer, Google Chrome or Safari).
  • "Persistent cookies" - These cookies stay on your computer or device after your browser has been closed and last for a time specified in the cookie. We use persistent cookies when we need to know who you are for more than one browsing session. For example, we use them to remember your preferences for the next time you visit.
  • "Web Beacons/Pixels" - Some of our web pages and emails may also contain small electronic images known as web beacons, clear GIFs or single-pixel GIFs. These images are placed on a web page or email and typically work in conjunction with cookies to collect data. We use these images to identify our users and user behavior, such as counting the number of users who have visited a web page or acted upon one of our email digests.

JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
  • New Relic - For more information on New Relic cookies, please visit www.newrelic.com/privacy.
  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.