On March 15, 2023, the Colorado Attorney General (AG) finalized its set of regulations implementing the Colorado Privacy Act (CPA) – the Colorado Privacy Act Rules (“Colorado Rules”). The Colorado Rules clarify and expand upon the CPA’s requirements (see here for more information about the CPA), and will enter into effect alongside the CPA on July 1, 2023.

Notably, the Colorado Rules contain numerous obligations that expand upon the CPA and feature illustrative examples and guidance for implementation. Specifically, the Colorado Rules provide for the following:

• Universal Opt-Out – Similar to California’s California Consumer Privacy Act (CCPA) (as modified by the California Privacy Rights Act, CPRA), Colorado requires controllers to honor opt-out preference signals for consumers to opt-out of the “sale” of their personal data or targeted advertising. The Colorado Rules dictate specific requirements for how these signals must operate, what disclosures controllers need to make and how controllers must respond to them. Additionally, the Colorado Rules specify that the Colorado Department of Law publish a list of mechanisms that meet these requirements by January 1, 2024.
• Privacy Notices – The CPA requires that controllers provide specified information in an outward facing notice. Though the Colorado Rules do not require a stand-alone Colorado-specific notice, they detail that such privacy notices specify, among other things, which data subject rights are available for Colorado residents, as well as the express purpose for which each category of personal data is used.
• Loyalty Programs – The Colorado Rules include additional details on how companies operate loyalty programs and for how they may end loyalty benefits for customers who exercise data rights. The Colorado Rules also provide a list of disclosures that controllers must make regarding loyalty programs, along with examples for compliance.
• Consent Requirements – The Colorado Rules provide detailed requirements for obtaining consumer consent for certain processing activities, including guidance for processing sensitive data or making inferences with non-sensitive data. The Colorado Rules devote a great deal of coverage to dark patterns as well, detailing principles to consider when designing a user interface or choice architecture to obtain consent.
• Data Protection Assessments – The CPA requires the controllers conduct data protection assessments (DPAs) for processing activities that provide a “heightened risk of harm” for consumers (similar to California and Virginia). The CPA specifies that such activities requiring a DPA include processing sensitive data, selling personal data and processing personal data for purposes of targeted advertising or profiling if the profiling presents certain specified risks. The Colorado Rules also include detailed content requirements for DPAs, such as a description of the core purposes of the processing, how the benefits of processing outweigh the identified risks, as well as the timing of these assessments.

While similar in scope to the recently approved CPRA regulations, the Colorado Rules diverge in some key ways. For instance, unlike the Colorado Rules, the CPRA regulations include provisions on enforcement and third party processing, while the Colorado Rules include sections on data protection assessments and profiling that the CPRA regulations do not feature. It is also important to keep in mind that the CPA, and therefore the Colorado Rules, also apply to nonprofits, unlike all other state privacy laws.

Companies should begin familiarizing themselves with the Colorado Rules, and prepare to update their compliance programs accordingly.