Does The CCPA Apply To Your Business?

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The California Consumer Privacy Act (CCPA), considered the most expansive U.S. privacy laws to date, is set to take effect January 1, 2020. In short, the CCPA places limitations on the collection and sale of a consumer’s personal information and provides consumers certain rights with respect to their personal information. Wondering whether they will have to comply, many organizations are asking if the law will apply to them, hoping that being too small, being located outside of California, or “only having employee information,” among other things, might cause them not to have to gear up for CCPA.

So, we thought we would dig in a little deeper into the question of when the CCPA might apply to a business. However, note that the law is still developing as amendments work their way through the legislature and we await regulations from the California Attorney General intended to further clarify the statute. Organizations will need to continue to monitor these developments to determine if the CCPA will apply to them.

Basic Rule. In general, the CCPA applies to a “business” that:

A. does business in the State of California,

B. collects personal information (or on behalf of which such information is collected),

C. alone or jointly with others determines the purposes or means of processing of that data, and

D. satisfies one or more of the following

(i) annual gross revenue in excess of $25 million,

(ii) alone or in combination, annually buys, receives for the business’s commercial purposes, sells, or shares for commercial purposes, alone or in combination, the personal information of 50,000 or more consumers, households, or devices, or

(iii) derives 50 percent or more of its annual revenues from selling consumers’ personal information.

Related entities and non-for-profits. Under the CCPA, a “business” can be a “sole proprietorship, partnership, limited liability company, corporation, association, or other legal entity that is organized or operated for the profit or financial benefit of its shareholders or other owners.” Thus, for example, a business under this definition generally would not include a not-for-profit or governmental entity. It also would not include a corporation that meets all of the prongs above, other than those listed under D.

However, a “business” under CCPA also includes any entity that controls or is controlled by a business that meets the requirements above and that shares common branding with such a business. “Control,” for this purpose, means either (i) ownership of, or the power to vote, more than 50 percent of the outstanding shares of any class of voting security of a business; (ii) control in any manner over the election of a majority of the directors, or of individuals exercising similar functions; or (iii) the power to exercise a controlling influence over the management of a company. “Common branding” means a shared name, servicemark, or trademark. Accordingly, organizations that would not themselves be a “business” under the CCPA could become subject to the law because of the entities that control them or that they control, and with which they share common branding.

Businesses that do not collect “consumer” personal information. It does not appear to be necessary under the CCPA for a business to actually be the one to collect personal information from consumers in order for the law to apply. So long as personal information is collected on behalf of a business (such as through a third party), the business could be covered by the CCPA, assuming the other requirements are satisfied.

Some businesses also may believe that because they do not engage in transactions directly with individual consumers and collect their personal information, they are not subject to the law. The businesses might be thinking this is because their “consumers” are other businesses and not individuals. However, a consumer under the CCPA generally means a natural person who is a California resident. Accordingly, when conducting business with other businesses, a business likely collects personal information from contacts at those other businesses. Similarly, virtually all businesses collect information about their employees. Recent legislative activity indicates that obligations under the CCPA may continue to extend to employee personal information.

Businesses located outside of California. It also does not appear that a business will need to be located in California in order to be subject to the CCPA. While the CCPA is not clear on this point, a business may be considered to be “doing business” in California if it conducts online transactions with persons who reside in California, has employees working in California, or has certain other connections to the state, and is without a physical location in the state. As noted, regulations may help to clarify what “doing business in California” means for purposes of the CCPA.

Businesses that process information on behalf of other businesses. The definition of a business under the CCPA requires that the business must alone or jointly with others “determine the purposes or means of processing” of that data. The CCPA does not expand on this language. However, since nearly identical language in the General Data Protection Regulation (GDPR) is used to define a controller, guidance from the UK’s Information Commissioner may provide some insight – here are some questions you might ask to see if your organization is a controller:

  • The business decides to collect or process the personal data.
  • The business decides what the purpose or outcome of the processing is to be.
  • The business decides what personal data should be collected.
  • The business decides which individuals to collect personal data about.
  • The business obtains a commercial gain or other benefit from the processing, except for any payment for services from another controller.
  • The business decides processes the personal data as a result of a contract between the business and the data subject.
  • The business exercises professional judgement in the processing of the personal data.
  • The business has a direct relationship with the data subjects.

An organization that merely processes personal information for businesses covered by the CCPA might take the position that it is not subject to the CCPA. That organization may be correct, however, its business partners that are subject to the CCPA may be required to push certain CCPA obligations down to the organization by contract.

Consequences of Non-compliance. Organizations on the fence about the application of the CCPA should consider what happens if they fail to comply but are determined later to be subject to the law. A business that violates the CCPA can face injunctions and penalties of not more than $2,500 for each violation, and not more than $7,500 for each intentional violation, in an action brought by the California Attorney General. That said, a business is provided 30 days after receiving written notice of noncompliance to cure the violation, before facing liability. In addition, the CCPA provides consumers a private right of action if their nonencrypted or nonredacted personal information is subject to an unauthorized access, exfiltration, theft, or disclosure because the covered business did not meet its duty to implement and maintain reasonable safeguards to protect that information.  That private action includes statutory damages in an amount not less than one hundred dollars ($100) and not greater than seven hundred and fifty ($750) per consumer per incident or actual damages, whichever is greater.

A recently survey by ESET found that over 44% of the 625 business owners and company executives polled had never heard of CCPA, and only 11.8% knew if the law applied to their business. Organizations should be doing their best to determine if they have CCPA obligations either directly as a business, because they control or are controlled by a business, or because they have contractual obligations flowing from a business. Efforts toward compliance need to begin now as the CCPA becomes effective January 1, 2020.

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.

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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.

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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.

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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:

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How We Protect Your Information

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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.

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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.

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  • 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

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How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

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

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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:

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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.

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