Is New York Next? A Comprehensive Consumer Privacy Bill Reintroduced

Jackson Lewis P.C.

On May 13th, New York State Senator Kevin Thomas, Chair of NY’s Consumer Protection Committee, reintroduced the New York Privacy Act (“NYPA”), a comprehensive consumer privacy law similar in kind to the California Consumer Privacy Act (“CCPA”), California Privacy Rights Act (“CPRA”), and Virginia’s Consumer Data Protection Act (“CDPA”).  The NYPA had been introduced in a previous legislative session back in 2019, but failed to move forward in the legislative process.

This version of the NYPA is in some respects less ambitious than the prior version.  For example, the latest version removed the bill’s broad application to any “legal entities that conduct business in New York” or that produce products or services that “intentionally target” New York residents, which would have meant that small-to-medium size businesses, and potentially even not-for-profits, would have been subject to the law. Nevertheless the NYPA surpasses the CCPA and CDPA in some important respects, including by requiring data controllers to:

  • collect opt-in consent from consumers before processing their personal data for any purpose;
  • provide detailed disclosures about the activities of outside parties to whom they disclose personal data;
  • respond to consumer requests to correct personal data; and
  • make disclosures about their automated decision-making activities, afford consumers the opportunity to challenge automated decisions, and conduct and publish assessments on the impacts of their automated decision-making processes.

The NYPA would also impose on data controllers duties of loyalty and care – the latter of which would require an annual risk assessment of all of the data controller’s data processing activities – and take direct aim at targeted advertising and data sales, declaring that these activities “shall not be considered processing purposes that are necessary to provide services or goods requested by a consumer.”

“Consumers should have a right to choose if and how their personal information is collected and used by companies,” said Senator Thomas in his reintroduction of the NYPA. “And New Yorkers deserve to know that businesses who are collecting, processing and protecting their personally identifiable information are doing so ethically and responsibly. The New York Privacy Act will set new, groundbreaking standards for comprehensive privacy legislation by advancing consumer privacy rights and creating stronger industry standards that empower businesses to enhance consumer confidence by putting privacy and security front-and-center.”

Below is a rundown of the NYPA’s key components:

  • Application: The NYPA would apply to legal persons that conduct business in New York State or produce products or services intentionally targeted to residents in New York State and that satisfy at least one of the following thresholds:
    • have annual gross revenue of $25M or more;
    • control or process personal data of at least 100,000 New York residents;
    • control or process personal data of at least 500,000 persons nationwide, at least 10,000 of whom are New York residents; or
    • derives over 50% of its gross revenue from the sale of personal data, and controls or processes personal data of at least 25,000 New York residents.
    • Exempt: Exempted from the NYPA are state and local governments, and personal data that is regulated by HIPAA, HITECH, FERPA, DPPA, GLBA and notably, “data sets maintained for employment records purposes, for purposes other than sale”.
  • Personal Data: Similar to the CCPA and CDPA, the NYPA defines personal data broadly to include “any data that is identified or could reasonably be linked, directly or indirectly, with a specific natural person, household, or device”. That said, unlike the CPRA,  CDPA or GDPR, the New York bill does not include a category for “sensitive data” to which heightened protections apply.
  • Consumer: The NYPA defines “consumer” as “a natural person who is a resident of New York acting only in an individual or household context.” The NYPA states that the definition of consumer does not include a “natural person acting in a commercial or employment context.”
  • Consumer Rights: The NYPA provides consumers a broad set of rights over their personal data, including the rights to:
    • receive clear notice of how their data is being used, processed and shared;
    • provide or withhold consent for the processing of their data for any purpose;
    • access and obtain a copy of their data in a commonly used electronic format, with the ability to transfer it between services;
    • correct inaccuracies in their data;
    • delete their data; and
    • challenge certain automated decisions.
  • Notice to Consumers: Under the NYPA, data controllers must provide written notice to consumers when processing their personal data in an “easy-to-understand language at an eighth-grade reading level or below.” This notice must include a description of the consumers’ rights, the categories of personal data processed, the sources of that data, the purposes for which the data is processed, and the identities of all outside parties to whom the data is disclosed, as well as information about how those parties will use the data and how long they will retain it. The notice must be dated with its effective date and updated at least annually. The notice (as well as each version of the notice dating back six years) must be made readily available to consumers
  • Non-Discrimination: The NYPA prohibits discrimination against a consumer who exercises their rights under the law. For example, a business may not target the consumer by denying goods or services or charging a higher price.
  • Data Broker Registry: The NYPA requires data brokers to register, pay an annual fee to the Attorney General, and submit information regarding their data use practices and contact information. The Attorney General must maintain a data broker registry on its website. Additionally, controllers must annually submit a list of all known data brokers or persons reasonably believed to be data brokers with whom the controller provided personal data in the preceding year and can only share personal data with data brokers that are properly registered.
  • Data Security: At least annually, under the NYPA, data controllers are required to conduct and document risk assessments of all current processing of personal data. In addition, data controllers must develop, implement, and maintain reasonable safeguards to protect the security, confidentiality and integrity of the personal data of consumers including adopting reasonable administrative, technical and physical safeguards appropriate to the volume and nature of the personal data at issue. The NYPA also imposes requirements related to data retention, data disposal and vendor management.
  • Enforcement and Private Right of Action: The NYPA authorizes the Attorney General to bring an action or special proceeding whenever it appears that a person has engaged or is about to engage in a violation of the law, with civil penalties of not more than $15,000 per violation (each instance of unlawful processing counts as a separate violation). And unlike comparable state laws, the NYPA would grant consumers a private right of action to enjoin violations of their rights under the law and to seek the greater of actual damages or liquidated damages in the amount of $1,000, along with attorney’s fees.  Contrary to other state consumer privacy bills introduced of late, such as Florida’s recently failed HB 969 or New York’s Biometric Privacy law, an organization found to have violated the NYPA does not have the opportunity to cure the violation before facing enforcement actions or litigation.

States across the country are contemplating ways to enhance their data privacy and security protections, with New York playing a leading role.  In addition to the reintroduction of the NYPA, there are other consumer privacy bills under consideration by the New York state legislature, and the New York City Council recently passed a data privacy bill that would impose rigorous requirements on owners of “Smart Access” buildings, and also created biometric information collection requirements for retail and hospitality businesses similar in kind to Illinois’s infamous Biometric Information Privacy Act (“BIPA”). Organizations, regardless of their location, should be assessing and reviewing their data collection activities, building robust data protection programs, and investing in written information security programs.

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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