The California Consumer Privacy Act of 2018: Summary and Comparison to GDPR

by Kramer Levin Naftalis & Frankel LLP
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On June 28, 2018, the California Consumer Privacy Act of 2018 (CCPA) was signed into law. The bill was drafted and passed quickly, just prior to a deadline for removing a similar initiative from the ballot that would have appeared before California voters in November. Many expect revisions to or guidance regarding the law to be promulgated prior to the CCPA’s entry into force on Jan.1, 2020. Nonetheless, businesses that will be subject to the law would be well advised to consider the process of bringing themselves into compliance sooner rather than later. Some businesses that will be regulated under the CCPA may also fall within the ambit of the European Union’s General Data Protection Regulation (GDPR), which became effective on May 25, 2018 (see our previous publication). This alert will examine the provisions of the CCPA, drawing comparisons with the GDPR where appropriate, in an effort to identify the steps covered entities may need to take as the implementation date for this important new law approaches.

Who Is Protected by the CCPA?

The CCPA will protect “consumers,” a term defined to include natural persons who are California residents. 1798.140(g). Like the GDPR, the rights granted under the law do not extend to legal persons like corporations. Art. 4(1).[1]

Who or What Is Regulated by the CCPA?

To come within the regulatory reach of the CCPA, a business must collect “personal information” from consumers, it must “do[ ] business” in California for profit or for the financial benefit of shareholders, and must meet or surpass one of the following three minimum thresholds:

  • $25 million in annual gross revenue
  • Buy, receive for commercial purposes, sell, or share for commercial purposes, the personal information of 50,000 or more consumers
  • Derive 50 percent or more of annual revenue from selling consumers’ personal information

1798.140(c).

“Personal information” is defined as “information that identifies, relates to, describes, is capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household.”  1798.140(o). The CCPA goes on to offer a nonexhaustive but extensive list of examples of data that qualify as personal information. The list includes:

  • Standard personal information, such as name, address, or government ID numbers
  • Commercial information including goods or services purchased by the consumer
  • Web-based information including browsing and search history
  • Geolocation data
  • Information related to a consumer’s employment or education
  • Inferences drawn from the above types of information to create consumer profiles

As in the CCPA, the definition of “personal data” in the GDPR is quite broad, encompassing most pieces of information that relate to an identifiable natural person. Art. 4(1). But in a notable difference from the GDPR, the definition of “personal information” in the CCPA excludes “publicly available information,” meaning information that is lawfully available through government records. In another difference, the GDPR identifies “special categories of personal data” that are entitled to extra protections, whereas the CCPA recognizes personal information as a single category that may be composed of different kinds of data. Art. 9. Note that the CCPA uses the statutorily defined term “business” to refer to the entities that will be regulated under the law, while the GDPR regulates the “controllers” who determine what personal data is collected and the “processors” who process personal data on behalf of controllers. Art. 4(7)-(8).

What it means to “do[ ] business” in California is not defined in the CCPA, though the term is generally understood broadly under other California statutes. For example, the California Revenue and Taxation Code, Section 23101, provides that a company is doing business in California if it is “actively engaging in any transaction for the purpose of financial or pecuniary gain or profit” in California.

It may also be worthwhile to observe that the scope of the CCPA is tethered to the locus of the consumer—that is, it is focused on protecting the rights of people resident in California. The CCPA is not concerned with the manner in which California-based businesses handle the personal data of non-Californian consumers. By contrast, the GDPR regulates businesses established in the EU, regardless of whether the personal data collected concerns EU citizens or not, as well as businesses located outside the EU that offer goods or services in the EU and process the data of EU citizens.

What Rights Does the CCPA Establish for Consumers?

Making reference to past breaches of consumer privacy and observing that “[p]eople desire privacy and more control over their information,” the CCPA grants California consumers new rights over the personal information collected about them by covered businesses. These rights in turn create responsibilities for those businesses that will be regulated under the law. The section below summarizes the rights granted to consumers under the CCPA and the steps businesses must take to ensure that these rights are protected.

Right to Know What Information Is Collected About You

The CCPA grants consumers the right to request that businesses disclose the “categories and specific pieces of personal information the business has collected” about them. 1798.100(a).

To effectuate this right, the CCPA places several affirmative obligations on regulated businesses. Before collecting a consumer’s personal information, a business must inform consumers of the categories of personal information that it collects about them. This will likely be accomplished through the business’s privacy policy (see section below). Businesses are prohibited from collecting personal information from a consumer that would fall outside of the categories of information that it discloses it collects about consumers. 1798.100(b).

Upon request, a business must disclose to a consumer:

  • The categories of personal information it has collected about the consumer
  • The categories of sources from which the personal information was collected
  • The business purpose behind collecting the personal information
  • The categories of third parties with whom the business has shared the information
  • The specific pieces of personal information it has collected about the consumer

1798.110(a).

This information may be provided to the consumer electronically or by mail. If transmitted electronically, the data “shall be portable” and, to the extent possible, provided “in a readily useable format that allows the consumer to transmit this information to another entity without hindrance.” 1798.100(d). Businesses are not, however, obliged to retain personal information for one-time transactions, so long as that information is not retained by the business or sold to a third party. The CCPA calls on the attorney general to adopt regulations concerning how businesses should verify consumer requests to ensure that businesses only share personal information with the consumer to whom the personal information relates. 1798.185(a)(7).

Like the CCPA, the GDPR allows data subjects to request information about the personal data that the controller has collected about them, though it distinguishes personal data obtained from the data subject and personal data obtained from outside parties. When personal data is collected from someone other than the data subjects, the GDPR grants data subjects the additional right to know from what sources the personal data originated. Art. 14. But the GDPR also identifies a number of situations in which controllers and processors need not share information with the data subject when the information was collected from an outside party, including if the data subject already has the information, where provision of the requested information would be “impossible or would involve a disproportionate effort,” where an EU member state provides for different rules that protect the data subject's legitimate interests, or where the personal data must remain confidential subject to “an obligation of professional secrecy” or a statutory obligation of secrecy. When it comes to requesting a copy of the personal information a controller or processor has obtained about a data subject, the GDPR makes no distinction—data subjects have the right to a copy of the personal data that was collected about them regardless of the source, with the caveat that this right “shall not adversely affect the rights and freedoms of others.” Art. 15.

Right to Request Deletion

The CCPA grants consumers the right to request that businesses delete any personal information about the consumer that the business has collected from the consumer. 1798.105. Note that the CCPA does not grant consumers the right to request that a business delete personal information obtained from someone other than the consumer.

To effectuate this right, the CCPA provides that regulated businesses must:

  • Inform consumers of their right to request deletion of information (see privacy policy section below). 1798.105(b).
  • Delete consumers’ personal information upon request and “direct any service providers to delete the consumer’s personal information from their records.” 105(c).

The CCPA does, however, indicate a number of circumstances in which a business need not comply with a consumer request to delete personal information. These include situations where the personal information is necessary to complete a transaction, to detect or prevent fraudulent activity, to comply with a legal obligation, or “[t]o enable solely internal uses that are reasonably aligned with the expectations of the consumer based on the consumer’s relationship with the business.” 1798.105(d).

The GDPR contains a similar provision, referred to as the “right to be forgotten,” allowing data subjects the right to have personal data concerning them deleted by the data controller under certain circumstances. Data subjects enjoy this right regardless of the source from which the data was obtained. Art. 17. As with the CCPA’s right to deletion, the GDPR’s right to be forgotten is cabined by several exceptions, allowing controllers to deny erasure requests when doing so is part of an exercise of free expression; is necessary for compliance with a legal obligation or the establishment, exercise or defense of legal claims; or when retaining the data is in the public interest. The GDPR also allows data subjects to request that controllers implement restrictions on the use of their personal data in certain circumstances, and requires businesses to notify any recipient to whom they have disclosed the subject’s personal data of any limitations or erasures requested by the subject that they have implemented. Art. 18-19.

Right to Request Disclosures About Personal Information That Is Sold

Californians have the right to request that businesses that sell consumer personal information, or that disclose personal information for a business purpose, provide information regarding these practices to the consumer upon request. 1798.115. The consumer may seek the following information from a business engaged in selling personal information:

  • The categories of personal information collected about the consumer
  • The categories of personal information that were sold, and the category or categories of third parties to whom the personal information was sold
  • The categories of personal information that the business disclosed about the consumer for a “business purpose”

Use of personal information for a “business purpose” is defined to mean use that is “reasonably necessary and proportionate to achieve the operational purpose for which the personal information was collected or processed.” The CCPA provides several examples of “business purpose[s],” including detecting security incidents, providing advertising or marketing services, processing payments, and other purposes. 1798.140(d). Businesses engaged in selling personal information are required to make affirmative disclosures to this effect, as explained in the privacy policy section below.

Right to Opt Out of the Sale of Personal Information

The CCPA also allows consumers to demand that businesses cease and desist from selling their personal information, referring to this ability as “the right to opt out.” 1798.120. The CCPA adopts an “opt in” framework where selling a child’s personal information is concerned: affirmative parental consent is required before the sale of personal information regarding a child under 13 years of age, while affirmative “opt in” consent is required by the consumer for consumers between 13 and 16 years of age. 1798.120(d). The GDPR generally requires parental consent for any processing of a subject’s data where the data subject is under 16 years of age. Art. 8. These provisions may be of special relevance for businesses operating in the social media space.

The GDPR does not focus directly on the potential sale of personal data to the same degree as the CCPA, whose drafters pointed specifically to Cambridge Analytica’s improper use of Facebook user data as a motivation for passage of the law. But the absence of specific language addressing the sale of personal information does not mean the GDPR has nothing to say on the subject. On the contrary, the GDPR requires controllers to inform data subjects of the recipients or categories of recipients that have received their personal data (Art. 13-15) and to inform recipients of personal data of any restrictions or erasures undertaken at the request of the data subjects (Art. 19). It also grants data subjects the right to object to the use of their personal data for direct marketing purposes. Art. 21. Most importantly, under the GDPR, any “processing” of personal data, which would include “disclosure by transmission” or “otherwise making available” personal data to a recipient, must be based on one of the six lawful grounds for personal data processing articulated in Article 6. To the extent that any sale of personal data was based on the consent of the data subject (consent being one of the lawful bases for processing included in Article 6), withdrawal of the data subject’s consent would render any subsequent sale unlawful under the GDPR.

Right to Be Free From Discrimination

Businesses are barred from discriminating against consumers that exercise their rights under the CCPA. 1798.125. Specifically, following a demand from the consumer to stop selling their personal information, a business may not:

  • Deny goods or services to the consumer
  • Charge different prices for goods or services
  • Provide a different quality of goods or services
  • “Suggest” that the consumer will receive a different price or quality of goods or services

The drafters of the CCPA, however, included a qualification to the non-discrimination provision. The CCPA provides that businesses may still charge “a consumer a different price or rate, or [provide] a different level or quality of goods or services to the consumer, if that difference is reasonably related to the value provided to the consumer by the consumer’s data.” 1798.125(a)(2). In other words, a business may provide a different level of service or charge a different price if a limitation imposed by the consumer on the use of his or her personal information affects the business’s ability to provide a good or service to the consumer. The CCPA also provides that businesses may offer incentives to consumers for the collection or sale of personal information, though these financial incentives may not be “unreasonable” and are subject to an “opt in” from consumers that they may revoke at their will. 1798.125(b).

What Should Businesses Include in a Privacy Policy?

Consistent with its nature as a disclosure statute, the CCPA includes a requirement that businesses describe the rights of consumers in a privacy policy or on the business’s website. 1798.130(5). The privacy policy must contain: 

  • A description of consumers’ right to request disclosures regarding the personal information that has been collected about them, including the specific pieces of personal information the business has collected
  • A description of consumers’ right to request information about any sale or disclosure of their personal information
  • A statement of consumers’ protection against discrimination in the event that a consumer exercises any of their rights under the CCPA
  • A list of the categories of personal information collected about consumers in the past 12 months. The CCPA directs that the categories of information track the types of “personal information” listed in the statutory definition of that term (name, address, browsing or search history, etc.). 1798.140(o).
  • A list of the categories of personal information it has sold in the preceding 12 months or an affirmation that the business has sold no personal information
  • A list of categories of personal information it has disclosed about consumers for a business purpose in the preceding 12 months or an affirmation that the business has made no such disclosures

While the GDPR does not require businesses to implement a privacy policy per se, regulated controllers and processors are required to plainly convey to data subjects a variety of information regarding the use of their personal data, including the purposes of processing personal data, any sharing of personal data with third parties, the period for which personal data will be stored, and the right to request access to or deletion of personal data. Thus, as a practical matter, both laws require substantial disclosures to the consumer, whether or not they are contained in a document (or on a webpage) specifically designated as a “privacy policy.”

How Should a Business Field Requests From Consumers?

As discussed above, the CCPA requires that businesses field requests from consumers about their personal information. To facilitate these interactions, the CCPA mandates that covered businesses establish two means by which consumers may make requests under the CCPA. These must include a toll-free telephone number and, if the business maintains a website, a URL where requests may be made. 1798.130(1). Information properly requested by a consumer under the CCPA must cover the preceding 12-month period and be delivered, free of charge, within 45 days of the request. Those businesses that sell personal information must maintain a “clear and conspicuous link” titled “Do Not Sell My Personal Information” on its webpage, and link to that page in any online privacy policy or specific description of the rights of California consumers. 1798.135. The link should deliver consumers to a webpage where they may opt out of the sale of their personal information.

How Is the CCPA Enforced?

The CCPA permits private individuals to sue in the event of any unauthorized “exfiltration, theft, or disclosure” that results from the regulated business’s failure to “implement and maintain reasonable security procedures and practices appropriate to the nature” of the personal information they hold. 1798.150. Should such a situation arise, private plaintiffs may recover:

  • The greater of $750 per consumer per incident, or actual damages
  • Injunctive or declaratory relief
  • Any other relief the court deems proper

The CCPA does, however, place limits on private plaintiffs’ ability to bring claims. Any individual pursuing this course must notify the business of the specific provisions of the CCPA the consumer believes were violated and give the business 30 days to “cure” the violations. In the event the business succeeds in curing the violations, notifies the consumer, and assures him or her no further violations will occur, no individual or class-wide damages may be pursued. Consumers seeking only “actual pecuniary damages” as a result of a breach are not required to provide this notice. 1798.150(b)(1).

Once a private action has been initiated, plaintiffs must notify the attorney general within 30 days of filing a claim. Upon receipt of this notice, the attorney general may allow the private plaintiff to proceed, pursue his or her own enforcement action, or decide that the private plaintiff may not proceed with the action. 1798.150(b)(3). The CCPA also empowers the attorney general to pursue civil penalties against businesses that intentionally violate the law. Penalties for intentional violations may be assessed at up to $7,500 per violation. 1798.155(b).

Importantly, the CCPA insulates a business from liability when it shares personal information with a service provider and the service provider uses the personal information in violation of the CCPA, so long as the business had no reason to believe that the service provider intended to commit a violation. Reciprocally, the CCPA relieves service providers of liability for any violations committed by the business that collected the personal information. 1798.145(h).

The GDPR takes a different approach to enforcement, calling on each EU member state to establish its own Data Protection Authority (DPA) endowed with the power to issue fines for violations of the GDPR. The GDPR itself guarantees data subjects the right to an “effective judicial remedy” when their rights have been violated, regardless of the particular enforcement powers or actions of an individual DPA. Art. 78-79. Both the GDPR and CCPA grant individuals whose data privacy rights have been violated the right to seek compensation, though recovery can be obtained under the CCPA only in the event of a breach. Neither law appears to require proof of actual damage—the GDPR allows individuals to receive compensation for both “material and non-material damage,” while the CCPA leaves room for private suits regardless of actual damage in providing for damages of up to $750 per consumer per data breach “or actual damages, whichever is greater.”  Art. 82; 1798.150.

General Exceptions to the CCPA

The CCPA carves out a variety of special contexts in which its provisions will not apply. Several exceptions relate to legal obligations, providing that the requirements of the CCPA will not restrict a business’s ability to comply with federal or state laws or with civil or criminal process, exercise or defend legal claims, or maintain privileged communications. Nor does the CCPA apply to health information collected by entities covered under laws and regulations concerning medical and health insurance information, personal information sold to or by a consumer reporting agency if the information will be used in a consumer report, or personal information collected pursuant to the Gramm-Leach-Bliley Act or the Driver’s Privacy Protection Act. 1798.145.

Overall Comparison to GDPR

While the GDPR and CCPA both seek to protect personal privacy, they differ from one another in important respects. At a fundamental level, the CCPA is a statute about disclosure and transparency. It requires businesses to proactively disclose to consumers the kinds of personal information that they collect and to tell consumers if they plan to sell consumers’ personal data. It gives consumers the right to request the specific personal data that businesses have collected about them, to request that the information be deleted, and to opt out of the sale of their personal information to third parties. Though the liability portion of the statute subjects covered businesses to lawsuits when their failure to “implement and maintain reasonable security procedures and practices” results in the unauthorized disclosure of personal information, the CCPA has relatively little to say about what security procedures and practices are “reasonable.”  

As a more comprehensive, “General” regulation, the GDPR goes into greater detail as to how personal data should be protected, containing an entire chapter addressing the measures that data controllers and processors may need to adopt to maintain the security of personal data. The GDPR provides that data controllers and processors of significant size generally must maintain specific records regarding their processing of personal data (Art. 30), use encryption where appropriate (Art. 32), undertake data protection impact assessments prior to using personal data in new ways that may pose a risk to the privacy of data subjects (Art. 35), and must designate a data protection officer where the controller or processor processes personal data on a large scale (Art. 37). The GDPR also grants rights to consumers that the CCPA does not. The GDPR gives data subjects the right to request that those who control their personal information rectify any mistakes contained therein (Art. 16), the right to request that restrictions be placed on the use of their data instead of outright deletion (Art. 18), and requires businesses to report data breaches to the relevant DPA and to affected data subjects (Art. 33-34).

Thus, in most respects, the CCPA is relatively more modest than the GDPR. It focuses on disclosure, whereas the more ambitious GDPR provides data subjects more rights and imposes more obligations on data controllers and processors.

Conclusion

The CCPA will not enter into force for well over a year, but given the technological and compliance-related measures covered businesses may be obliged to undertake, it’s not too soon to consider preparations. Businesses that are subject to the GDPR and have sought to comply with its provisions may already have satisfied the CCPA’s requirement that businesses implement and maintain reasonable security procedures and practices designed to secure personal information. They are also likely to have already disclosed much of the information that is required under the CCPA. However, given the particularities of the CCPA, even those businesses that are fully in compliance with the GDPR will likely need to take additional measures to satisfy the provisions of the CCPA when it becomes operative in 2020. Businesses should begin to evaluate whether they are subject to the CCPA, identify steps that will be required to comply with its provisions, and stay tuned for guidance or regulations concerning the CCPA from the California attorney general.

 


[1] References to the GDPR appear as citations to articles (Art.).  References to the CCPA appear as citations to the provisions added to California Civil Code at section 1798 by the CCPA.

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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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Updated: May 25, 2018:

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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.

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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.