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The Green Sheet Online Edition

September 10, 2018 • Issue 18:09:01

Overview of the California Consumer Privacy Act

By Josh Herndon
Global Legal Law Firm

On June 28, 2018, California enacted the California Consumer Privacy Act of 2018. In 2020, when the act takes effect, it will apply to all businesses that sell to California consumers; have annual gross revenues at least $25 million; derive 50 percent or more of their annual revenues from selling consumers' personal information; or buy, receive, sell or share personal information of 50,000 or more consumers annually.

The act allows consumers to get all the data a business has collected on them and to whom the data has been sold. Although most people understand their online activity is being tracked for targeted advertising, they don't have a broad understanding of what data's being used. Consumers will be allowed to ask for a detailed list under the act.

The act also allows consumers to prevent businesses from selling their information and to request that a business delete their personal information. In sum, the act imposes a huge burden on businesses.

The silver lining

The act may create new business opportunities. It will allow businesses to offer services or rates to consumers based on the information consumers provide or decline to provide. For example, a business will be allowed to give a consumer who allows the business to sell their data free access to a service; the business will also be allowed to require a consumer who doesn't allow the business to sell his or her data to pay a fee to use the same service. Incentivized consumers may voluntarily allow businesses to sell their data, which would benefit businesses by allowing them to benefit from the use of the data while also reducing what it must do to comply with the act with respect to such consumers.

Under the act, damages to consumers will top out at $750 per person in each instance where the act is violated. The highest penalty per violation that can be levied against companies will be $7,500. Businesses will be given 30 days to address and fix a violation before being fined. Also, although the California attorney general will be in charge of deciding whether to pursue legal action against companies for violating the Act, consumers will be allowed to sue under the act even if the California attorney general doesn't pursue the case.

The act will undoubtedly get more attention as 2020 draws near. In the meantime, and as other states adopt similar legislation, businesses should update their privacy policy and terms and conditions to reflect the requirements under the act. end of article

Josh Herndon is an attorney at the Global Legal Law Firm, whose attorneys are well recognized as top payments industry experts. Herndon works in the compliance field helping electronic payment companies avoid violating rules, as well as avoid being fined, arrested or sued from internal or external threats. He is also involved in litigation in the payments space. He can be reached at jherndon@attorneygl.com.

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