California’s new data privacy law brings U.S. closer to GDPR

The requirements aren’t insignificant, and the fines could add up

Data privacy has become one of the defining business and cultural issues of our time.

Companies around the world are scrambling to properly protect their customers’ personal information (PI). However, new regulations have actually shifted the definition of the term, making everything more complicated. With the California Consumer Privacy Act (CCPA) taking effect in January 2020, companies have limited time to get a handle on the customer information they have and how they need to care for it. If they don’t, they not only risk being fined, but also loss of brand reputation and consumer trust — which are immeasurable.

California was one of the first states to provide an express right of privacy in its constitution and the first to pass a data breach notification law, so it was not surprising when state lawmakers in June 2018 passed the CCPA, the nation’s first statewide data privacy law. The CCPA isn’t just a state law — it will become the defacto national standard for the foreseeable future, because the sheer numbers of Californians means most businesses in the country will have to comply. The requirements aren’t insignificant. Companies will have to disclose to California customers what data of theirs has been collected, delete it and stop selling it if the customer requests. The fines could easily add up — $7,500 per violation if intentional, $2,500 for those lacking intent and $750 per affected user in civil damages.

Evolution of personal information

It used to be that the meaning of personally identifiable information (PII) from a legal standpoint was clear — data that can distinguish the identity of an individual. By contrast, the standard for mere PI was lower because there was so much more of it; if PI is a galaxy, PII was the solar system. However, CCPA, and the EU’s General Data Protection Regulation GDPR, which went into effect in 2018, have shifted the definition to include additional types of data that were once fairly benign. The CCPA enshrines personal data rights for consumers, a concept that GDPR first brought into play.

The GDPR states: “Personal data should be as broadly interpreted as possible,” which includes all data associated with an individual, which we call “contextual” information. This includes any information that can “directly or indirectly” identify a person, including real names and screen names, identification numbers, birth date, location data, network addresses, device IDs, and even characteristics that describe the “physical, physiological, genetic, mental, commercial, cultural, or social identity of a person.” This conceivably could include any piece of information about a person that isn’t anonymized.

With the CCPA, the United States is playing catch up to the GDPR and similarly expanding the scope of the definition of personal data. Under the CCPA, personal information is “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.” This includes a host of information that typically don’t raise red flags but which when combined with other data can triangulate to a specific individual like biometric data, browsing history, employment and education data, as well as inferences drawn from any of the relevant information to create a profile “reflecting the consumer’s preferences, characteristics, psychological trends, preferences, predispositions, behavior, attitudes, intelligence, abilities and aptitudes.”

Know the rules, know the data

These regulations aren’t checklist rules; they require big changes to technology and processes, and a rethinking of what data is and how it should be treated. Businesses need to understand what rules apply to them and how to manage their data. Information management has become a business imperative, but most companies lack a clear road map to do it properly. Here are some tips companies can follow to ensure they are meeting the letter and the spirit of the new regulations.

The regulatory landscape is constantly changing with new rules being adopted at a rapid rate.  Every organization needs to know which regulations they need to comply with and understand the distinctions between them. Some core aspects CCPA and GDPR share include data subject rights fulfillment and automated deletion. But there will be differences so having a platform that allows you to handle a heterogenous environment at scale is important.