Rigid New Privacy Law Will Require Significant Change to How Companies Obtain Consumer Data

California made history recently by passing the California Consumer Privacy Act after unanimous agreement between the California State Assembly and State Senate. While the new 2018 law will not take effect until 2020, both consumers and technology companies in California are deeply concerned about what the new law entails.

With the passage of the California Consumer Privacy Act, California now boasts the most stringent data privacy protection laws in the United States. As such, the state government chose to specifically postpone full enactment of the law until 2020 in order to give both consumers and companies significant time to understand the new rights, expectations, and responsibilities for both communities.

Data Privacy Law Intended to Give Consumers Control

California legislators state that their intention in passing the law was to give consumers much more significant control over the dissemination, collection, and sale of their personal data online. Specifically, the California law targets technology companies like Facebook and Google, intending to force such companies to be more transparent with how they handle consumers’ sensitive personal information. The law also emphasizes that consumers have a right to know not only what information the companies are collecting but the reasons why they are collecting such information in the first place. The law also states that consumers have the right to know the identities of the third parties that technology companies like Facebook or Google sell or share the data with. The new law also gives consumers the right to prohibit technology companies from selling their data and now requires that children under 16 opt into allowing the collection of their data at all.

Loopholes in California Consumer Privacy Act Could Be Costly to Consumers

While many privacy advocates applaud the passage of the new law, experts still express concern over some significant loopholes. For example, technology companies may get around the prohibition of selling a consumer’s personal information by simply choosing to “share” it at no cost instead. The law also allows companies to actually change a monetary fee to consumers who ask to opt-out.

This last wrinkle has staunch privacy advocates especially concerned that such precedent will create a slippery slope of companies raising the opt-out price to be too high for consumers to pay. Overall, while the California Consumer Privacy Act is nowhere as strict as the General Data Protection Requirements of the European Union’s new privacy laws, California’s new law stands as the most stringent privacy law currently on the books in the United States. As technology continues to innovate and consumers become more privacy-savvy, experts in the field expect to see many changes and amendments to the law before it is formally adopted in 2020.

For more information on this topic, please visit our Data Privacy service page, which is part of our Technology & Data Practice.

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