California Consumer Privacy Act (CCPA) & California Privacy Rights Act (CPRA)

As a long-time leader in protecting citizen confidentiality, it’s no surprise that the California Privacy Protection Agency pioneered landmark regulations, key consumer rights, and business obligations to ensure consumer data privacy.

Introduction to CCPA and CPRA

The California Consumer Privacy Act (CCPA), as amended by the California Privacy Act (CPRA), was the first comprehensive consumer privacy legislation in the US. It has had a significant impact, changing how companies do business in a data-driven world.

The two Acts represent groundbreaking milestones in consumer rights in California and beyond, granting residents unprecedented control over their personal information. The CCPA effective date of 2020 represented the state’s initial response to growing concerns over data misuse. It offered consumers various rights over their personal data, including the right to know what is collected, how it’s used, and with whom it’s shared.

The CPRA, passed in 2020 and put into effect in 2023, builds on the CCPA’s foundation, introducing more stringent privacy protections and additional business responsibilities. Together, the laws provide consumers with tools that allow them to manage their personal data while ensuring transparency and accountability for businesses operating in California.

Who Must Comply with CCPA/CPRA?

Any business meeting one or more of the following criteria must comply with the CCPA/CPRA:

• It has gross annual revenues of over $25 million.
• It buys, receives, or shares personal information from 100,000 or more California residents or households annually.
• It derives 50% or more of its annual revenue from selling consumers’ personal information.

It is not only large corporations that must comply with the laws. Small businesses meeting these thresholds must also adhere to CCPA/CPRA standards. Companies operating outside California must also comply if they handle California residents’ data.

Which Businesses Require CCPA Certification?

CCPA certification is a voluntary program businesses can use to demonstrate to customers and stakeholders their CCPA compliance. It shows they take data privacy and the California Protection Act seriously and are committed to protecting consumer data. It can also help them reduce the risk of fines and penalties for non-compliance and enhance their reputation as a responsible and ethical organization.

The certification process includes a comprehensive assessment of a business’s data privacy practices and policies to ensure its compliance.

CCPA vs. CPRA

CPRA reflects California’s ongoing commitment to improving consumer privacy laws in response to rapid technological advancements. While the CCPA was a major step forward, it left certain gaps that needed to be addressed.

When the CCPA went into effect, many privacy advocates and businesses agreed it was a foundational law that would likely require further refinement. A lack of strong enforcement mechanisms, ambiguities around the sale of personal information, and the need for more consumer rights eventually led to the CPRA’s creation which enhances consumer protections by:

1. Expanding existing consumer rights and adding new ones, such as the right to correct inaccurate personal data.
2. Introducing the concept of “sensitive personal information” to cover data categories requiring better protection.
3. Creating the California Privacy Protection Agency (CPPA), an independent body dedicated to enforcing privacy regulations.

CCPA and CPRA’s Global Influence

CCPA and CPRA have sparked privacy conversations across the US, with several states drafting or enacting similar legislation. The CPRA also brings California’s laws more in line with global standards, such as the EU’s General Data Protection Regulation (GDPR). In an increasingly global marketplace, laws like the CPRA are motivating companies to rethink their data privacy practices. By requiring businesses to adopt more stringent data protection measures, California’s regulations have set a precedent that could inspire future federal privacy laws in the United States.

Key Definitions under CCPA/CPRA

Understanding CCPA and CPRA terminology is critical to ensuring compliance. Important definitions businesses and consumers should know include:

• Consumer. A natural person who is a California resident, including those living in California temporarily.
• Personal information. Any information that identifies, relates to, describes, or can be associated with an individual consumer, such as names, addresses, IP addresses, and biometric data.
• Sale of personal information. Selling, renting, releasing, disclosing, or otherwise communicating personal information to another business or third party for monetary or other valuable considerations.
• Sensitive personal information. A subset of personal information that includes Social Security numbers, driver’s license numbers, financial account information, health information, and precise geolocation data.
• Business purpose. The use of personal information for operational purposes, including auditing, detecting security incidents, fulfilling service requests, and processing payments.
• Service provider. A business that processes personal information on behalf of another company and is subject to specific contractual obligations to use the data only for specified purposes.

Understanding these definitions allows organizations to better assess their data practices and ensure CCPA and CPRA compliance while helping consumers understand their rights.

Key Consumer Rights under CCPA/CPRA

CCPA and CPRA are designed to give consumers greater control over their personal information. Key rights under the regulations include:

1. Right to Know. Consumers can submit a CPRA request to access information on what personal data a business collects, the purpose for collecting it, and whether the information has been sold or shared. They can also request a list of any third parties receiving their personal information.
2. Right to Delete. Consumers can request deletion of their personal information, with some exceptions. For instance, businesses are permitted to retain information if necessary to complete a transaction, fulfill a legal obligation, or for internal business purposes, such as detecting security incidents.
3. Right to Opt-Out of Sale. Consumers can direct businesses to stop selling their personal information to third parties. A business must provide an easy-to-access opt-out mechanism, such as a “Do Not Sell My Personal Information” link on their website.
4. Right to Correct. Introduced under the CPRA, consumers can now request that businesses correct inaccurate personal information, strengthening their control over data and ensuring businesses maintain accurate records.
5. Right to Data Portability. Consumers can request their personal data in a format that enables easy transfer to another service, something particularly important for individuals switching between services.

Key Amendments Introduced by CPRA

The CPRA introduces critical amendments to the CCPA, addressing gaps and expanding the initial Act’s scope. Some of the most significant changes brought about by the CPRA are:

• Expanded consumer rights. The CPRA enhances existing rights by clarifying provisions related to data access, deletion, and portability. For example, businesses must now honor a consumer’s request to limit the use of sensitive personal information, including Social Security numbers, biometric data, and precise geolocation.
• Creation of the California Privacy Protection Agency. The CPPA is an independent regulatory body responsible for enforcing the CPRA. It is authorized to audit businesses, investigate potential violations, and levy CCPA fines of up to $7500 for intentional violations. It also ensures California has the resources needed to enforce its privacy laws more effectively.
• Stronger data security obligations. Companies are now required to implement reasonable security measures to protect personal information from unauthorized access, destruction, or disclosure, including encryption, access controls, and security audits.
• Data retention policies. Businesses must disclose how long they plan to retain a consumer’s personal information. Data retention limits ensure organizations cannot store data indefinitely; rather, they must implement retention schedules aligned with business needs and legal requirements.
• Increased accountability for service providers. Service providers, contractors, and third parties that process personal data on behalf of businesses must adhere to the same data protection standards as the businesses and ensure compliance through contractual obligations.

How to Achieve CCPA/CPRA Compliance

Achieving CCPA and CPRA compliance requires businesses to adopt a proactive and structured approach to data management that helps them avoid hefty fines while fostering trust among consumers. Steps businesses should take to comply with these regulations include:

Conduct a Data Inventory and Mapping

The first step is understanding what personal data your business collects, where it’s stored, and how it’s used. Conducting a thorough data inventory helps map your business’s data flow and identifies areas where practices need adjustment. Tools like data discovery software and privacy management platforms can assist in this process, helping businesses visualize their data ecosystem. For instance, an eCommerce company might need to map out how customer data moves from checkout to marketing systems, ensuring it knows precisely where personal information is stored and processed.

Update Privacy Policies

Regular reviews and privacy policy updates ensure compliance with the latest regulations. The updates should clearly explain how the business collects, uses, shares, and retains personal information. Privacy policies must outline a consumer’s rights and provide information on how they can exercise them.

Develop a Consumer Request System

CCPA and CPRA grant consumers the right to request access to, deletion of, or correction of their personal information. Businesses should implement a clear process for handling these requests, including:

• A system to verify the identity of the consumer making the request.
• Procedures for tracking and fulfilling requests within the legal timeframe of 45 days.
• Methods for delivering the requested data securely. For instance, a healthcare provider must implement a secure portal where patients can request access to their medical records and track their deletion or portability requests.

Employee Training

Compliance relies on much more than technology and policies. It also requires that employees, especially those handling customer data, be trained in privacy best practices. Team members should be familiar with the company’s data privacy policies and trained to handle consumer requests effectively. Regular training sessions help ensure that privacy becomes a part of the company culture, reducing the risk of unintentional violations.

Review Contracts with Third Parties

Many businesses share personal data with third-party service providers or contractors. CPRA compliance requires reviewing third-party agreements to ensure they adhere to the same privacy standards. Contracts should include provisions for data protection and outline each party’s responsibility for safeguarding personal information and regulatory compliance.

Enhance Data Security

Investing in data security measures is critical to achieving compliance with CCPA/CPRA. Businesses should implement security technologies such as encryption, multi-factor authentication, and access controls to protect personal data. Regular security audits and assessments help identify vulnerabilities and strengthen defenses against data breaches.

How CCPA/CPRA Impact Businesses and Consumers

The CCPA and CPRA have profoundly impacted both businesses and consumers, reshaping the data privacy landscape in California and beyond. Below are some of the most significant ways the laws have influenced business and consumer behavior.

Impact on Businesses

1. Operational changes. CCPA and CPRA compliance has required many businesses to undergo significant operational adjustments. Companies have needed to invest in privacy management tools, hire legal and compliance experts, and overhaul their data practices. The introduction of data minimization has led businesses to rethink how much personal data they collect, ensuring they gather only the information necessary for their operations. For example, retailers must now balance personalized marketing with data privacy, finding ways to engage customers without violating privacy laws.
2. Increased compliance costs. CCPA and CPRA compliance can be costly, particularly for small and medium-sized businesses. The costs related to updating privacy policies, implementing security measures, and responding to consumer requests can add up quickly. However, these investments are a must to avoid even steeper non-compliance penalties.
3. Reputational risks. CCPA/CPRA non-compliance can lead to reputational damage in addition to fines. Digitally-savvy consumers are increasingly aware of their privacy rights. A business caught mishandling data could suffer long-term damage to its brand’s image. Many companies now use compliance as a selling point, promoting their commitment to consumer privacy to build trust and differentiate themselves from the competition.

Impact on Consumers

1. Empowerment through transparency. Consumers now have more control over their personal data, empowering them to make informed choices about who has access to their information and how it is used. This transparency enables them to understand the data collection and sharing practices of the businesses they interact with. This can lead to stronger business/customer relationships, as consumers are more likely to trust businesses that are transparent about their data practices.
2. Increased data privacy awareness. Consumer awareness of data privacy has skyrocketed since the CCPA’s introduction. People are more knowledgeable about their rights and are increasingly exercising them by opting out of data sales, requesting data deletion, or demanding corrections to inaccurate information.
3. Better data security. The CPRA’s stricter data security requirements help ensure that a consumer’s personal information is better protected. This has reduced the risk of data breaches and identity theft, offering peace of mind to consumers in an increasingly digital world.

Future of Privacy Laws: What Comes Next?

Data privacy will remain a major concern and top priority for businesses and consumers alike. The success of the CCPA and CPRA makes it likely that additional states will adopt similar legislation in the coming years. States like Virginia, Colorado, and Utah have already passed their own privacy laws, using California’s groundbreaking regulations as inspiration. The growing patchwork of state laws could eventually lead to the creation of a federal privacy law, which would establish a unified standard for data privacy across the country.

Technological advancements, including artificial intelligence and machine learning, will likely prompt further privacy law updates. As these and other advanced technologies become more integrated into business operations, new privacy risks will likely emerge that require lawmakers to revise existing regulations.

To meet these challenges, organizations must remain vigilant and flexible, continually updating their data privacy practices to maintain compliance with evolving laws and meet consumer expectations. In this way, the CCPA and CPRA serve as the foundation for a future in which data privacy becomes an integral part of doing business, and where businesses and consumers thrive.