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California Consumer Privacy Act

In our first June blog post, we discussed a bill passed by the State Senate which would provide net neutrality rules for ISPs in the State of California.  We continue this week with the theme of internet regulating laws being proposed in our state.

The California Consumer Privacy Act of 2018 (CCPA) is a ballot measure, which would provide unprecedented protection for user data in California.  Users would have the ability to prevent companies from selling their data to third parties, as well as demand full disclosure of all data being collected.  Consumers would also have the ability to sue companies in violation of the law.

The CCPA was started by Alastair Mactaggart, a real estate developer in the San Francisco area, along with Rick Arney, a finance executive, and Mary Stone Ross, an attorney who has worked on national security matters with the House of Representatives and was a former CIA analyst.  The group says they are just three people living in California who want what is best for their kids and the future of Californians.  They believe the “bargaining” that occurs between big companies and users regarding consumer privacy, which is basically take-it-or-leave-it is not bargaining at all.  With the practical necessity of laptops and cell phones today, they want users to have more choice and power in terms of what information is collected, and how that information is used.

The measure’s goals according to CCPA’s website are: (1) transparency in terms of users knowing what data is being collected about them, (2) user control to limit what data is collected and to prevent companies from selling that data, and (3) accountability by companies who misuse consumer data.

The advocates of CCPA are concerned about the ever-growing power of internet giants, such as Amazon and Facebook, going unchecked.  These websites are known to track user browsing history, location, and even how many steps a user walks a day.  Big internet companies have the ability to track what websites users visit, what users search for, and how long users visit other webpages.  Internet companies claim to use this data for making advertisements more relevant to users.  Whether this is something that users appreciate – or even want – is currently off the table.  CCPA hopes to change that.  According to Mactaggart, who has personally donated over $2 million to fund the initiative, “People are resentful but accepting because there isn’t any sense of control about their data.”

Large web companies are opposed to the initiative, and some political consultants estimate that the opposition campaign will spend up to $100 million.  Facebook, Google, Verizon, Microsoft, Uber, AT&T, and Comcast have already contributed nearly $2 million in opposing campaign funding.  These large companies claim that allowing users to control their data in the way that CCPA suggests would negatively impact the economic models on which their companies are built.  California’s Chamber of Commerce is also opposed to the ballot measure, and with these companies has created “The Committee to Protect California Jobs.”

The California Consumer Privacy Act currently has over 600,000 signatures, surpassing the minimum 366,000 required for a ballot measure.  If CCPA is passed into law, companies would still be permitted to utilize user data for internal purposes, including, selling, advertising, and improving, consumer’s use.  The companies would be prohibited, however, from selling or exchanging user data with third parties.

As the ballot measure approaches voting time in November, we’ll hope to have an update on any progress that occurs in the upcoming months.

At our law firm, we assist clients with legal issues related to business, cybersecurity, e-commerce transactions, and technology related issues.  Please contact us to set up an initial consultation.