Understanding the California Consumer Privacy Act (CCPA)

What is the California Consumer Privacy Act (CCPA)?

The California Consumer Privacy Act (CCPA) of 2018 is a landmark privacy legislation enacted by the state of California to enhance the privacy rights and consumer protection for residents of California. Officially signed into law on June 28, 2018, and effective as of January 1, 2020, the CCPA aims to give Californians greater control over their personal information collected by businesses. It provides a framework for individuals to access, delete, and opt out of the sale of their personal data, setting a precedent for data privacy regulations in the U.S.

Why was the California Consumer Privacy Act (CCPA) created?

The CCPA was created in response to growing concerns about the security and management of personal data in the digital age. Prior to the CCPA, there were few comprehensive privacy laws in the U.S., leaving many consumers vulnerable to misuse of their data. The legislation was driven by the need for stronger privacy protections and more transparency regarding how personal data is handled. It also reflects a broader global trend towards more stringent data protection laws, similar to the European Union’s General Data Protection Regulation (GDPR).

Who has to comply with the California Consumer Privacy Act (CCPA)?

The CCPA applies to for-profit businesses that meet any of the following criteria:

• Revenue Threshold: Have annual gross revenues of $25 million or more.
• Data Handling: Collect personal information of 50,000 or more consumers, households, or devices.
• Business Focus: Derive 50% or more of their annual revenue from selling personal information.

Additionally, it applies to businesses that operate in California and meet these criteria, even if they are not physically located in the state.

How will the California Consumer Privacy Act (CCPA) affect businesses?

Businesses must inform consumers about the categories of personal data collected and the purposes for which it is used, usually through a privacy policy that must be easily accessible. Businesses must provide consumers with the ability to access their personal data, request deletion of their data, and opt out of the sale of their data. Businesses are required to implement reasonable security measures to protect personal information from unauthorized access and breaches. Companies need to train employees on privacy practices and ensure compliance with CCPA requirements.

Given California’s significant role in the global economy, compliance with the CCPA may also affect international businesses dealing with California residents’ data.

What are the penalties for noncompliance with the California Consumer Privacy Act (CCPA)?

Businesses may face fines of up to $2,500 for each violation or up to $7,500 for each intentional violation. The CCPA allows consumers to seek damages of between $100 and $750 per incident or actual damages, whichever is greater, if their data privacy rights are violated. Businesses are given a 30-day period to cure alleged violations before being subject to enforcement actions.

How do you comply with the California Consumer Privacy Act (CCPA)?

The California Consumer Privacy Act (CCPA) imposes several operational and compliance requirements on businesses that handle the personal data of California residents. Here’s a detailed breakdown:

1. Consumer Rights

Under the CCPA, consumers have several rights regarding their personal information:

• Right to Know: Consumers can request information about the personal data a business has collected about them, including the categories and specific pieces of information, the sources from which the information was collected, and the purposes for which it is used or shared.
• Right to Delete: Consumers can request the deletion of their personal information, subject to certain exceptions (e.g., for completing transactions, complying with legal obligations, etc.).
• Right to Opt-Out: Consumers have the right to opt-out of the sale of their personal information. Businesses must provide a clear “Do Not Sell My Personal Information” link on their websites.
• Right to Non-Discrimination: Consumers should not face discrimination for exercising their rights under the CCPA, such as being denied goods or services or receiving a different price or quality.

2. Business Obligations

Businesses must adhere to several key requirements:

• Privacy Notices: Businesses must provide clear and comprehensive privacy notices at or before the point of data collection. These notices should include details on the categories of personal information collected, the purposes for which the information is used, and information on consumers’ rights.
• Data Access and Deletion Processes: Businesses must implement processes to handle consumer requests for data access and deletion. This includes verifying the identity of the requestor, responding within the statutory time frame (usually 45 days), and providing the requested information or confirming deletion.
• Opt-Out Mechanism: For businesses that sell personal data, a conspicuous “Do Not Sell My Personal Information” link must be available on their website to facilitate opt-out requests.
• Training and Policies: Businesses should train employees responsible for handling consumer inquiries and establish policies and procedures to comply with the CCPA.

How do you prepare for the California Consumer Privacy Act (CCPA)?

Preparing for the CCPA involves several key actions:

• Conduct a Data Inventory: Assess and document the types of personal data collected, how it is used, and where it is stored.
• Develop Compliance Procedures: Create procedures for managing consumer data requests and ensuring data security.
• Audit Current Practices: Review and adjust existing data handling and privacy practices to align with CCPA requirements.
• Engage Legal Counsel: Consult with legal experts to ensure that your business complies with all aspects of the CCPA.

How can Craft help?

Craft’s supplier risk management solutions are designed to streamline compliance and enhance reporting. With our platform:

• Identify risky suppliers with in-depth company profiles and easily scalable due diligence
• Continuously monitor your supplier network for changes and potential violations
• Document your efforts for proof of compliance
• Collaborate and share information across teams for faster risk mitigation

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Related Regulations

• General Data Protection Regulation (GDPR)
• Virginia Consumer Data Protection Act (VCDPA)
• New York SHIELD Act
• Colorado Privacy Act (CPA)
• Washington Privacy Act (WPA)

Conclusion

The CCPA marks a significant step forward in consumer data protection in the U.S., setting a high standard for privacy rights and business obligations. By understanding and implementing the necessary compliance measures, businesses can avoid penalties, enhance their data protection practices, and build trust with their customers. Leveraging tools and solutions like Craft’s can streamline compliance efforts and help navigate the evolving landscape of data privacy regulations.

For more information on regulations affecting your business, visit our compliance hub.