Canada: California's New Privacy Law And What It Means For Canadian Businesses

On June 28, 2018, the California legislature passed a new privacy law, the California Consumer Privacy Act of 2018 ("CCPA"), which will come into effect on January 1, 2020. The CCPA could impact Canadian organizations doing business in California, the world's fifth largest economy (with a larger population than Canada), even if they have no physical presence in the state and only conduct business online. This bulletin provides a high level comparison between this new Californian law and Canada's federal privacy statute, the Personal Information Protection and Electronic Documents Act ("PIPEDA").

Scope of the CCPA

The law regulates organizations doing business in California and collecting personal information about California consumers (essentially defined as California residents) and households, which organizations either: have annual gross revenues in excess of U.S. $25 million; buy, receive, sell, or share the personal information of more than 50,000 California residents; or derives 50% or more of its annual revenues from selling California residents' personal information.

"Doing business in the state of California" is likely to be interpreted as covering businesses with no physical presence in California but offering products or services in this state through the Internet. As such, many Canadian businesses could find themselves subject to the CCPA.

Comparison with PIPEDA

While the CCPA and PIPEDA share some similarities, they are different in many ways. Compliance with PIPEDA will therefore not ensure compliance with the CCPA. To help Canadian organizations understand the similarities and differences with both statutes, below is a high level comparison of the CCPA and PIPEDA on a few important topics.

  • Definition of "personal information." PIPEDA defines "personal information" as "information about an identifiable individual" (s. 2(1)). The CCPA defines "personal information" as "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." The law also provides a long non-limitative list of "categories" of personal information. This list includes categories such as names and other identifiers, biometric information, geolocation data and "browsing history, search history, and information regarding a consumer's interaction with an Internet Web site, application, or advertisement." The CCPA definition, while not identical to the definition of "personal information" under PIPEDA, is similar in the sense that it is also quite broad and also refers to information linked to a household which may relate to a small group of individuals (instead of a unique individual).
  • Transparency. Under PIPEDA, organizations must be transparent about their practices pertaining to the collection, use and disclosure of personal information (Principle 4.3). The CCPA includes a similar requirement that organizations be transparent, at or before the point of collection, about the categories of personal information to be collected and the purposes for which the categories of personal information shall be used (s. 1798.100(b)).
  • Right to access personal information. Under PIPEDA, individuals have a right to be informed of the existence, use, and disclosure of their personal information and shall be given access to that information (Principle 4.9). The CCPA grants Californians a similar right under which organizations must disclose, on request, the categories and specific pieces of personal information it has collected (s. 1798.100). If the organization "sells" (a term broadly defined as discussed below) personal information, the organization must disclose, on request, the source of the collection of the personal information, the business purposes for collecting such personal information, the categories of third parties with whom the organization shares this personal information and the specific pieces of personal information it has collected (s. 1798.115). It should be noted that unlike PIPEDA, the CCPA does not specify exceptions to this right of access, providing for reasons allowing organizations to refuse to grant such access.
  • Right to delete personal information. Under PIPEDA, organizations may only retain personal information as long as necessary for the fulfilment of the purposes for which it was collected, and individuals may request the deletion of their personal information once such purposes have been fulfilled (Principle 4.5). The CCPA provides individuals with a general right to deletion of their personal information (s. 1798.105), which could seem to be broader than the one provided by PIPEDA and appears more akin to the GDPR's "right to erasure." However, in practice, this right is subject to many exceptions, such as when the information is necessary to: (i) complete the transaction for which the personal information was collected; (ii) enable solely internal uses that are reasonably aligned with the expectations of the consumer based on the consumer's relationship with the business; or (iii) use the consumer's personal information, internally, in a lawful manner that is compatible with the context in which the consumer provided the information. As such, it could arguably be considered quite similar to the one Canadians have under PIPEDA, especially in light of the recently proposed broad interpretation by the OPC in its Draft OPC Position on Online Reputation (see summary in bulletin). It should also be noted that the Canadian House of Commons' Standing Committee on Access to Information, Privacy and Ethics' ("ETHI") recent report recommended that that the European's right to erasure be adopted in Canada (see summary in previous bulletin and the Government of Canada's response in this bulletin). The CCPA and PIPEDA may therefore eventually be aligned on this right if such amendments come into effect, although the specific details pertaining to the respective statutes' rights to deletion could vary.
  • Right to portability. The CCPA includes a right to data portability requiring organizations to provide consumers with their personal information in a portable and readily usable format allowing the consumer to transit the information to another entity, without hindrance (s. 1798.100(d)). PIPEDA does not include such a right, although the ETHI report discussed above has suggested that the Canadian government adopt it. This right is also included in the GDPR.
  • Consent. PIPEDA is based on a consent model for the collection, use and disclosure of personal information (Principle 4.3). Consent may be express (opt-in) or implied (opt-out), depending on the type of information (i.e. sensitive or not) and the reasonable expectations of the individual who may withdraw their consent (Principle 4.3.8). The CCPA does not specifically rely on a consent model, but it grants Californians a right to opt out of having their data "sold" (s. 1798.120(a)). The term "sold," which is used throughout the CCPA, is defined to encompass more than its common meaning, as it includes releasing, disclosing, disseminating, making available, transferring, or otherwise communicating to a third party for monetary or other valuable consideration. It also requires that businesses provide a clear and conspicuous link on their website's homepage titled "Do Not Sell My Personal Information" leading to a page enabling consumers to opt out of the sale of their personal information (s. 1798.135).
  • Anti-discrimination. Under PIPEDA, an organization shall not, as a condition of the supply of a product or service, require an individual to consent to the collection, use, or disclosure of information beyond that required to fulfil the explicitly specified, and legitimate purposes (Principle 4.3.3). The CCAP incorporates a similar concept by restricting organizations' attempts to penalize consumers who exercise any right under the CCPA. It prohibits organizations to deny goods or services to such consumers (or charge different prices by offering discounts to those who do not opt out), or offer them different level or quality of goods or services, unless it is reasonably related to the value the consumer's data provides to the consumer (s. 1798.125). This requirement which seems to take into account free business models that may generate revenue from advertising is also aligned with the view articulated by the OPC in the CIPPIC v. Facebook finding that it was reasonable for a company offering a free social networking service to require that users consent to having their personal information used for advertising purposes as a condition of service. The CCPA incorporates another related concept (which has no explicit equivalent in PIPEDA) in allowing organizations to offer financial incentives to consumers for the collection or sale of their personal information, with prior opt-in consent. Some commentators have noted that this concept could be in contradiction with the anti-discrimination principle.
  • Method of consumer request. PIPEDA provides that organizations shall put procedures in place to receive and respond to complaints or inquiries about their policies and practices relating to the handling of personal information (Principle 4.10.2). While PIPEDA specifies that the complaint procedures must be "easily accessible and simple to use", it does not specify the method of communication that must be made available for individuals wishing to contact the organization. The CCPA (s. 1798.130) is more specific as it requires that organizations make available to consumers two or more designated methods for requests for information about their personal information, including, at a minimum, a toll-free number and a website (if the organization maintains a website).

Enforcement

While there have been suggestions to strengthen the OPC's enforcement powers in the recent ETHI report as well as the September 2017 OPC report, under PIPEDA, the OPC does not have the power to impose fines and individuals do not have a private right of action (although individuals may seek damages before the Federal Court after the OPC has issued a finding on their complaint).

In terms of enforcement, the CCPA provides for a private right of action, but only in the case of security breaches (s. 1798.150). This right may be exercised without proof of harm and statutory damages are set at no less than US $100 and no greater than US $750 per consumer per incident, or actual damages, whichever is greater. The other provisions of the statute are enforced by the Attorney General of the State of California, who can bring actions for civil penalties up to US $7,500 per intentional violation (s. 1798.155).

Conclusion and Business Takeaways

It is likely that many Canadian organizations conducting business online will be subject to the CCPA if they collect personal information about California residents. These organizations should take note that complying with PIPEDA will not necessarily be sufficient to ensure compliance with the CCPA (and vice versa). Businesses collecting personal information from California residents must also bear in mind that the private right of action for data breaches includes statutory damages without proof of harm and that the California Attorney General has broader enforcement rights under the CCPA than the OPC has under PIPEDA.

Before modifying their business practices to ensure compliance with the CCPA, organizations should keep in mind that there are still many uncertainties pertaining to the scope and future interpretation of many of the CCPA's provisions. Moreover, the CCPA has already been criticized by commentators for having been adopted in a mere seven days and it has been described as being overly complicated, with a few drafting errors. It may therefore be amended before it comes into effect on January 1, 2020.

We will be closely following the developments of the CCPA and providing updates relevant to Canadian businesses.

About BLG

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Lawson Lundell LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Lawson Lundell LLP
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions