United States: California Moves To Restrict Collection Of Consumer Personal Information Online: The Process, History And Politics Behind Senate Bill 383

Last Updated: February 7 2014
Article by Jake Romero

The California Senate has passed a bill restricting the information that certain online retailers can collect in connection with consumer purchases.  Senate Bill 383 would amend Sections 1747.02 and 1747.08 of the California Civil Code to address the collection of customer information in connection with credit card purchases in online transactions for downloadable products.  The bill aims to close a perceived gap in the data privacy protections afforded to California residents, by placing these types of transactions within the scope of California's Song-Beverly Credit Card Act, which prohibits retailers from requiring certain customer personally identifiable information as a condition to accepting credit card payment.

Does this all sound vaguely familiar?  If so, that is likely because SB 383, in its current form, is just the latest development in a series of efforts to adapt Song-Beverly, a law that pre-dates the modern internet, to current retail and data collection practices.

The battle over how far the provisions of Song-Beverly can be extended began in earnest after the California Supreme Court, in Pineda v. Williams-Sonoma Stores, held that in the interest of advancing the privacy protection goals of Song-Beverly, the term "personal identification information" should be ready broadly to include the ZIP codes of customers.  After the Pineda decision, a number of class action suits were filed arguing that Song-Beverly should apply to online merchants in addition to brick-and-mortar stores.  In February 2013, however, the Court held, in Apple v. Superior Court (Krescent), that Song-Beverly's restrictions on collecting personal information in connection with credit card transactions do not apply to online sales of electronic downloadable products.  Sellers of online downloadable material, the Krescent Court held, would not be able to rely on the methods of fraud control, such as asking to see the purchaser's driver's license or State-issued ID, that are explicitly permitted by Song-Beverly.

The original version of SB 383 was introduced, in part, in reaction to the Krescent decision.  The language of the original bill broadly applied to all online transactions and only permitted a seller to require and retain personal information when required to prevent fraud, theft or identity theft.  SB 383 faced strong opposition from a number of tech and online commerce associations who claimed the original bill was overreaching, as well as the California Chamber of Commerce, and ultimately stalled in the legislature.

And now, at last, we arrive at the current SB 383, which we'll refer to as "New SB 383".  The re-introduced bill, which passed the Senate with the minimum number of votes at the end of January, differs from its predecessor in a number of important ways:

  • New SB 383 applies only to online transactions involving an electronic downloadable product (the same subset singled out in the Krescent decision), rather than online transactions generally.
  • In addition to prevention of fraud, theft or identity theft, New SB 383 permits sellers to require and retain personal information of consumers for (i) the detection or investigation of fraud, theft or identity theft, (ii) the detection, investigation or prevention of criminal activity or (iii) the enforcement of terms of sale.
  • New SB 383 allows sellers to share consumer personal information when required by state or federal law or when contractually obligated to share the information with another entity for purposes of (i) verifying the purchaser's information, (ii) completing the transaction, (iii) detecting, investigating or preventing fraud, theft, identity theft, or criminal activity or (iv) enforcing terms of sale.
  • New SB 383 includes a process through which sellers can have consumers opt-in to having information collected, so long as consumers are contemporaneously given notice (i) that providing the information is not required to complete the transaction, (ii) of the purpose of the request and (iii) the intended use of the information.  Consumers must also be given an additional opportunity to opt-out before the purchase transaction is completed.

New SB 383 is notable for a few reasons.  First, the use of the terms "contemporaneously" and "before" in the opt-in/opt-out process show a clear move toward statutory requirements for just-in-time notification (part of the concept of "Privacy by Design" that has been endorsed and recommended by, among others, the Federal Trade Commission and California Attorney General Kamala Harris).  Second, some of the added language appears likely to be subject to disputes in interpretation (defining, for example, the scope of information that could be retained for purposes of "enforcement of terms of sale" seems problematic), and since Song-Beverly includes a private right of action, there is a substantial likelihood that those questions of interpretation would be presented in the form of civil actions.

The changes made to SB 383 seem intended to narrow the scope of the bill in an effort to win over some of the original bill's detractors.  However, the most important change determining the fate of New SB 383 may not be in the language of the bill at all.  In recent weeks a number of high profile data breaches have hit the front pages and affected millions of consumers.  In the press release announcing the Senate's passing of SB 383, Senator Hannah-Beth Jackson is quoted as saying that these recent data breaches have "reminded us all how vulnerable our personal information can be unless we put safeguards in place to protect it."  In choosing this moment to resurrect SB 383, Senator Jackson is likely wagering that an uptick in consumer worries can tip the political balance against ongoing industry concerns.

New SB 383 will now move to the Assembly.  You can keep up to date on all of the ongoing developments by subscribing to our Privacy & Security Matters blog.

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.

Jake Romero
In association with
Related Video
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.