United States: CCPA Amendments – Where They Stand Today

Last Updated: September 24 2019
Article by Taylor A. Bloom and Alan L. Friel

A little more than 100 days prior to the effective date of the California Consumer Privacy Act (CCPA), six amendments (A.B. 25, A.B. 874, AB 1146, A.B. 1202, A.B. 1355 and A.B. 1564) to the act were approved by California lawmakers at the close of the legislative session, which ended on Friday, Sept. 13. The governor must sign or veto these bills by Oct. 13. Most notably, if they become law, the bills would delay implementation of most of the CCPA's data subject rights to human resources data and business-to-business transaction communications data for one year. A bill that would have clarified that certain data collection and use in connection with loyalty programs was permissible (A.B. 846) was pulled by the author, but may be brought back up in the next legislative session if the regulations implementing the act, a first draft of which is expected from the California Attorney General's (Cal AG) office in late September or early October, do not address the issue. The proposed amendments also would require a business that collects and sells consumer personal information (PI), but does not have a direct relationship with those consumers, to register with the state as a data broker. In addition, the bills address the scope of personal information that is covered by the act, the meaning of certain consumer rights and how those rights are to be administered, and what training is required of personnel that will handle privacy inquiries and requests.

Data Broker Registry

AB 1202 would require "businesses" that knowingly collect and sell consumer personal information, that lack a direct relationship with those consumers, to register with the Cal AG, whose office would then publish the names and contact information of the registrants on the Cal AG's website. A prior version of the bill would have also required data brokers to give consumers certain precollection notice of the categories of personal information collected and the purposes for the collection, which could have been satisfied by posting such notice on the data broker's website, but those provisions were struck prior to passage. The intent of the law is to provide consumers with a way to identify businesses that may be collecting and selling their information that they may not know how to contact to determine if they have collected their personal information and to exercise their do-not-sell and other consumer privacy rights (e.g., to obtain a copy of the personal information and/or request its deletion).

Scope of Coverage Delayed (employees and transactional)

AB 25 provides that, until Jan. 1, 2021, only the precollection notice requirement of Section 1798.100(b) and the private right of action for data security incidents of Section 1798.150 will apply to personal information that is collected by a business in the course of a person acting as a job applicant, employee or contractor who is performing services under a written agreement. AB 1355 provides a similar one-year delay in the imposition of the obligations of Sections 1798.100, .105, .110, .115, .130 and .135 on a business with respect to communications with a person acting on behalf of another business regarding providing or receiving products or services to or from such business. By not including section .120, the do not sell right, but including section .135, the mechanics for the do not sell right, the amendment is somewhat ambiguous as to whether the do not sell right is or is not delayed. It is important to note that this does not include communications when the person is acting on behalf of themselves or other consumers, but rather addresses only business-to-business transactional communications. The issue of what the proper scope of coverage should be for human resource data and business-to-business communications data is likely to be revisited next legislative season.

Exceptions to Statutory Coverage

AB 1146 adds exemptions for certain vehicle information shared in connection with warranty repairs and recalls. AB 1355 would amend the Fair Credit Reporting Act (FCRA) exclusion of Section 1798.145(d) to clarify that it applies only to personal information furnished to credit reporting agencies to the extent such information is subject to regulation by the FCRA and is not used, communicated, disclosed or sold except as authorized by the FCRA.

Exceptions to Scope of Personal Information

AB 874 amends the definition of "publicly available information," which is deemed not to be personal information regulated by the CCPA, by removing the government-purpose limitation of Section 1798.140(o)(2). Currently, the CCPA does not apply the exception if "the data is used for a purpose that is not compatible with the purpose for which the data is maintained and made available in the government records ...." If AB 874 becomes law, all that will be required to take data out of the scope of the CCPA's rights and obligations is to show that it is lawfully made available from federal, state or local government records and does not include biometric information collected by a business about a consumer without the consumer's knowledge. AB 874 also clarifies that deidentified information and aggregate consumer information are also not within the definition of personal information. Efforts to further refine the definition of deidentified information to loosen the deidentification standards were not successful. AB 874 further would add the word "reasonably" before "capable" as part of "capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household" in the definition of personal information.

Consumer Rights, Notices and Requests

The bills would make changes to the scope and management of consumer rights requests, including:

  • No Toll-free Number for Online Businesses: Removing the toll-free method of receiving consumer rights requests requirement for a "business that operates exclusively online and has a direct relationship with a consumer."
  • Specific Pieces of PI: Changing the language of Sections 1798.110(c)(1) and (5) to make it clear that privacy notices are to include instructions to the consumer on how they can obtain their specific pieces of personal information and not that the notice must, as the language currently reads, include the specific pieces of information. If this becomes law, it should settle the debate as to whether "specific pieces" means the actual pieces of personal information or a description of data types (e.g., your name and address) that are more granular than the enumerated categories of personal information set forth in the definition of personal information required to be used in notices and information request responses.
  • No Collection or Retention Obligations: Clarifying that a business need not collect personal information it would not normally collect or retain personal information it would not normally retain just to be available to satisfy consumer rights.
  • Use of Account: Permitting the ability to require that consumer requests be made through an account if the consumer has an account. However, it would still be impermissible to require account creation merely to make a request.
  • Verification: Allowing a business to "require authentication in light of the nature of the personal information requested" before disclosing or delivering responsive PI. In addition, the definition of "verifiable consumer request" is expanded to apply not only to Sections 1798.110 and .115 (information rights) but also to .100 (copies of PI) and .105 (deletion of PI), but remains silent as to .120 and .135 (do not sell). However, the Cal AG's regulations are meant to provide more detail on both verification and the process for exercising do-not-sell rights and this continuing ambiguity regarding verification of opt-out requests may be clarified as part of the rule-making process.
  • Children: Clarifying that the category of children who may exercise their own do-not-sell opt-in rights under Section 1798.120(c) are at least 13 and less than 16 years old, making it clear that opt-in does not apply to 16-year-olds.
  • Privacy Notice: Adding that the online privacy notice must include a description of consumer rights under Sections 1798.100 (access and copy) and .105 (deletion), not just .110 (collection information), .115 (sale information) and .125 (nondiscrimination). The privacy notice disclosure of do-not-sell rights is covered in Section 1798.135, so now it is clear that privacy notices must explain all the various consumer rights.

Scope of Nondiscrimination (value + loyalty)

AB 1355 clarifies that the standard for evaluating the value of personal information to determine the reasonableness of financial incentives and differential pricing exemptions to the nondiscrimination requirements of Section 1798.125 is the value to the business, not to the consumer.

As noted, AB 846 would have allowed retailers and other businesses with loyalty programs to collect, use and, in some circumstances, disclose personal information as part of loyalty programs without fear of violating the nondiscrimination provision of the CCPA if certain conditions were met. Late in the session, the legislature continued to amend the bill regarding the scope of what would or would not be permissible and Assemblywoman Burke pulled the bill from vote eligibility on Sept. 12. It is a two-year bill, so it can be renewed in January when the legislature reconvenes. However, this is an issue the Cal AG has indicated interest in and clarifications could rise out of the regulatory process prior to the next legislative session.

Training

AB 25 expands the provision in Section 1798.130(a)(6) regarding training personnel responsible for handling privacy inquiries to address additional provisions of the title previously omitted (as to copy and deletion requests). Training about the do-not-sell right is covered in Section 1798.135(a)(3), so the amendment would make it clear that the appropriate personnel must be trained on all of the CCPA's consumer rights.

Conclusion

Assuming California's governor signs the bills into law in the coming weeks, businesses will receive a one-year respite from having to address fully their human resources and business-to-business communications data. However, they should beware that the private right of action for security incidents attributable to failure to maintain reasonable security still applies to such data. The bills that have passed provide some welcome clarifications regarding the CCPA, but it will be dependent upon the Cal AG to provide further guidance, particularly regarding verification. In the meantime, businesses should be working toward the Jan. 1 implementation deadline, at least with regard to the data that the bills do not propose to except from coverage. For more information, see our U.S. Consumer Privacy Resource Center.

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.

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