PH Privacy

CCPA Amendment Effort Largely Fizzles Out: Only Modest Changes Enacted (But Employment Info Is Granted a Partial One-Year Reprieve)

September 16, 2019

Claire Blakey and Sundeep Kapur

The California State Legislature’s session ended this weekend after passing a modest selection of amendments to the California Consumer Privacy Act (the “CCPA”). The California governor has until October 13 to sign them into law, which he is expected to do.

Six amendments were enacted into law, and several key measures were not.  However, importantly, a limited one-year delay on the applicability of the CCPA to employment and B2B information was enacted, along with a registration requirement for “data brokers.”

Here is a summary:

  1. Passed CCPA Amendments

    1. AB-25 (one-year employee/job applicant moratorium) added a one-year moratorium on certain CCPA obligations with respect to job application and employment information (administration of benefits, collection and use of emergency contact information, and collection and use of personal information regarding current and former job applicants and employees, including owners, directors, medical staff personnel, and contractors). However, certain disclosure obligations and the private right of action for data breaches (1798.100(b) and 1798.150, respectively) still apply. This exemption will expire on January 1, 2021.

      • The amendment also modifies obligations related to responding to consumer requests, stating that:  “The business may require authentication of the consumer that is reasonable in light of the nature of the personal information requested,” and that “[i]f the consumer maintains an account with the business, the business may require the consumer to submit the request through that account.”

    2. AB-874 (definition of personal information) made several clarifications to the definition of “personal information” in 1798.140(o) that:

      • Included “information that . . . could reasonably be linked . . . with a particular consumer or household”

      • Specified that “personal information” does not include “deidentified” or “aggregate” information

      • Defined “publicly available information” (which is not considered “personal information”) as “information that is lawfully made available from federal, state, or local government records,” which does not include “biometric information collected by a business about a consumer without the consumer’s knowledge”

    3. AB-1146 (vehicle warranty exception) amended CCPA Sections 1798.105 and 1798.145:

      • To expand the exceptions to the CCPA’s deletion right to include “fulfill[ing] the terms of a written warranty or product recall conducted in accordance with federal law”

      • To clarify that the CCPA’s opt-out of sale right “shall not apply to vehicle information or ownership information retained or shared between a new motor vehicle dealer . . . and the vehicle’s manufacturer . . . if the vehicle or ownership information is shared for the purpose of effectuating, or in anticipation of effectuating, a vehicle repair covered by a vehicle warranty or a recall”

      • To add definitions of “vehicle information” and “ownership information”

    4. AB-1564 (toll-free number exception) amended 1798.130 to specify that:

      • A business must make available to consumers a toll-free number and at least one other method for submitting requests for information, except that a business that “operates exclusively online and has a direct relationship with a consumer from whom it collects personal information” is only required to provide an email address.

      • If a business maintains a website, the business must make the website available to consumers to submit requests for information required to be disclosed pursuant to Sections 1798.110 and 1798.115 of the CCPA.

    5. AB-1355 (clean-up/clarification bill) corrected several typographical errors and incorrect references and made the following changes to the CCPA:

      • Privacy Policies.  A business’s privacy policy must disclose (1) “the categories of personal information it has collected about consumers” and (2) “that a consumer has the right to request the specific pieces of personal information the business has collected about that consumer.”  This revised the prior requirement, which mandated that businesses disclose the specific pieces of personal information collected about the consumer within the privacy policy.

      • The amendment also requires that the rights available to consumers under Sections 1798.100 and 105 be disclosed in a business’s privacy policy (and communicated to the individuals responsible for handling such requests or responding to inquiries regarding the business privacy practices/CCPA compliance).

      • B2B Communications (One-Year Moratorium).  Added a one-year moratorium on CCPA obligations for businesses that process personal information of individuals acting in their capacity as an employee (or owner, director, officer, or contractor) of another entity, provided such processing is related to (i) providing or receiving a product or service to/from such entity or (ii) due diligence of such entity. However, the private right of action for data breaches, right to opt-out of “sales,” and right against non-discrimination still apply. This exemption will expire on January 1, 2021.

      • Children’s Opt-In Consent.  A business must obtain a consumer’s opt-in consent to sell personal information of consumers who are “at least 13 years of age and less than 16 years of age.”   The amendment made clear that the requirement did not encompass consumers who are 16.

      • Non-discrimination.  A business may charge a consumer a different amount or provide a different level or quality of goods or services “if that difference is reasonably related to the value provided to the business by the consumer’s data” (rather than the value provided to the consumer).

      • Verifiable Consumer Request.  The definition of “verifiable consumer request” was modified to make clear that the rights of access and deletion can be denied if “the business cannot verify . . . that the consumer making the request is the consumer about whom the business has collected information or is a person authorized by the consumer to act on such consumer’s behalf.”

      • FCRA Exemption.  Except for Section 1798.150 (private right of action for data breaches), the CCPA will not apply to activities subject to regulation under the federal Fair Credit Reporting Act (“FCRA”) so long as the information is not used, communicated, disclosed, or sold except as authorized by the FCRA.

      • Retention.  Adds the following language in italics: “This title shall not be construed to require a business to collect personal information that it would not otherwise collect in the ordinary course of its business, retain personal information for longer than it would otherwise retain such information in the ordinary course of its business, or reidentify or otherwise link information that is not maintained in a manner that would be considered personal information.”

      • Clarifies Data Breach Private Right of Action.  The bill clarified that civil lawsuits may be brought only for data breaches where the compromised personal information is “nonencrypted and nonredacted” (instead of “or”).

      • California AG Regulations.  The California Attorney General may adopt regulations “[t]o establish rules and procedures on how to process and comply with verifiable consumer requests for specific pieces of personal information relating to a household in order to address obstacles to implementation and privacy concerns.”

    6. AB-1202 (mandatory registration for “data brokers”) requires “data brokers” to register annually with the California Attorney General and to provide certain contact information:

      • A “data broker” is defined as a “business that knowingly collects and sells to third parties the personal information of a consumer with whom the business does not have a direct relationship.”

      •  There are carve-outs for (i) a consumer reporting agency to the extent covered by the FCRA, (ii) a financial institution to the extent covered by the federal Gramm-Leach-Bliley Act, and (iii) an entity to the extent covered by the California Insurance Information and Privacy Protection Act.

      • Each “data broker” must, on or before January 31st of each year, (i) annually register with the California AG, (ii) pay an annual registration fee, and (iii) provide its name and primary physical, email, and website addresses.

      • The California AG will create a page that makes such information accessible to the public.

  2. Failed CCPA Amendments

    Besides the “data broker” requirement and one-year moratoria on employee and B2B information, the CCPA doesn’t look much different from before this process began.

    Indeed, most of the CCPA-related bills introduced into the legislature failed, most notably:

    • AB-846 (loyalty programs):  Carve-out for customer loyalty and rewards programs from the prohibition against price/service discrimination due to the exercise of other CCPA rights (e.g., access, deletion, opt-out).

    • AB-873 (deidentified data):  Though other aspects of this bill were incorporated into amendments that did pass, the attempt to modify the definition of “deidentified data” to include “information that does not identify, and is not reasonably linkable, directly or indirectly, to a particular consumer" did not.

    • AB-959 (disclosure of monetary value):  Would have required “businesses” to disclose the average monetary value of a consumer’s data, including within its privacy policy under a section entitled, “The Value of Your Data.”

    • AB-981 (insurance industry carve-out):  Would have eliminated a consumer’s right to request a business to delete or not sell her personal information if such information was necessary to retain or share to complete an insurance transaction requested by the consumer.

    • SB-561 (private right of action):  Famously known for expanding the private right of action to any violation of rights under the CCPA (as opposed to only personal information subject to a data breach).

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