The spotlights of the consumer privacy world are once again on California after the new California Privacy Protection Agency made a surprise Friday night release of its draft California Privacy Rights Act (CPRA) regulations on May 27, 2002.
On Wednesday, June 8, the California Privacy Protection Agency (CPPA) Board voted 4-0 (with one member absent) to initiate the CPRA rulemaking process based on the draft regulations released on May 27th prior to the Memorial Day holiday. (To learn more, please see New California Draft Privacy Regulations: How They Would Change Business Obligations …
On Friday June 3, a bipartisan group of leaders from key House and Senate committees released a new “discussion draft” bill to establish nationwide standards for consumer privacy. The proposal (the American Data Privacy and Protection Act) builds on prior bills put forth by both Democrats and Republicans, as well as principles and provisions contained in the GDPR and State privacy laws. Of significance, the bill reflects bipartisan compromise on two thorny issues that have divided the parties for years – whether to preempt state privacy laws and/or include a private right of action. While the bill has been hailed as a “breakthrough,” the prospects for passage are uncertain, particularly in this busy election year.
Why is this bill significant?
As most of our readers know, the US has no overarching federal privacy law – only sector-specific laws such as GLBA and COPPA. This patchy, confusing scheme has become even more complex with passage of the GDPR (which applies to US multinational companies) and five comprehensive State laws. While many federal bills have come and gone over the years, none reflect the high-level bipartisan compromise evident here – both on longstanding privacy concepts (notice, choice, access, security) as well as more specific concerns about discrimination, algorithms, platforms, data brokers, targeted ads, and corporate accountability. If passed, the bill would apply to virtually all companies doing business in the US.
Why is this happening now?
While many observers wish a bipartisan bill had been proposed earlier, the forces driving this bill forward have never been stronger. Passage of State laws is accelerating, the EU is exerting greater influence over privacy worldwide, and the FTC is planning to launch wide-ranging privacy rulemakings. In addition, Senator Wicker, one of the bill’s authors and a longtime leader on privacy, may soon vacate his slot as Commerce’s top Republican, motivating him to cement his legacy now. To cap it all off, while election year is indeed a difficult year to pass a bill like this, it’s also creating pressure to make one last effort on privacy.
Continue Reading New Bipartisan Federal Privacy Bill – Breakthrough, Too Late, or Both?
We like to occasionally use this space to let you know about upcoming events that you may not have heard about:
State Attorneys General 101
Please join Kelley Drye State Attorneys General practice Co-Chair Paul Singer, Senior Associate Beth Chun and Abby Stempson, Director of the Center for Consumer Protection, National…
On Friday May 27, 2022, the California Privacy Protection Agency (CPPA) Board announced its next public meeting will be on June 8, 2022. The announcement simply stated the date of the meeting, that there are “some discussion items [that] will be relevant to the Agency’s rulemaking work,” and that information on how to attend the meeting and the meeting agenda could be found on the CPPA’s site. It did not take too many Internet sleuths to review the posted agenda, and note that Agenda Item No. 3 was “Discussion and Possible Action Regarding Proposed Regulations, Sections 7000–7304, to Implement, Interpret, and Make Specific the California Consumer Privacy Act of 2018, as Amended by the California Privacy Rights Act of 2020, Including Possible Notice of Proposed Action,” and that the posted meeting materials included a copy of the “Draft Proposed CCPA Regulations.” In addition, Agenda Item No. 4 provides for “Delegation of Authority to the Executive Director for Rulemaking Functions.” Full stop, June will be an active month for California privacy rulemaking.
But let’s unpack the surprises in the draft regulations. The 66-page draft proposed CCPA regulations (and they are referred to within the document as CCPA regulations) take a prescriptive approach to privacy obligations. In concept, that is not too surprising. Of concern, in some areas, they uniquely depart from approaches set forth by other state privacy laws. The quiet release of dramatic new obligations while bipartisan Senators reportedly may be reaching consensus on federal privacy legislation that could preempt state law obligations puts companies doing business in California in a difficult position. Do they scramble to operationalize new programs to comply with the CPPA’s new requirements, if finalized? Do they wait on Congress? Do they choose a third path? For now, while these draft rules are certain to change in some respects before they are finalized, they directionally outline a new privacy baseline for the United States. We highlight certain aspects of the draft rules below, with a particular focus on accountability and risk exposure, how data can be shared with other businesses for digital advertising or other functions, and what those business agreements must include to lawfully support such business relationships and comply with the amended CCPA.
Continue Reading New California Draft Privacy Regulations: How They Would Change Business Obligations and Enforcement Risk
Protecting the privacy and safety of kids and teens online is receiving enormous attention lately from Congress, the States, the FTC, and even the White House. Further, just last month, BBB National Programs unveiled a Teenage Privacy Program Roadmap…
There’s a “request for investigation” pending at the FTC that some of our readers might have missed. The April 12 complaint, filed by Georgetown Law professor Laura Moy on behalf of the Council on American-Islamic Relations, urges the FTC to conduct a wide-ranging investigation of the location data industry.
The complaint focuses in particular on alleged abuses harming the Muslim community, including the government’s purchase of location data from popular Muslim prayer apps to conduct “warrantless surveillance” on Muslim individuals. According to the complaint, these practices have led to a “sense of constant surveillance” that has chilled Muslims’ practice of religion, freedom of assembly, and use of technology to communicate. The allegations have broader implications, too, as they describe the “unfettered” and “surreptitious” data collection across many contexts by multiple industry actors, including the operating systems, app and SDK developers, data brokers, and participants in digital advertising’s real time bidding (RTB) process.
As I write this blogpost, the complaint does not appear to have been posted on the FTC’s website. Although the FTC seeks public comment on petitions for rulemaking, this complaint may not fall within that process since it chiefly seeks investigations, citing rulemaking as a “longer term” goal. (Of course, stakeholders may want to consider providing input to the FTC anyway to assist in its consideration of the issues.) …
Continue Reading Complaint Urges FTC to Investigate the Location Data Industry
The replay for our April 28, 2022 Privacy Priorities for 2022: Tracking State Law Developments webinar is available here.
In the absence of a federal privacy law, privacy has been at the forefront of many states’ legislative sessions this year. Against this backdrop, state attorneys general continue to initiate investigations into companies’ privacy practices,…
As we’ve discussed here, there’s bipartisan momentum in Congress to enact stronger privacy protections for kids and teens – and specifically, tools that would enable minors and their parents to limit algorithms and online content that fuel self-harm and addictive behaviors. These efforts, reflected in several federal bills (see here and here…
As companies wait to see whether the Utah Consumer Privacy Act (UCPA) becomes the fourth comprehensive state privacy law, we are providing an overview of some of the Act’s key provisions – and how they depart from comprehensive privacy laws in California, Colorado, and Virginia.
Utah’s Senate unanimously passed the UCPA on February 25. The House – also through a unanimous vote – followed on March 2. The Legislature sent the UCPA to Governor Spencer Cox on March 15. Because the Legislature adjourned on March 4, Governor Cox has 20 days from the date of adjournment – March 24 – to sign or veto the Act. If Governor Cox takes no action, the UCPA will become law, with an effective date of December 31, 2023.
In broad strokes, the UCPA is similar to the Virginia Consumer Data Protection Act (VCDPA) and Colorado Privacy Act (CPA). And, like the laws in Colorado and Virginia, the UCPA borrows some concepts from the CCPA – including a version of the right to opt out of the “sale” of personal data.
However, the UCPA pares back important features of all three of these laws. Some of the significant changes include:
- Applicability. The UCPA’s applicability is narrower than the three other comprehensive state privacy laws. The UCPA applies only to controllers or processors that (1) do business in the state (or target Utah residents with products or services); (2) earn at least $25 million in revenue; and (3) either: (a) control or process personal data of 100,000 or more consumers in a calendar year; or (b) derive more than 50 percent of gross revenue from selling personal data and control or process data of 25,000 or more consumers. By contrast, the $25 million revenue threshold is an independent basis for the CCPA to apply to a business; and neither the CPA nor VCDPA includes a revenue-based exemption.
- Exemptions. In addition to exempting personal data that is subject to sector-specific privacy laws and regulations, such as HIPAA, the Gramm-Leach-Bliley Act, and the Fair Credit Reporting Act, the UCPA provides that the Act does not apply to certain entities, including a tribes, institutions of higher education, and nonprofit corporations.
- Sale and Targeted Advertising Opt-Out Rights. Although the UCPA requires controllers to provide consumers with the ability to opt out of sale and targeted advertising, the Act does not provide a right to opt out of profiling (or otherwise address profiling). Like the VCDPA, the UCPA restricts the definition of “sale” to “the exchange of personal data for monetary consideration by a controller to a third party.” This definition does not include “other valuable consideration,” found in the definitions of “sale” under the CCPA and CPA.
- Opt-Out Consent to Process Most Sensitive Data. The UCPA does not require opt-in consent to process most sensitive data, unless the data “concern[s] a known child,” unlike the opt-in requirements of the CPA and VCDPA. Instead, the UCPA requires controllers to “present the consumer with clear notice and an opportunity to opt out” of sensitive data processing.
- Other Consumer Rights. The UCPA provides consumers the right to confirm processing and to delete personal data they provided to a controller. Consumers also have the right to obtain a portable copy of personal data that the consumer “previously provided to the controller.” This “provided to” language follows the VCDPA’s access and portability right and contrasts with obligations to provide personal data “concerning” (CPA) or “about” (CCPA) a consumer. The UCPA does not provide a right of correction or accuracy.
- Enforcement and Regulation. The UCPA does not include a private cause of action, nor does it authorize the Attorney General or other state official or agency to issue regulations. The Division of Consumer Protection, in the Utah Department of Commerce, investigates potential violations and can refer an action to the Utah Attorney General for enforcement. The Attorney General can recover actual damages for consumers and a penalty of up to $7,500 per violation, but only after a 30 day notice and right to cure period.