• Ryan Woods

You’re On Notice

Data Collection Transparency

California recently passed a law mandating businesses to be more transparent to their consumers about the consumer data that they collect. Information about how the data is collected, used, shared, and sold, among other things, is going to be much easier for everyone to find out, according to the new legislation. This will surely be the beginning of a new wave of policies that will sweep the entire nation, state by state, and will have a profound effect on commerce, generally.

Businesses, like the ones described here, are already taking precautionary measures to comply with CA laws in their own states. Even though the California Consumer Privacy Act is only passed in California, it may extend to any business deemed to be doing business in the state. If we’re to use the definition of “doing business” that is used in civil procedure, it is far from clear cut just who falls under the scope of the law. For that reason, not only are out of state companies consulting experts in this area about how to comply with the assuredly impending Acts that will be passed in their respective states, but they are clearly trying not to jeopardize their standing in the most populous, consumerist state in the country.

The law features three different ways in which a business will be within it; over $25MM in revenue, over 50,000 unrelated data points, or those who derive at minimum one-half of their revenue from these data sales. Such a wide sweeping net will create an entirely new niche in the tech/legal industry of systems and software to ensure that companies are operating within the rules. And this will create financial headaches for smaller businesses who have their revenue streams set in place, or infrastructure that is reliant on capturing consumer information.

As always, we’ll have an eye on these types of laws with the ability to affect so many small and medium business, and can create unforeseen issues, both logistically and financially. Budgeting for these types of system overhauls is expensive, but I can say with confidence that while the cost may be steep in the early going, the prices will definitely drop over time. But in the meanwhile, some of the relatively simple things that companies can do are to have their websites and other consumer materials reviewed to verify that the language of each falls within the requisites of the new law. This includes things like product packaging, website terms and conditions, privacy policies, disclosures and disclaimers, cookie policies, and Ad Choices.

Further, all new language will likely have to be drafted in the forms of notices informing consumers about their rights to have their information deleted or their ability to opt out from having it collected in the first places. These are all great examples of the types of legal services Where’s Legal? can provide at an affordable, flat rate.

The Act goes into effect January 1, 2020, so businesses have just over a year to get their act together.

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