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New Data Privacy Laws in California

By Shirin Movahed

California is a sought after consumer market.  It is a consumer society that is home to Hollywood and all of the celebrities and stars that come with it.  The ability for a Canadian brand to ‘make it’ in California will likely dictate global success.  Moreover, with a population of over 39 million, the population of California surpasses the entire population of Canada.  Penetrating the California marketplace is a compelling story and Canadian brands’ ability to do so from an e-commerce platform is a game changer.  But, as always, it’s important to dot your legal “i’s” and mitigate your legal “t’s”.

Various states within the United States have implemented new laws regarding data privacy and sharing information that can ultimately have an effect on not only businesses located inside the U.S. but also on Canadian businesses that operate across the border. It is extremely important to understand the landscape of these new laws in order to recognize what information falls into the various faucets of the new legislation as well as to avoid legal troubles associated with data privacy in the future.

What Businesses Are Affected by the New Laws

Recently in California, the California Consumer Privacy Act (“CCPA”) was passed which will become effective at the beginning of 2020 and plans to implement a more expanded definition of personal information, while also specifying how personal information can be shared by businesses. The new laws have a ripple effect on not only the citizens of California and their personal information but also on the many businesses that operate inside California or with California residents. The new CCPA applies to major businesses that either surpass a yearly revenue of $25 million, have more than 50,000 consumers, or generate half of their profit from the sale of personal data.

Content of the CCPA

Many consumers are extremely protective of their personal information and give their trust to companies and businesses who have access to that respective information. The new CCPA expands on the definition of personal information in order to further protect the consumer, and states that consumers own ““information that identifies, relates to, describes, is capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household”. Although this definition helps protect the consumer and their information, the laws in turn make sharing information by companies a “slippery slope”. Businesses must also recognize the many other rights and protections for the consumer such as the ability to opt out of having their information sold to a third party as well as other stipulations that give the consumer more control over what personal information can and can not be shared. If a business does not understand these regulations, it can result in costly legal action which will not be beneficial to any company’s bottomline.

What does this mean for your business?

For any type of business that operates in California or any other states in the U.S., it is important to understand the specific laws regarding the sharing of personal information. Due to the many recent scandals involving consumer privacy such as with Facebook, it is vital to recognize the evolving rights of the consumer and what that means for your business. Businesses should be aware of the specific terms of the new laws to ensure that the sharing of personal information is mutually beneficial for both the business and the consumer.