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Overview of the California The silver lining

The act may create new business
Consumer Privacy Act opportunities. It will allow businesses
to offer services or rates to consumers
By Josh Herndon based on the information consumers
provide or decline to provide. For
Global Legal Law Firm example, a business will be allowed
to give a consumer who allows the
n June 28, 2018, California enacted the California Consumer Privacy business to sell their data free access
Act of 2018. In 2020, when the act takes effect, it will apply to all to a service; the business will also
businesses that sell to California consumers; have annual gross rev- be allowed to require a consumer
O enues at least $25 million; derive 50 percent or more of their annual who doesn't allow the business to
revenues from selling consumers' personal information; or buy, receive, sell or sell his or her data to pay a fee to
share personal information of 50,000 or more consumers annually. use the same service. Incentivized
consumers may voluntarily allow
The act allows consumers to get all the data a business has collected on them businesses to sell their data, which
and to whom the data has been sold. Although most people understand their would benefit businesses by allowing
online activity is being tracked for targeted advertising, they don't have a broad them to benefit from the use of the
understanding of what data's being used. Consumers will be allowed to ask for data while also reducing what it must
a detailed list under the act. do to comply with the act with respect
to such consumers.
The act also allows consumers to prevent businesses from selling their
information and to request that a business delete their personal information. Under the act, damages to consumers
In sum, the act imposes a huge burden on businesses. will top out at $750 per person in each
instance where the act is violated.
The highest penalty per violation that
can be levied against companies will
be $7,500. Businesses will be given 30
days to address and fix a violation
before being fined. Also, although the
California attorney general will be in
charge of deciding whether to pursue
legal action against companies for
violating the Act, consumers will be
allowed to sue under the act even
if the California attorney general
doesn't pursue the case.

The act will undoubtedly get more
attention as 2020 draws near. In the
meantime, and as other states adopt
similar legislation, businesses should
update their privacy policy and
terms and conditions to reflect the
requirements under the act.

Josh Herndon is an attorney at the Global Legal
Law Firm, whose attorneys are well recognized
as top payments industry experts. Herndon
works in the compliance field helping electron-
ic payment companies avoid violating rules, as
well as avoid being fined, arrested or sued from
internal or external threats. He is also involved
in litigation in the payments space. He can be
reached at jherndon@attorneygl.com.

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