United States: California Passes Consumer Privacy Act

On Thursday, June 28, 2018, Governor Jerry Brown signed into law the California Consumer Privacy Act of 2018 (the "CCPA"), which may significantly impact many companies that collect and monetize personal data from California residents. Among other things, the law, which applies only to the data of California residents ("consumers"), would require companies to give consumers information about what data they collect and sell, as well as to delete data about consumers if requested in some circumstances. If the company sells data about consumers, the law would also permit consumers to opt out of that practice. Additionally, in some contexts, the CCPA would provide consumers with a private right of action in the event their data is subject to an unauthorized access, theft, or disclosure as the result of the company's failure to implement and maintain "reasonable security procedures." The CCPA is scheduled to come into effect on January 1, 2020, and, given the length of time before the effective date and the rush to pass the bill, it is likely that additional modifications will be made. A bill passed by the legislature is easier to amend than a ballot initiative.

The CCPA is the result of a last-minute compromise agreement between California lawmakers and Californians for Consumer Privacy, the activist organization behind a data privacy ballot initiative (also entitled the California Consumer Privacy Act) that was widely criticized by businesses as broad and unworkable. Indeed, if passed into law, the ballot initiative would impose formidable compliance challenges while significantly increasing litigation risk for businesses subject to the law. With over 600,000 signatures, the ballot initiative was approved to appear on the November ballot on Monday. Per the agreement, the ballot initiative was withdrawn.

The Statute

The potentially broad reach of the CCPA is underscored by its definition of personal information, which expands far beyond traditional identifiers such as name, address, and social security number. Under the CCPA, "Personal Information" encompasses any information that "identifies, relates to, describes, is capable of being associated with" or that could "reasonably be linked, directly or indirectly, with a particular consumer or household." Personal information protected by the act includes, for example, biometric data, internet activity, and consumer profiles based on inferences from various bits of data. The definition is similar (but not identical) to the definition of "personal data" contained in the EU's General Data Protection Regulation ("GDPR"), which has been noted for its breadth. Unlike the GDPR, however, the CCPA excludes from its definition information that is publicly available. Any company that collects data from California residents should closely analyze whether that data meets the CCPA's unconventional conception of "personal information."

The CCPA would establish certain "rights," some familiar to Europeans, such as the so-called "right to be forgotten." The CCPA requires businesses to delete personal information about a consumer at the consumer's request, provided the data is not necessary for specified purposes, including to complete the transaction or provide other goods and services within the scope of an ongoing business relationship with the consumer, to comply with legal obligations or to enable other internal uses by the business that are "reasonably aligned with the expectations of the consumer," based on their relationship with the business.

Among other "rights" established by the CCPA are the right to request details about the personal information the business has collected, such as the categories of sources of the data and the categories of third parties with whom the data will be shared. Businesses that collect personal information are required to inform consumers about the categories of information collected and the purposes for which such data will be used at or before the point of collection. Consumers could also request disclosures about whether the business sells or discloses their data, and would have the right to opt out of any such sales. While the CCPA expressly prohibits companies from discriminating against customers who choose to exercise these rights, the bill does not prohibit a business from charging a consumer a premium, provided the premium is a reasonable price and is related to the "value provided to the consumer by the consumer's collected data" (an awkward phrase, discussed further below).

Businesses can also expect another round of revisions to their privacy policies, as the CCPA requires that covered businesses update their privacy policy to include descriptions of the new consumer rights, the methods for submitting requests, and the categories of personal information that it collects, sells, or discloses for a business purpose. Businesses that have "actual knowledge" that a consumer is under the age of 16 are prohibited from selling personal information about that consumer unless the consumer (or, in the case of children under the age of 13, their parent or guardian) opts in.


One feature of the CCPA receiving significant attention is its creation of a private right of action for California residents whose unencrypted "personal information" is subject to unauthorized access, exfiltration, theft, or disclosure "as a result of" a failure by the company to institute "reasonable" security procedures and practices. The CCPA provides for statutory damages of between $100 to $750 per consumer per incident, or actual damages if greater. However, the meaning of "personal information" for purposes of the private right of action is limited to the more traditional identifiers contained in California's data security statute, such as name, social security number, and credit card information, rather than the broad definition of "personal information" used elsewhere in the CCPA.

Additionally, there are further limits imposed on the right of action. First, the CCPA requires would-be plaintiffs to provide businesses with 30 days' written notice of the alleged violation before filing suit and precludes an action if the business cures the alleged violation in that time frame. Second, plaintiffs would have to provide notice of any action to the California Attorney General, who would have the authority to notify the consumer that he or she must not proceed on the action.

Notably, unlike the proposed ballot measure, the CCPA does not create a private right of action for violations of other provisions of the statute. Instead, civil penalties for violations of the statute would be exclusively assessed and recovered in civil actions brought by the California Attorney General. The proposed ballot measure also provided for whistleblower actions, which are not included in the CCPA.


The CCPA's scope is limited by several exceptions. First, the law only applies to businesses that (1) have revenues of over $25 million; (2) buy, sell, or receive for the business's commercial purposes personal information about 50,000 or more customers; or (3) derive more than 50 percent of their annual revenue from selling consumers' personal information. Second, the law does not restrict the processing of "deidentified" data or aggregate consumer information. Deidentified data is data that cannot reasonably identify or be linked to the individual, directly or indirectly, provided that the business has instituted safeguards to prevent any such re-identification. Third, the law does not impact the processing of data if both the consumer and the conduct at issue occur outside of California. Fourth, the law does not apply to health information governed by HIPAA. Other carve-outs include the collection or use of data to comply with other laws or to cooperate with law enforcement, processing of personal data covered by Gramm Leach Bliley, to the extent there is a conflict between the laws, and the sale of information to or from a consumer reporting agency covered by the Fair Credit Reporting Act.

Looking Ahead

Although the CCPA is not scheduled to become effective until 2020, companies potentially subject to it should begin to evaluate how it might impact their operations. Perhaps reflecting the rushed manner in which the legislation was adopted, there remains considerable ambiguity about some key provisions within the Act. For example, as discussed above, companies are not permitted to discriminate against consumers who exercise their rights under the Act through differentiated pricing or lower service levels. However, the Act provides that companies may offer a different price if the consumer allows the company to sell their data, provided the price difference is "directly related to the value provided to the consumer by the consumer's data." Presumably, this is intended to mean the value provided to the consumer in exchange for their data, but on its face, it would appear that companies are required to calculate the intrinsic value to the consumer of their personal information.

Many of these ambiguities could be resolved through regulation, and since the Act was passed quickly in order to head off a similar ballot initiative, without significant debate, it is expected that the legislature may consider future modifications. Ropes & Gray will continue to closely monitor developments. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions