August 1, 2018
On June 28, 2018, California passed the California Consumer Privacy Act (“CCPA”), which will go into effect on January 1, 2020. Previously, we discussed how the CCPA will regulate how businesses should handle consumers’ personal data. However, before businesses prepare for CCPA compliance, they should first determine whether the CCPA even applies to them.
What businesses are affected by the CCPA?
Defining Business Under the CCPA
The CCPA defines “business” as a for-profit entity that collects consumer personal data that meets at least one of the following thresholds:
- Annual gross revenue over $25 million;
- Annually buys, receives, sells or shares the personal information of 50,000 or more consumers, households or devices for commercial purposes; and
- Derives 50% or more of its annual revenue from selling consumer personal information.
It is important to note that the CCPA applies to all businesses, headquartered inside or outside of California, that collect personal data of California State residents. Also note that the CCPA does not apply to nonprofits and California state and local governmental entities.
Potential Amendments to the CCPA
California has an initiative system that allows voters to add statutes, amendments and referenda to the ballot if they are able to collect signatures equal to 8% of the most recent gubernatorial vote. The CCPA started as a ballot initiative introduced by privacy activists. The California State legislature was apprehensive about this initiative because, if passed, the State legislature would not have been able to amend or repeal the proposition without voter input. In order to have some control over the opportunity to amend or repeal the Act in the future, the State legislature negotiated with the privacy activists to remove their ballot initiative, which allowed the State legislature to draft the Act with the privacy activists’ feedback. Part of the negotiation was a firm deadline to pass the CCPA. Because of that deadline, there are still elements of the CCPA that the State legislature is trying to iron out. Before the CCPA goes into effect on January 1, 2020, it is likely that CCPA will be amended to revise and clarify certain of its provisions. As such, businesses should continue to monitor CCPA-related developments in the coming months.
If you are interested in learning more about this topic or need assistance with consumer privacy compliance, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.
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