CPRA: Understanding California’s Privacy Law

Staying up to date of regulatory changes is paramount. One such recent development is the California Privacy Rights Act (CPRA), which builds upon the existing California Consumer Privacy Act (CCPA). CPRA is set to significantly impact how businesses handle consumer data, requiring them to adhere to stricter regulations to protect individuals’ privacy rights.

CPRA Overview

The California Privacy Rights Act (CPRA), also known as Proposition 24, was passed in November 2020 and is slated to take effect in 2023. This legislation enhances and expands the CCPA, aiming to strengthen consumer privacy rights and hold businesses more accountable for data protection.

Key Provisions of CPRA

CPRA introduces several key provisions that businesses operating in California need to be aware of:

• Expanded Definition of “Sensitive Personal Information”: CPRA broadens the definition of “sensitive personal information” to include data such as Social Security numbers, driver’s license numbers, passport numbers, precise geolocation data, and more. Businesses will need to implement additional safeguards for handling this type of data.
• Data Minimization Requirement: Businesses must limit the collection, use, retention, and sharing of personal information to what is necessary for the purpose for which it was collected. This requirement encourages businesses to be more selective in their data practices, reducing the risk of data breaches and unauthorized access.
• Establishment of the California Privacy Protection Agency (CPPA): CPRA creates the CPPA, an independent agency tasked with enforcing the state’s privacy laws and ensuring compliance by businesses. The CPPA will take over enforcement responsibilities from the California Attorney General’s office, potentially leading to more stringent enforcement measures.
• Enhanced Consumer Rights: CPRA grants consumers new rights, such as the right to correct inaccurate personal information, the right to opt-out of the sharing of personal information for targeted advertising, and the right to limit the use of sensitive personal information.

Impact on Businesses

CPRA imposes significant compliance burdens on businesses, particularly those that collect and process large amounts of consumer data. To comply with the new requirements, businesses will need to:

• Conduct regular audits of their data practices to ensure compliance with CPRA requirements.
• Implement robust data protection measures, including encryption and access controls, to safeguard consumer data.
• Update their privacy policies to reflect the new CPRA requirements and provide consumers with clear information about their data rights.

CPRA Exemption

Compliance with privacy regulations is paramount. The California Privacy Rights Act (CPRA) is one such regulation that introduces crucial provisions to protect consumer privacy. Failure to adhere to these requirements can lead to hefty fines for businesses. However, not all consumer data types, businesses, and entities are subject to the CPRA regulations. Understanding the scope of CPRA exemptions is essential for businesses to navigate the evolving landscape of data privacy regulations.

CPRA exemptions are designed to balance consumer privacy rights with practical considerations for businesses. These exemptions play a vital role in delineating situations where businesses are not required to comply with specific provisions of the law. It’s important to note that CPRA does not apply to personal information collected, processed, sold, or disclosed entirely outside of California.

Key CPRA exemptions include:

1. Employee Data Exemption: Certain provisions of the CPRA do not apply to personal information collected from job applicants, employees, contractors, and other individuals in an employment context. This exemption recognizes the unique nature of employment relationships.
2. Business to Business (B2B) Exemption: The B2B exemption excludes personal information collected in business-to-business transactions from certain CPRA requirements. This exception aims to facilitate smooth business operations without imposing excessive privacy burdens.
3. Publicly Available Information Exemption: The CPRA exempts publicly available information from certain provisions, acknowledging that information already widely accessible does not require the same level of privacy protection.
4. Health Data Exemption: Medical information governed by existing federal privacy regulations, such as HIPAA, is exempt from the CPRA. This ensures that health data remains protected under established frameworks.
5. Financial Data Exemption: Financial institutions subject to specified financial laws, such as the Gramm-Leach-Bliley Act (GLBA), are exempt from certain CPRA provisions regarding personal information collected in connection with providing financial products or services. This exemption acknowledges the comprehensive privacy framework already in place for the financial sector.

Additionally, certain data types are automatically exempt from CPRA regulations, including de-identified information, aggregate information, and consumer data collected, shared, or sold exclusively outside of California.

To determine if your business qualifies for CPRA exemptions, a thorough evaluation must be done. This includes understanding the scope of the CPRA, evaluating business activities, identifying exemption criteria, conducting a data inventory, assessing employee data, and reviewing industry-specific regulations. Seeking legal counsel experienced in privacy and data protection matters can provide guidance tailored to your specific circumstances.

By understanding CPRA exemptions and ensuring compliance with relevant laws and regulations, businesses can protect consumer privacy rights while avoiding non-compliance issues. Properly classifying data, implementing robust privacy practices, and conducting regular audits are essential steps in achieving CPRA compliance.

If you’re unsure about the applicability of CPRA exemptions to your business, consider seeking a free consultation to assess your compliance obligations and potential exemptions. With the right approach, businesses can navigate the complexities of the CPRA and protect consumer privacy rights effectively.

CPRA vs CCPA

The CPRA builds upon the foundation laid by the CCPA, introducing new requirements, consumer privacy rights, and enforcement mechanisms. While the CCPA will remain in effect until the CPRA takes over, organizations need to prepare for the changes ahead.

Amended Definition of Covered Organizations

One significant change is the amendment to the definition of covered organizations. The CPRA applies to companies that purchase, sell, or exchange personal data of more than 100,000 households or customers in California, up from 50,000 under the CCPA. This adjustment means that some small businesses previously subject to the CCPA may now be exempt under the CPRA.

Additionally, the CPRA applies to organizations that derive at least 50% of their revenue from selling or sharing a consumer’s Personal Information, expanding the scope beyond businesses that “sell” consumers’ Personal Information under the CCPA.

Introduction of Sensitive Personal Information (SPI) Category

One of the most significant additions is the introduction of the Sensitive Personal Information (SPI) category. SPI includes highly sensitive data such as Social Security Numbers, driver’s licenses, financial account information, and more. The CPRA imposes more stringent disclosure and purpose limitation requirements for SPI, emphasizing the need for enhanced security measures.

New Consumer Privacy Rights

The CPRA grants consumers additional rights regarding their personal data, including the right to restrict the use of SPI, the right to correction of inaccurate data, and the right to opt-out of automated decision-making technology.

Expanded Obligations for Businesses

Businesses will need to provide detailed notices at the point of data collection, including information about retention periods for collected personal data. The CPRA also introduces new requirements for privacy notices, including disclosures about the sharing of personal information and the collection, processing, and disclosure of SPI.

Creation of California Privacy Protection Agency (CPPA)

Unlike the CCPA, which was enforced by the California Attorney General, the CPRA establishes the California Privacy Protection Agency (CPPA) as an exclusive agency for interpreting and enforcing the law. The CPPA will provide guidance, investigate violations, conduct hearings, and assign liability to covered entities for violations.

Preparing for CPRA Compliance

Organizations can prepare for CPRA compliance by assessing their current practices, understanding the new requirements, and implementing necessary changes. This includes conducting annual cybersecurity audits and regular risk assessments to evaluate processing activities.

Incorporating GDPR Principles

The CPRA incorporates principles from the General Data Protection Regulation (GDPR), such as data minimization, purpose limitation, and storage limitation. This requires organizations to limit the collection, use, and retention of personal information to what is necessary for specified purposes.

What Business Owner Need to Know

The CPRA expands consumer rights and imposes new obligations regarding data privacy. While it’s not as stringent as the EU’s General Data Protection Regulation (GDPR), it introduces novelties not previously seen in the US. Here’s a breakdown of what you need to know:

Scope of CPRA

CPRA applies to businesses that operate in California or offer products/services to Californians. If your business meets one of the following thresholds, CPRA compliance is required:

• At least 50% of annual revenue comes from selling or sharing personal information.
• Purchase, sell, or share personal information of at least 100,000 California residents or households.
• Annual gross revenue of $25 million or more.

Personal Information and Sensitive Personal Information (SPI)

CPRA defines personal information broadly and introduces the concept of SPI, which includes highly sensitive data like social security numbers, financial account information, and health data. SPI is subject to stricter disclosure and processing requirements.

Penalties for Non-Compliance

Non-compliance with CPRA can result in fines of up to $2,500 per violation, with intentional violations carrying fines of up to $7,500 per violation. Businesses must also be prepared to address data breaches promptly and effectively.

CPRA Requirements for Businesses

• Provide consumers with a privacy notice detailing how their data is processed.
• Use collected personal information only for intended purposes.
• Obtain explicit consent for processing data for new purposes.
• Ensure data processed is adequate for intended purposes.
• Request explicit consent from minors for the sale or sharing of their personal information.

Consumer Rights Under CPRA

Consumers have several rights under CPRA, including the right to know about the personal information businesses process, the right to delete their personal information, and the right to opt-out of the sale or sharing of their data.

Achieving CPRA Compliance

To achieve CPRA compliance, businesses should:

• Process only necessary personal information.
• Process data only for specific purposes.
• Review and update privacy notices.
• Review and update contracts with service providers.
• Implement mechanisms for consumer requests and data protection.
• Conduct regular risk assessments and cybersecurity audits.

The CPRA represents a significant step in enhancing data privacy rights and obligations for businesses in California. By understanding and adhering to its requirements, businesses can protect consumer data and avoid costly penalties. As a cyber security expert, staying informed and proactive is essential in navigating the complexities of data privacy laws.

Common Questions

Question	Answer
What are the requirements for CPRA in California?	The CPRA imposes several requirements on businesses, including the obligation to limit the use of sensitive personal information, provide consumers with the right to correct inaccurate information, and establish the California Privacy Protection Agency (CPPA).
Does the CPRA apply to businesses outside of California?	Yes, the CPRA applies to any business that collects personal information from California residents, regardless of where the business is located.
What is the CPRA California public records?	The CPRA exempts certain types of personal information from public disclosure, including Social Security numbers, driver’s license numbers, and financial account information.
What is the difference between CPRA and CCPA in California?	The CPRA builds upon the CCPA by introducing stricter requirements for businesses, such as the obligation to implement data minimization practices and provide consumers with the right to limit the use of sensitive personal information.
Does CPRA only apply to California residents?	Yes, the CPRA applies specifically to California residents and their personal information.
What is the CPRA exemption in California?	The CPRA exempts certain categories of information from its requirements, including information collected for employment purposes and information collected from employees or job applicants.
Does the CCPA apply to users outside of California?	Yes, the CCPA applies to any business that collects personal information from California residents, regardless of where the business is located.
What is the difference between GDPR and CCPA?	The GDPR is a comprehensive data protection regulation that applies to all EU member states, while the CCPA is a state-specific law that applies only to businesses operating in California and their handling of personal information.

Conclusion

In conclusion, the California Privacy Rights Act represents a significant step forward in consumer privacy rights. By understanding its provisions and taking proactive steps to comply, businesses can protect consumer data and avoid potential legal repercussions.