The California Consumer Privacy Act (CCPA) applies to certain for-profit businesses that collect or have collected the personal information of California residents, whether or not those businesses are located in California.

Often compared to the European Union’s General Data Protection Regulation (GDPR), the CCPA is the most stringent data privacy law in the United States. And in fact, its reach is nearly as broad as the GDPR. There is no federal law like the GDPR protecting consumer information. Some states have data privacy laws, but none as stringent as this new California law.

What is CCPA?

The California Consumer Privacy Act (CCPA), effective from January 1, 2020, marks a significant milestone in U.S. privacy law. Targeting for-profit entities with considerable annual gross revenue, it governs how businesses handle personal data, including sensitive information like social security numbers and biometric data, of California residents. This groundbreaking legislation grants California residents enhanced rights over their data, compelling businesses to align with strict privacy protection and cybersecurity standards.

Amendments such as the California Privacy Rights Act (CPRA) further refine this landscape. The CCPA and CPRA collectively strengthen consumer rights, emphasizing transparency in handling consumer data and providing avenues for residents to opt out of selling their personal information. These laws also establish non-discrimination policies for consumers exercising their privacy rights and require businesses to respond effectively to consumer requests.

Businesses face significant legal and financial repercussions for non-compliance, including statutory damages for data breaches and penalties enforced by the California Attorney General. The CCPA’s reach extends beyond California, affecting any legal entity dealing with California residents’ data, thereby setting a precedent for privacy laws nationwide.

Who is protected under the CCPA?

Under the CCPA, “consumers” are defined as natural persons who are residents of California. This broad definition includes a variety of personal data categories, such as IP (Internet Protocol) addresses, geolocation data, and biometric information. The CCPA applies regardless of the business’s location, extending its influence beyond California.

These protections are integral to the CCPA’s goal of enhancing consumer rights and privacy protection. Service providers and businesses, particularly those under common branding, must comply with the CCPA requirements. These include responding to consumer requests about their data, implementing the “Do Not Sell My Personal Information” option on their websites, and maintaining reasonable security practices to prevent data breaches.

The CCPA compliance framework establishes new standards in data privacy, akin to the General Data Protection Regulation (GDPR) of the European Union. For California residents, this means enhanced control over their data, including sensitive information like driver’s license numbers and health data protected under the Health Insurance Portability and Accountability Act (HIPAA). This comprehensive approach places the CCPA at the forefront of privacy law in the United States.

Who is excluded from CCPA?

While the CCPA represents a significant step in data privacy for California residents, it’s essential to understand which entities are not bound by its provisions. Here’s a brief overview:

  1. Scope of CCPA: The CCPA primarily focuses on for-profit businesses handling the personal data of California residents, with criteria based on annual gross revenue and consumer data volume. Non-profits and smaller businesses are generally not covered.
  2. Exemptions in CCPA: Certain types of information, especially those protected under other privacy laws like the Gramm-Leach-Bliley Act, are exempt from the CCPA. This includes specific publicly available or regulated medical and financial data.
  3. Business Requirements under CCPA: While covered businesses are required to comply with CCPA’s mandates, such as providing privacy notices, entities engaged solely in commercial activities with limited consumer interaction may not be entirely subject to all CCPA regulations.

How does CCPA affect consumers?

The CCPA marks a transformative shift in data privacy, greatly amplifying consumers’ rights and control over their personal data. Under the CCPA, California residents gain the right to inquire and receive full disclosure from businesses about the specific types of personal information being collected, the purposes for which it is used, and with whom it is shared or sold. 

The CCPA empowers consumers to take decisive action regarding their data. This includes the right to request the deletion of the personal information held by businesses – a significant step toward personal data autonomy. Additionally, it offers the option to opt out of the sale of their information, providing a tangible way for consumers to control the commercial use of their data.

This legislative shift under the CCPA enhances transparency and fortifies consumer rights in the digital age. It establishes a new benchmark in privacy rights, signaling a broader movement towards empowering individuals in how their personal data is managed and utilized.

What are the penalties for violating CCPA?

There are significant penalties for CCPA violations, particularly for businesses with substantial annual revenue. These entities face civil penalties of up to $7,500 for each intentional violation and $2,500 for each unintentional violation if the issue is not resolved within 30 days of notification. This fine structure is especially pertinent for businesses that handle large categories of personal information, including sensitive data like IP addresses.

Moreover, the CCPA grants consumers a private right of action in the event of a data breach. Consumers can individually sue businesses for statutory damages ranging from $100 to $750 per incident or for actual damages, whichever is higher. Such private lawsuits can be based on incidents like unauthorized access to a consumer’s personal information, underscoring the importance of maintaining functionality and security on business homepages and data systems.

These stringent penalties emphasize the critical need for CCPA compliance, especially for commercial purposes. They highlight the CCPA’s commitment to safeguarding consumers’ personal information and reinforcing their CCPA rights, such as the right to opt out of the sale of their personal information.

Navigate and comply with data protection regulations using ZenGRC

ZenGRC offers tools that simplify the management of consumers’ personal information and ensure compliance with CCPA requirements. The platform’s robust functionality not only aids in avoiding potential penalties but also ensures that your business practices align with the highest data privacy and protection standards.

Partner with ZenGRC to transform the way your business approaches data privacy compliance. Schedule a demo today!