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California’s New Data Privacy Law: How Does it Affect Your Business?

Following days of intense negotiation among stakeholders including privacy advocates, network providers, technology startups, and Silicon Valley internet companies, California has passed a sweeping consumer privacy law that might enforce significant changes on certain industries.

The new law, called the California Consumer Privacy Act, A.B. 375 provides California residents with a new set of rights regarding the use of personal data.

The law encompasses the individual consumer’s rights to be informed about the kinds of personal information that companies gather and the reason it is collected. The new law also stipulates that consumers have the legal right to request access to their personal information in a “readily usable format” that allows easy transfer of the data to third parties. Customers have rights to the deletion of their personal information and to be exempted on the sale of their personal information.

How the New Law Affects Businesses

The law’s requirements, while beneficial to users who want more transparency as to how businesses use consumer information, may threaten established business models across the digital sector.

The new measures can possibly dent the profits firms currently enjoy or impose adjustments to the revenue-growth strategies they employ. Businesses that advertise on digital platforms may also be adversely affected, as highly targeted advertising might yield less accurate results due to the new protections afforded to individual customers.

Certain niches stand to lose even more. As consumers now have the rights to deletion and to opt out of the sale of their personal information, firms that generate profit by collecting consumer data and selling it to third parties may see direct hits to their bottom line.

While many small businesses may be exempt, those that are subject to the law are required to ensure their websites and systems can address consumer inquiries and requests. This could mean additional costs – and we’re talking thousands of dollars – for small companies that may not have in-house technology staffers.

Taking Effect in 2020

While the law technically applies to California residents only, it is likely to have much broader implications. This is because a huge chunk of major companies that deal in consumer data, from retailers to internet companies and cellular network providers, have customers based in California.

The law is set to come into effect in 2020.  Until then, the legislature has left open the door to amendments. The state attorney general is also expected to work with public stakeholders to narrow down the compliance guidance. Debates among consumer advocates, industry leaders, and everyone in between are also underway.

Business owners looking to determine early on whether they’re likely to be subject to the California law can talk to attorneys who deal with business law and privacy rights.

The team at Haffner Law keeps abreast of the developments in the new data privacy law. Count on us to provide you with sound legal advice and aggressive representation when facing commercial disputes. When you work with our experienced business litigation lawyer, you are in the best position to secure a favorable outcome.

Set an appointment to receive a no-cost, no-obligation evaluation of your case. Call us at 1-844-HAFFNER or 213-514-5681 today.

(This is an attorney advertisement by Joshua Haffner)

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