California Privacy Rights Act
California Privacy Rights Act (CPRA) had been approved by California voters in November 2020 but was not yet fully in effect. The CPRA is a significant update to the California Consumer Privacy Act (CCPA) and introduces new privacy rights and requirements for businesses that process the personal information of California residents. The CPRA became effective on January 1, 2023, and enforcement is scheduled to begin on July 1, 2023. In this detailed explanation, we will explore the key provisions and compliances of the California Privacy Rights Act (CPRA).
Expanded Consumer Rights:
The CPRA expands and enhances the consumer rights granted by the CCPA, providing Californian residents with more control over their personal data. The additional rights introduced by the CPRA include:
a. Right to Correct Personal Information: Consumers have the right to request corrections of inaccurate or incomplete personal information held by businesses.
c. Right to Opt-out of Automated Decision-making: Consumers can opt-out of businesses using their personal information to make automated decisions that have significant legal or similar effects on them.
d. Right to Restrict Sale of Personal Information: The CPRA grants consumers the right to limit the sale of their personal information to third parties.
e. Right to Data Portability for Specific Data: Consumers have the right to request their personal information in a readily usable format, allowing them to move their data to other services.
Business Obligations:
The CPRA imposes new obligations on businesses that process personal information. These include:
a. Contractual Obligations with Service Providers: Businesses must now enter into written agreements with their service providers to ensure that the service providers process personal information in compliance with CPRA requirements.
b. Data Retention Limits: The CPRA introduces specific requirements for data retention, requiring businesses to retain personal information only for the period necessary for the purposes for which it was collected.
c. Data Minimization: Businesses must limit the collection, use, retention, and sharing of personal information to what is reasonably necessary for the purposes disclosed to consumers.
d. Third-party Sharing Restrictions: Businesses are required to include contractual provisions with third parties to whom they sell or share personal information, specifying that the information can only be used for the purpose for which it was shared and cannot be sold further without explicit consent.
e. Sensitive Personal Information Consent: The CPRA requires businesses to obtain consumers' explicit consent to process sensitive personal information, providing a higher level of protection for this category of data.
Creation of California Privacy Protection Agency (CPPA):
The CPRA establishes the California Privacy Protection Agency, an independent entity responsible for enforcing and implementing the CPRA. The CPPA takes over the enforcement responsibilities from the California Attorney General, which was responsible for enforcing the CCPA.
Increased Penalties for Non-compliance:
The CPRA increases the maximum penalties for violations concerning consumers' personal information, imposing fines of up to $7,500 per intentional violation and $2,500 per unintentional violation. The penalties are higher for violations involving minors' personal information.
Annual Risk Assessment and Audits:
The CPRA requires businesses that process large amounts of personal information or engage in activities that present a high risk to consumers' privacy to conduct regular cybersecurity audits and risk assessments.
Impact Assessments for Profiling and Automated Decision-making:
The CPRA introduces requirements for businesses that engage in profiling and automated decision- making that significantly affects individuals. Businesses must conduct and document impact assessments to evaluate the potential risks and harms to consumers' rights and freedoms.
Expansion of CCPA to Employee Data:
The CPRA expands the scope of the CCPA to include employee data, providing employees with more privacy protections regarding their personal information collected and processed by their employers.
Data Protection for Children:
The CPRA introduces additional protections for the personal information of children, requiring businesses to obtain opt-in consent from parents or guardians for the sale of personal information of children under the age of 13.
Private Right of Action for Data Breaches:
The CPRA allows consumers to pursue legal action against businesses if their personal information is subject to unauthorized access and exfiltration, theft, or disclosure as a result of a business's failure to implement reasonable security measures.
Limited Exemption for Employee Information:
While the CPRA extends privacy rights to employee data, it provides a limited exemption for certain personal information collected for employment-related purposes, such as human resources data.
In conclusion, the California Privacy Rights Act (CPRA) is a significant update to the California Consumer Privacy Act (CCPA), enhancing consumer privacy rights and introducing new obligations for businesses that process personal information of California residents. With the establishment of the California Privacy Protection Agency (CPPA), enforcement of the CPRA is expected to be more focused and streamlined. Businesses operating in California must ensure they are compliant with the CPRA's requirements to protect consumer privacy, avoid potential penalties for non-compliance, and maintain consumer trust in an increasingly privacy-conscious era.
