CCPA Compliance 101: 7 Requirements to Become CCPA Compliant
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The state of California has taken significant strides in this direction with the introduction of the California Consumer Privacy Act (CCPA). But, what does it take for businesses to truly be compliant with this groundbreaking legislation?
In this article, we will learn about the requirements that every business should be familiar with to ensure CCPA compliance. So, whether you’re just starting your CCPA journey or looking for a refresher, this primer will offer a comprehensive overview.
Let us dive in!
Table of contents
- What is CCPA?
- But what is CCPA compliance in California?
- CCPA compliance examples
- 7 requirements to become CCPA compliant
- CCPA vs GDPR: How they are different?
- Summarizing it all together
- Related reads
What is CCPA?
The CCPA, or the California Consumer Privacy Act, is a landmark data privacy regulation that grants California residents increased rights and control over their personal data.
CCPA is often likened to the European Union’s General Data Protection Regulation (GDPR) in its intentions, although the two have distinct differences.
CCPA (California Consumer Privacy Act):
- Origin: Adopted in California, USA.
- Effective date: January 1, 2020.
- Purpose: To enhance the privacy rights and consumer protection of California residents.
- Key provisions:
- Right to know: Consumers can request businesses to disclose what personal information they have collected about them.
- Right to delete: Consumers can ask businesses to delete their personal information.
- Right to Opt-out: Consumers can instruct businesses not to sell their personal information.
- Non-discrimination: Businesses can’t discriminate against consumers for exercising their CCPA rights, such as by charging higher prices or providing a lower quality of goods or services.
Non-compliance can lead to significant penalties. The regulation has set a precedent for data privacy laws in the U.S., reflecting the growing global trend toward enhancing individual data rights.
But what is CCPA compliance in California?
CCPA compliance refers to a business’s systematic adherence to the mandates and provisions of the California Consumer Privacy Act (CCPA), ensuring the protection of personal information and the upholding of data rights granted to California residents.
This encompasses transparent data practices, facilitating consumer data requests, implementing data security measures, and refraining from discriminatory practices against consumers exercising their CCPA rights.
Being CCPA compliant means:
1. Acknowledging consumer rights
Respecting rights such as access to personal information, its deletion upon request, opting out of the sale of personal data, and not discriminating against those who exercise their CCPA rights.
Updating privacy policies to clearly indicate what data is being collected, why, and with whom it’s shared.
3. Data protection
Implementing reasonable security measures to safeguard consumer data against breaches.
4. Process implementation
Having procedures in place to promptly address consumer requests related to their data rights under CCPA.
5. Ensuring vendor compliance
If working with third-party vendors, make sure they too are CCPA compliant in their data handling practices.
In essence, CCPA compliance means businesses have adjusted their data practices to respect the enhanced privacy rights given to California residents by the CCPA.
CCPA compliance examples: Understanding core practices
Real-life examples can help to contextualize the somewhat abstract principles of CCPA compliance. Here are some examples to illustrate various aspects of the CCPA:
1. Updated privacy policies
- They also include clear instructions on how customers can access, delete, or opt out of the sale of their personal data.
- By making these changes, ShopWave is meeting its CCPA obligation to inform consumers about how their data is used.
- This transparency builds trust with customers and ensures they’re fully aware of their rights.
2. “Do Not Sell My Personal Information” Link
- On the homepage of a Californian online magazine named CaliBuzz, there’s a clear and conspicuous link titled “Do Not Sell My Personal Information.”
- When clicked, users are guided to a page where they can opt out of having their data sold to third parties.
- CaliBuzz is adhering to the CCPA requirement to provide consumers with a clear choice regarding the sale of their personal data.
- The provision of an opt-out mechanism is crucial for CCPA compliance.
3. Handling consumer requests
- Jane, a resident of California, contacts her fitness app, FitJourney, requesting a copy of all the personal information they’ve collected about her.
- FitJourney promptly provides Jane with a detailed report, including her workout logs, dietary inputs, and device information.
- FitJourney is fulfilling its CCPA obligations by recognizing Jane’s right to know and by providing her with the requested data in a timely and comprehensive manner.
4. Vendor agreements
- CityDine, a restaurant reservation platform, shares user data with third-party marketing firms.
- To ensure CCPA compliance, CityDine revises its contracts with these firms, ensuring they won’t sell user data or use it in ways not explicitly agreed upon.
- CityDine is taking proactive steps to ensure that not only are they compliant with CCPA, but their vendors are too.
- This is an essential aspect of data responsibility under the CCPA.
5. Data deletion requests
- After closing his account with an online multiplayer game, GamerWorld, Alex requests that all his personal data be deleted.
- GamerWorld not only deletes his game profiles and stats but also ensures that any backup or archived data related to Alex is removed.
- By doing this, GamerWorld is respecting Alex’s right to deletion under the CCPA, ensuring that once a user decides to remove their data footprint, all traces are genuinely eliminated.
- Ella exercises her right to opt out of data sales on a streaming platform, StreamFlix.
- Even after opting out, she continues to enjoy the same quality of service, access to content, and pricing as before.
- StreamFlix is demonstrating CCPA compliance by ensuring that users who exercise their data rights are not discriminated against or provided with inferior services.
- These examples paint a picture of what CCPA compliance looks like in action, highlighting the emphasis on transparency, consumer rights, and data protection.
Compliance with CCPA not only involves a series of structural and procedural changes for businesses but also fosters a culture of respect for user data.
The examples above are just a few ways businesses can work towards CCPA compliance, reflecting a broader commitment to user privacy and data protection.
7 requirements to become CCPA compliant
The California Consumer Privacy Act (CCPA) is a data privacy law enacted by the state of California, focusing on providing consumers with control over their personal data.
It establishes a range of rights for consumers and obligations for businesses concerning the handling of personal information. Given the prominence of California in the global economy, the CCPA has far-reaching effects, influencing even businesses outside of the state.
Now, let’s examine the requirements for CCPA compliance:
- Determine applicability
- Offer transparency about data collection
- Implement consumer rights
- Ensure data security
- Establish procedures for handling consumer requests
- Manage vendor relationships
- Training and awareness
Let us understand each of the above CCPA requirements in detail:
1. Determine applicability
- Size and scope:The CCPA applies to businesses
- That has gross revenues exceeding $25 million.
- Buy, receive, or sell the personal information of 50,000 or more California residents, households, or devices
- They get 50% or more of their annual revenue from selling California residents’ personal information.
- Operational scope: Even if a company isn’t based in California, if it does business in the state and meets the criteria, it needs to comply.
2. Offer transparency about data collection
- Notice at collection: When collecting personal information, businesses must provide clear notice about what data will be collected and for what purpose.
- Regularly update privacy policies: Ensure that privacy policies reflect current data practices, are understandable to the average consumer, and clearly detail consumers’ rights under CCPA.
3. Implement consumer rights
- Right to know:Upon request, businesses must disclose
- The categories and specific pieces of personal information they have collected,
- The source of that information, the purpose for collecting it
- Categories of third parties with whom it’s shared.
- Right to delete: Consumers can ask companies to delete personal information collected about them, with some exceptions based on business needs or legal requirements.
- Right to Opt-out: Businesses that sell personal information must allow consumers to opt-out of the sale.
- Right to Opt-In for minors: Explicit consent is required to sell information of consumers under 16. For those under 13, parental or guardian consent is necessary.
- Right to non-discrimination: If a consumer exercises any of their rights under CCPA, a business can’t discriminate against them by denying goods or services, charging different prices, or providing a different quality level of products or services.
4. Ensure data security
- Reasonable security measures: The CCPA doesn’t list specific security measures but expects businesses to apply “reasonable” security practices, fitting the nature and scope of the data and the potential risks.
- Breach notification: If a security breach occurs, businesses may be liable and must notify affected consumers.
5. Establish procedures for handling consumer requests
- Response time:
- Upon receiving a request, businesses have 45 days to respond.
- In certain circumstances, this period can be extended by another 45 days with proper notification to the consumer.
- Verification: Establish a process to verify the identity of the person making the request to prevent fraudulent requests.
- Designate request methods: Provide at least two methods for consumers to submit requests, one of which must be a toll-free number.
6. Manage vendor relationships
- Third-party compliance:
- Ensure that service providers and third parties that handle personal information on your behalf are compliant.
- This often involves revising contracts to include terms about data protection and CCPA adherence.
7. Training and awareness
- Employee training: All individuals responsible for handling consumer inquiries about the company’s privacy practices or CCPA compliance should be informed and trained about the law’s provisions.
Regularly reviewing and updating practices, combined with employee training and a proactive approach to data privacy, can help businesses navigate the intricacies of the CCPA and ensure the rights of consumers are upheld.
CCPA vs GDPR: How they are different?
The California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR) are both landmark pieces of legislation that aim to protect individuals’ personal data.
However, they hail from different jurisdictions and have distinct stipulations. Let’s explore the differences between the two: The GDPR is a regulation that applies to the European Union (EU) member states and has global implications, while the CCPA is state-level legislation from California.
Both regulations have extraterritorial effects, meaning they can impact businesses outside their immediate jurisdiction if they handle data from covered residents.
Differences between CCPA and GDPR:
1. Geographic scope
- Specifically targets businesses that operate in California or handle the personal data of California residents.
- However, due to the global nature of commerce, it effectively has broader implications, especially for online businesses.
- Applicable to all member states of the European Union and addresses the processing and free movement of personal data.
- Any business, irrespective of where it’s based, that processes the personal data of EU residents, must comply.
- This applies to for-profit entities that do business in California and meet specific criteria related to revenue, data processing volume, or the percentage of revenue from selling personal information.
- Covers all entities that process the personal data of EU citizens, whether they are for-profit or not.
- It does not have specific revenue-based thresholds.
3. Definition of personal information/data
- Defines personal information as information that identifies relates to, or could reasonably be linked with a particular consumer or household.
- This includes IP addresses, browsing history, geolocation data, and more.
- Defines personal data as any information relating to an identified or identifiable natural person (‘data subject’).
- It’s a broad definition that encompasses a wide range of personal identifiers.
4. Consumer/rights of data subjects
- Provides California consumers with specific rights like the right to know about the personal information a business collects about them
- How it’s used and disclosed, the right to delete personal information, the right to opt out of the sale of personal information
- And the right to non-discrimination for exercising CCPA rights.
- GDPR:Offers a broader set of rights to data subjects, including the:
- Right to be informed
- Right of access
- Right to rectification
- Right to erasure
- Right to restrict processing
- Right to data portability
- Right to object
- Rights related to automated decision-making and profiling.
5. Penalties for Non-compliance
- Statutory damages for data breaches can range from $100 to $750 per California resident and incident, or actual damages whichever is greater.
- Other violations can attract penalties of up to $2,500 for unintentional violations and $7,500 for intentional ones.
- Can levy fines up to €20 million or 4% of the firm’s global annual revenue from the preceding financial year, whichever is higher.
- This is one of the most stringent penalties in the data protection landscape.
6. Opt-In vs. Opt-out
- Operates on an ‘opt-out’ model for most consumers.
- Businesses can collect data by default, but consumers have the right to opt out.
- However, for consumers under 16, it follows an opt-in model.
- Operates on an ‘opt-in’ model.
- Explicit consent is required before any data collection or processing, and this consent must be freely given, specific, informed, and unambiguous.
Both CCPA and GDPR signify a global shift towards stricter data protection and privacy regulations. Businesses operating internationally need to be aware of these regulations’ nuances and ensure compliance to avoid hefty penalties and protect their reputation.
Summarizing it all together
The CCPA, or the California Consumer Privacy Act, stands as a testament to the shifting paradigm where consumers reclaim control over their personal data.
Through the seven requirements we’ve explored, it’s evident that businesses must take proactive steps to safeguard information, ensure transparency, and empower consumers.
Complying with CCPA isn’t merely about ticking regulatory boxes but fostering a culture of trust and responsibility. As we move forward, it’s clear that CCPA is not just a standard to meet but a challenge to exceed. Businesses that genuinely embrace the principles of the CCPA will not only earn consumer confidence but will also pave the way for a more transparent, trustworthy digital landscape.
CCPA compliance: Related reads
- What is Data Governance? Its Importance, Principles & How to Get Started?
- The Benefits of GDPR Compliance and Data Governance: Protecting Your Data and Your Business
- Key Objectives of Data Governance: How Should You Think About Them?
- Data Governance Framework — Examples, Templates, Standards, Best Practices & How to Create One?
- Data Governance and Compliance: Act of Checks & Balances
- How to implement data governance? Steps, Prerequisites, Essential Factors & Business Case
- How to Improve Data Governance? Steps, Tips & Template
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