On September 25, Alastair Mactaggart, the Founder and Chair of the Californians for Consumer Privacy and the drafter of the initiative that ultimately resulted in the California Consumer Privacy Act (CCPA), announced a newly filed ballot measure to further expand the CCPA (currently effective on January 1, 2020), titled the “California Privacy Rights and Enforcement Act of 2020” (the Act) (an additional version of the Act is available with comments from McTaggart’s team). The Act would result in significant amendments to the CCPA, including the following, among others

  • Sensitive personal information. The Act sets forth additional obligations in connection with a business’s collection, use, sale, or disclosure of “sensitive personal information,” which is a new term introduced by the Act. “Sensitive personal information” includes categories such as health information; financial information (stated as, “a consumer’s account log-in, financial account, debit card, or credit card number in combination with any required security or access code, password, or credentials allowing access to an account”); racial or ethnic origin; precise geolocation; or other data collected and analyzed for the purpose of identifying such information.
  • Disclosure of sensitive personal information. The Act expands on the CCPA’s disclosure requirements to include, among other things, a requirement for businesses to specify the categories of sensitive personal information that will be collected, disclose the specific purposes for which the categories of sensitive personal information are collected or used, and disclose whether such information is sold. In addition, the Act prohibits a business from collecting additional categories of sensitive personal information or use sensitive personal information collected for purposes that are incompatible with the disclosed purpose for which the information was collected, or other disclosed purposes reasonably related to the original purpose for which the information was collected, unless notice is provided to the consumer.
  • Contractual requirements. The Act sets forth additional contractual requirements and obligations that apply when a business sells personal information to a third party or discloses personal information to a service provider or contractor for a business purpose. Among other things, the Act obligates the third party, service provider, or contractor to provide at least the same level of privacy protection required by the Act. The contract must also require the third party, service provider, or contractor to notify the business if it makes a determination that it can no longer meet its obligation to protect the personal information as required by the Act.
  • Eligibility for financial or lending services. The Act would require a business that collects personal information to disclose whether the business is profiling consumers and using their personal information for purposes of determining eligibility for, among other things, financial or lending services, housing, and insurance, as well as “meaningful information about the logic involved in using consumers’ personal information for this purpose.” Additionally, the business appears required to state in its privacy policy notice if such profiling had, or could reasonably have been expected to have, a significant, adverse effect on the consumers with respect to financial lending and loans, insurance, or any other specific categories that are enumerated. Notably, while Mactaggart has expressed heightened concern with sensitive personal information, such as health and financial information, the Act appears to retain the CCPA’s current exemptions under the Fair Credit Reporting Act and the Gramm-Leach-Bliley Act.
  • Advertising and marketing opt-out. The Act includes a consumer’s right to opt-out, at any time, of the business’s use of their sensitive personal information for advertising and marketing or disclosure of personal information to a service provider or contractor for the same purposes. The Act requires that businesses provide notice to consumers that their sensitive personal information may be used or disclosed for advertising or marketing purposes and that the consumers have “the right to opt-out” of its use or disclosure. “Advertising and marketing” means a communication by a business or a person acting on the business’s behalf in any medium intended to induce a consumer to buy, rent, lease, join, use, subscribe to, apply for, provide, or exchange products, goods, property, information, services, or employment.
  • Affirmative consent for sale of sensitive personal information. The Act expands on the CCPA’s opt-out provisions and prohibits businesses from selling a consumer’s sensitive personal information without actual affirmative authorization.
  • Right to correct inaccurate information. The Act provides consumers with the right to require a business to correct inaccurate personal information.
  • Definition of business. The Act revises the definition of “business” to:
    • Clarify that the time period for calculating annual gross revenues is based on the prior calendar year;
    • Provide that an entity meets the definition of “business” if the entity, in relevant part, alone or in combination, annually buys the personal information of 100,000 or more consumers or households;
    • Include a joint venture or partnership composed of business in which each business has at least a 40% interest; and
    • Provides a catch-all for businesses not covered by the foregoing bullets.
  • The “California Privacy Protection Agency.” The Act creates the California Privacy Protection Agency, which would have the power, authority, and jurisdiction to implement and enforce the CCPA (powers that are currently vested in the attorney general). The Act states that the Agency would have five members, including a single Chair, and the members would be appointed by the governor, the attorney general, and the leaders of the senate and assembly.

If passed, the Act would become operative on January 1, 2021 and would apply to personal information collected by a business on or after January 1, 2020.