As I discussed a couple of weeks ago on the Ipro blog, California Attorney General Xavier Becerra recently submitted proposed regulations under the California Consumer Privacy Act (CCPA) to the California Office of Administrative Law (OAL). He also requested OAL to conduct an expedited review and declined to delay enforcement of CCPA from the original planned date of July 1st. So, today is CCPA enforcement day! Despite that, many companies may not be ready for CCPA and some of them may be struggling with one requirement in particular, according to one article.
In Legaltech® News (CCPA Wants to Know Value of Consumer Data. So Do Businesses, written by Frank Ready), the author notes that the CCPA mandates businesses publicly disclose the value that consumer data holds to their operation. But chances are that many organizations don’t have an exact dollar figure lying around somewhere.
The “financial incentives” requirement stems from a second round of CCPA revisions that were published by California’s attorney general in March. It prohibits businesses from offering a different price or service based on a consumer’s willingness to exchange personal data, unless that difference is “reasonably related to the value of the data.”
Jarno Vanto, a partner at Crowell & Moring, used video streaming services as an analogy. Users with a standard subscription typically have to engage with some kind of advertising during their viewing experience, while those who wish to forgo commercials altogether will likely have to pay a higher monthly rate in order to compensate for the lost advertising revenue.
But when it comes to consumer data and the CCPA, businesses need consistent metrics or valuations in place in order to defend such a practice. “They actually have to give thought to it [and] document the process in order to justify why they are treating people who exercise their privacy rights differently from those that don’t,” Vanto said.
However, while data has become increasingly important to businesses situated across a variety of industries, that reality isn’t necessarily reflected in an organization’s cultural or accounting practices. Dominique Shelton Leipzig, co-chairwoman of Foley & Lardner’s ad tech privacy and data management practice, indicated that many companies don’t even list data on their accounting statements along with other intangible assets such as trademarks or copyrights.
“I have yet to see a client that has an accounting statement that reflects data that’s not a data company,” she said.
Leipzig believes that many businesses were hopeful that the California Attorney General’s Office would take into account the comments and feedback rendered by various trade groups and associations citing the novelty of the financial incentives requirement and asking for more time to comply. Perhaps this is one of the areas where Becerra will exercise “prosecutorial discretion if warranted”. We’ll see. It will certainly be an additional unprecedented challenge for many organizations this year to go with the all of the other unprecedented challenges they’ve already encountered.
Also, just a reminder that on Wednesday, July 15, ACEDS will conduct the webinar Seeing 20/20: Reasonable and Proportional Discovery in 2020 at 1pm ET (noon CT, 10am PT). Come join Mandi Ross of Prism Litigation Technology, Martin Tully of Actuate Law and me where we’ll discuss challenges with “right-sizing” discovery proportionally and defensibly, what can be leveraged from the rules and relevant case law regarding proportionality, and what best practices can be deployed for quick evaluation of potentially relevant custodians and data sources. Don’t miss it!
So, what do you think? Are you ready for CCPA? Please share any comments you might have or if you’d like to know more about a particular topic.
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