To help businesses comply with the California Consumer Privacy Act, Facebook developed a mechanism called “limited data use” this summer and set a transition period to ease brands into its usage. But on Tuesday, this timeframe expired, leaving unaware retailers in a potentially fraught position.
On its blog, Facebook described LDU as “a new feature businesses can use to limit how we use the data they send to Facebook.” It applies to users who opt out of the sale of their personal data under the CCPA regulation, changing the way the platform processes their personal information.
This effort applies to business tools such as the Facebook Pixel. In this context, pixels allow platforms and advertisers to collect user information so ads can be targeted, personalized or remarketed to consumers on the platform and other destinations on the Internet.
But with CCPA, California’s version of Europe’s General Data Protection Regulation, companies of all stripes must comply with stiffer privacy protections — in this case, for consumers located in the state.
Cue LDU. As for how it works, Facebook Business Help Center goes into more detail.
“Limited data use is a parameter that you can send along with your events to limit the use of data from people in California. One reason a business might implement limited data use is because the person is in California and opted out of the sale of their data under the CCPA. When a business enables limited data use, Facebook will process data in accordance with our role as a service provider, with respect to flagged personal information from people in California. This means we will limit use of that data subject to our State-Specific Terms. When limited data use is enabled, a business may notice an impact to campaign performance and effectiveness. Additionally, retargeting and measurement capabilities will be limited.”
What’s at stake are drastic changes to metrics, like a campaign’s performance and effectiveness, as well as how businesses retarget ads or measure results. The social media giant set up a transition period, to give businesses time to integrate LDU into their web sites. The default deadline of July 31 was optionally extended, but has now ended.
In other words, companies that haven’t conformed to the California law may now see their numbers fall off a cliff and find themselves unable to effectively reach target customers.
That may be disastrous for merchants, but it opens up an opportunity for others, like privacy software maker Loginhood.
On Tuesday, the company unveiled its first privacy tool aimed at Facebook, which, according to a company spokeswoman, “allows brands to manage Facebook’s LDU feature, helping to combat these roadblocks.”
The tool automatically navigates the Facebook feature, and Loginhood claims it boosts conversions by 30 percent and cuts customer acquisition costs by 84 percent.
More solutions like this could be on the way, especially if other states adopt similar mandates.
State laws addressing privacy or security in various ways have already passed in Maine, Nevada, Illinois and New York, though these regulations are more narrowly defined than broader consumer protection measures. But tech giants — expecting that momentum will accelerate either on a state-by-state basis or on a federal level — have already begun addressing things like data processing restrictions, opt-in versus opt-out permission structures and other changes.