California Takes 'Giant Leap Forward' on Consumer Data-Privacy Rights

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Governor Jerry Brown. Credit: Jason Doiy/ The Recorder [/caption] Gov. Jerry Brown on Thursday afternoon signed into law one of the most far-reaching pieces of consumer privacy legislation in the nation, potentially giving Californians significant control over what companies can do with their personal information. The bill, AB 375, a compromise that was crafted in frantic negotiations in recent weeks, does not take effect until January 2020. The delay will give critics—and there are many—time to try to weaken the bill through legislative amendments. Still, supporters were content to celebrate their success in enacting privacy legislation that corporate behemoths including Google and AT&T had successfully fought off in past years. "Overall I believe this represents a giant leap forward on privacy," said Senate Judiciary Chairwoman Hannah-Beth Jackson, D-Santa Barbara. "I can't wait to see what details Google has collected about me." The California Data Privacy Protection Act requires data-collecting businesses to tell consumers what information they gather from them and who they share it with. It also forces companies to delete that information upon a consumer's request. The bill bars companies from selling data acquired from kids under the age of 13 without their parents' consent. Teens between 13 and 16 must opt in to data-sharing. The bill gives consumers a limited private right of action for data breaches of unencrypted, unredacted information. Similar to provisions in California's Proposition 65, the Safe Drinking Water and Toxic Enforcement Act, the state attorney general would be allowed to step in and take the case. Businesses must also be given a chance to "cure" any violations, although it's unclear how a data breach can be cured after the fact. Stroock Stroock & Lavan partner Stephen Newman said companies, such as those in the financial services industry that he advises, will need to reevaluate "their entire scope of data collection and use, to ensure compliance by the effective date." Newman said he expects the law will generate "significant litigation." "Information about behind-the-scenes analytics, such as that based on transaction patterns, will in some circumstances be required to be disclosed to consumers," Newman said in an email. "Moreover, procedures will need to be established to comply with the provisions giving consumers the right to delete personal information." California, often at the forefront of legislative trends, has probably not created a data-privacy-bill roadmap in this case. The bill was forged as an alternative to a more expansive ballot initiative that San Francisco real estate developer Alistair Mactaggart had qualified for the November ballot. Mactaggart cited work by noted privacy lawyers Chris Hoofnagle, Ashkan Soltani, Lee Chen and Nicole Ozer in drafting the initiative language. Political law firm Remcho Johansen & Purcell worked on the ballot measure. With legislative leaders eager to diffuse a $100 million initiative campaign, two Democratic lawmaker-lawyers, Sen. Bob Hertzberg and Assemblyman Ed Chau, were dispatched to forge a compromise. Mactaggart agreed to withdraw his initiative from the ballot if the governor signed AB 375, which contains many of the measure's main provisions, by a Thursday afternoon procedural deadline. Business, technology and telecommunications groups called the bill deeply flawed but begrudgingly urged its passage as a preferable alternative to the ballot initiative.The bill sailed out of both houses Thursday with bipartisan support. Opponents were said to have already drafted a list of changes they want made in the statute over the next year. "Policymakers around the country looking at what California has done on this issue should understand that the California legislature's work is far from finished and that this law remains a work in progress before it takes effect in January 2020," TechNet president and CEO Linda Moore said in prepared statement. Chau said he had not heard of the list but was willing to consider limited changes, particularly bill language authorizing litigation. "The attorney general may also have some issues that we need to fine tune," Chau said. The secretary of state's office confirmed Thursday afternoon that Mactaggart had withdrawn his initiative from the ballot.

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