A new ballot initiative would create the California Privacy Rights and Enforcement Act (“CPREA”) and would make several changes to the California Consumer Privacy Act (“CCPA”).

CPREA makes the following changes and additions:

  • California Privacy Protection Agency: This ballot initiative would establish the California Privacy Protection Agency (“CPPA”), which would be comprised of five members appointed by members of the California government. The CPPA would be tasked with adopting rules, appointing a Chief Privacy Auditor who would proactively audit businesses for compliance, and bringing enforcement actions.
  • Additional Disclosures: CPREA would require that businesses tell consumers whether they profile them in certain circumstances (such as where profiling is reasonably expected to have an effect on financial loans or education admissions), together with the “logic involved” in using personal information for such profiling. Additionally, businesses that use personal information for political purposes would also be subject to specific disclosure obligations, including identification of the candidates, committees, or ballot measures for which personal information is used.
  • Amended Definition of Sale: Notably, the CPREA would define “sale” to include transfers of personal information not only for monetary or other valuable consideration, but also disclosures “otherwise for a commercial purpose, including but not limited to cross-context behavioral advertising.” This edit is similar to the broader “sale” definition proposed in the original ballot initiative, which did not require any consideration and was explicitly rejected by the California legislature. “Cross-context behavioral advertising” is defined as the “targeting of advertising to a consumer based on a profile of the consumer including predictions derived from the consumer’s personal information, where such profile is related to the consumer’s activity over time and across multiple businesses or across multiple, distinctly-branded websites, application, or services.” For consumers who opt-out of the sale of their personal information or opt-out of the use or disclosure of personal information for advertising and marketing, the ballot initiative would require businesses to wait for at least 12 months before requesting authorization to sell, or use and disclose, the consumer’s personal information.
  • Sensitive Personal Information: CPREA creates a new category of “sensitive personal information.” CPREA provides consumers with the right to opt-out of the use or disclosure of their sensitive personal information “for advertising and marketing,” which is defined to include communications 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. “Sensitive information” includes (for example) financial information, health information, race and religion, and precise geolocation information. Notably, sensitive information already is heavily regulated under other federal and state privacy laws.
  • Heightened Protection for Consumers under 16 years of age: Businesses would not be permitted to collect personal information of consumers less than 16 without opt-in consent if the business has actual knowledge that the consumer is less than 16.
  • Creates New Regulated Entities and Relationships: The CPREA introduces the role of a “contractor.” The ballot initiative would require that contractors be subject to contractual restrictions, including prohibitions on the sale of personal information, restrictions on retaining and using personal information, and certifications to the business.
  • Private Right of Action: As drafted, the private right of action is available for certain data breaches that result from unreasonable security practices and only if a business does not cure the “violation” within 30 days’ notice by a plaintiff. CPREA would expressly state that the implementation and maintenance of reasonable security procedures and practices following a breach would not constitute a cure that would serve as a defense to a claim.

The author of the ballot initiative intends to include this proposal on the November, 2020 ballot.