On May 28, 2023, the Texas legislature passed the Texas Data Privacy and Security Act, making it the sixth state to pass a comprehensive data privacy law this year.  The Act shares many similarities with Virginia, although there are some distinctions.  If signed into law, the Act would take effect on July 1, 2024.  This blog post summarizes the Act’s key takeaways.

  • Scope: The Act applies to a person that (1) conducts business in Texas or produces products or services consumed by Texas residents, and (2) processes or engages in the sale of personal data (“sale” means a disclosure of personal data to a third party for “monetary or other valuable consideration”).  The second prong of this language is not found in other comprehensive state privacy laws and so does not have a well-settled interpretation.   The scope of the Act also excludes a small business as defined by the United States Small Business Administration, except with respect to the provision that requires small businesses to obtain consumer consent prior to selling sensitive data.
  • Consumer Rights:  Consumers have rights to: (1) confirm whether a controller is processing their personal data and access such personal data; (2) correct inaccuracies in the consumer ’s personal data; (3) delete personal data provided by or obtained about the consumer; (4) obtain a portable copy of the consumer’s personal data and (5) opt-out of processing for purposes of (a) targeted advertising (defined as displaying advertisements that are selected based on the consumer’s activities over time and across nonaffiliated websites), (b) the sale of personal data; or (c) profiling (definition is limited to “solely automated processing”) in furtherance of decisions that produce legal or similarly significant effects concerning the consumer.  The Act also requires controllers to implement opt-out preference signals by January 1, 2025.
  • Sensitive Data: Controllers must obtain consent before processing a consumer’s sensitive data.  Sensitive data is defined as personal data revealing racial or ethnic origin, religious beliefs, a mental or physical health diagnosis, sexuality, or citizenship or immigration status; genetic or biometric data processed to identify individuals; personal data collected from a known child; and precise geolocation data (i.e., identifies a consumer within a radius of 1,750 ft.).  If a controller sells sensitive data or biometric data, it must post a specific notice (i.e., “NOTICE: We may sell your [sensitive/biometric] personal data.”) in its privacy notice.
  • Controller & Processor Contracts:  The Act uses the terms “controller” and “processor.”  Under the Act, processors must assist controllers in meeting their obligations, including responding to consumer requests and conducting data protection assessments.  The Act would require certain contractual terms between controllers and processors, including those requiring the processor to maintain a duty of confidentiality.
  • Data Protection Assessments: The Act requires controllers to conduct data protection assessments of processing activities that involve targeted advertising, the sale of personal data, profiling (in limited circumstances), sensitive data, or otherwise present a heightened risk of harm to consumers. 
  • Enforcement & Cure: The Texas Attorney General has the exclusive authority to enforce the Act.  The Act provides controllers and processors with a 30-day cure period, which would not expire.
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Photo of Libbie Canter Libbie Canter

Libbie Canter represents a wide variety of multinational companies on managing privacy, cyber security, and artificial intelligence risks, including helping clients with their most complex privacy challenges and the development of governance frameworks and processes to comply with U.S. and global privacy laws.

Libbie Canter represents a wide variety of multinational companies on managing privacy, cyber security, and artificial intelligence risks, including helping clients with their most complex privacy challenges and the development of governance frameworks and processes to comply with U.S. and global privacy laws. She routinely supports clients on their efforts to launch new products and services involving emerging technologies, and she has assisted dozens of clients with their efforts to prepare for and comply with federal and state laws, including the California Consumer Privacy Act, the Colorado AI Act, and other state laws. As part of her practice, she also regularly represents clients in strategic transactions involving personal data, cybersecurity, and artificial intelligence risk and represents clients in enforcement and litigation postures.

Libbie represents clients across industries, but she also has deep expertise in advising clients in highly-regulated sectors, including financial services and digital health companies. She counsels these companies — and their technology and advertising partners — on how to address legacy regulatory issues and the cutting edge issues that have emerged with industry innovations and data collaborations. 

Chambers USA 2024 ranks Libbie in Band 3 Nationwide for both Privacy & Data Security: Privacy and Privacy & Data Security: Healthcare. Chambers USA notes, Libbie is “incredibly sharp and really thorough. She can do the nitty-gritty, in-the-weeds legal work incredibly well but she also can think of a bigger-picture business context and help to think through practical solutions.”

Photo of Lindsey Tonsager Lindsey Tonsager

Lindsey Tonsager co-chairs the firm’s global Data Privacy and Cybersecurity practice. She advises clients in their strategic and proactive engagement with the Federal Trade Commission, the U.S. Congress, the California Privacy Protection Agency, and state attorneys general on proposed changes to data protection…

Lindsey Tonsager co-chairs the firm’s global Data Privacy and Cybersecurity practice. She advises clients in their strategic and proactive engagement with the Federal Trade Commission, the U.S. Congress, the California Privacy Protection Agency, and state attorneys general on proposed changes to data protection laws, and regularly represents clients in responding to investigations and enforcement actions involving their privacy and information security practices.

Lindsey’s practice focuses on helping clients launch new products and services that implicate the laws governing the use of artificial intelligence, data processing for connected devices, biometrics, online advertising, endorsements and testimonials in advertising and social media, the collection of personal information from children and students online, e-mail marketing, disclosures of video viewing information, and new technologies.

Lindsey also assesses privacy and data security risks in complex corporate transactions where personal data is a critical asset or data processing risks are otherwise material. In light of a dynamic regulatory environment where new state, federal, and international data protection laws are always on the horizon and enforcement priorities are shifting, she focuses on designing risk-based, global privacy programs for clients that can keep pace with evolving legal requirements and efficiently leverage the clients’ existing privacy policies and practices. She conducts data protection assessments to benchmark against legal requirements and industry trends and proposes practical risk mitigation measures.

Photo of Jorge Ortiz Jorge Ortiz

Jorge Ortiz is an associate in the firm’s Washington, DC office and a member of the Data Privacy and Cybersecurity and the Technology and Communications Regulation Practice Groups.

Jorge advises clients on a broad range of privacy and cybersecurity issues, including topics related to…

Jorge Ortiz is an associate in the firm’s Washington, DC office and a member of the Data Privacy and Cybersecurity and the Technology and Communications Regulation Practice Groups.

Jorge advises clients on a broad range of privacy and cybersecurity issues, including topics related to privacy policies and compliance obligations under U.S. state privacy regulations like the California Consumer Privacy Act.

Photo of Jayne Ponder Jayne Ponder

Jayne Ponder provides strategic advice to national and multinational companies across industries on existing and emerging data privacy, cybersecurity, and artificial intelligence laws and regulations.

Jayne’s practice focuses on helping clients launch and improve products and services that involve laws governing data privacy…

Jayne Ponder provides strategic advice to national and multinational companies across industries on existing and emerging data privacy, cybersecurity, and artificial intelligence laws and regulations.

Jayne’s practice focuses on helping clients launch and improve products and services that involve laws governing data privacy, artificial intelligence, sensitive data and biometrics, marketing and online advertising, connected devices, and social media. For example, Jayne regularly advises clients on the California Consumer Privacy Act, Colorado AI Act, and the developing patchwork of U.S. state data privacy and artificial intelligence laws. She advises clients on drafting consumer notices, designing consent flows and consumer choices, drafting and negotiating commercial terms, building consumer rights processes, and undertaking data protection impact assessments. In addition, she routinely partners with clients on the development of risk-based privacy and artificial intelligence governance programs that reflect the dynamic regulatory environment and incorporate practical mitigation measures.

Jayne routinely represents clients in enforcement actions brought by the Federal Trade Commission and state attorneys general, particularly in areas related to data privacy, artificial intelligence, advertising, and cybersecurity. Additionally, she helps clients to advance advocacy in rulemaking processes led by federal and state regulators on data privacy, cybersecurity, and artificial intelligence topics.

As part of her practice, Jayne also advises companies on cybersecurity incident preparedness and response, including by drafting, revising, and testing incident response plans, conducting cybersecurity gap assessments, engaging vendors, and analyzing obligations under breach notification laws following an incident.

Jayne maintains an active pro bono practice, including assisting small and nonprofit entities with data privacy topics and elder estate planning.