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 privacy, cyber security, and technology transaction issues, including helping clients with their most complex privacy challenges and the development of governance frameworks and processes to comply with global privacy laws. She routinely supports…

Libbie Canter represents a wide variety of multinational companies on privacy, cyber security, and technology transaction issues, including helping clients with their most complex privacy challenges and the development of governance frameworks and processes to comply with 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 privacy laws, including the California Consumer Privacy Act and California Privacy Rights Act.

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.

As part of her practice, she also regularly represents clients in strategic transactions involving personal data and cybersecurity risk. She advises companies from all sectors on compliance with laws governing the handling of health-related data. Libbie is recognized as an Up and Coming lawyer in Chambers USA, 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 counsels national and multinational companies across industries on data privacy, cybersecurity, and emerging technologies, including Artificial Intelligence and Internet of Things.

In particular, Jayne advises clients on compliance with federal, state, and global privacy frameworks, and counsels clients on navigating the…

Jayne Ponder counsels national and multinational companies across industries on data privacy, cybersecurity, and emerging technologies, including Artificial Intelligence and Internet of Things.

In particular, Jayne advises clients on compliance with federal, state, and global privacy frameworks, and counsels clients on navigating the rapidly evolving legal landscape. Her practice includes partnering with clients on the design of new products and services, drafting and negotiating privacy terms with vendors and third parties, developing privacy notices and consent forms, and helping clients design governance programs for the development and deployment of Artificial Intelligence and Internet of Things technologies.

Jayne routinely represents clients in privacy and consumer protection enforcement actions brought by the Federal Trade Commission and state attorneys general, including related to data privacy and advertising topics. She also helps clients articulate their perspectives through the rulemaking processes led by state regulators and privacy agencies.

As part of her practice, Jayne 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.