CCPA vs CPRA: The Big Differences and Why They Matter for Digital Businesses – Expanded Edition

Introduction

Data is the lifeblood of business. But as companies collect and process more information, the need for robust privacy regulations has never been greater.

Enter the California Consumer Privacy Act (CCPA) and its successor, the California Privacy Rights Act (CPRA). These landmark legislations have set new benchmarks for consumer data protection, but they’re not identical twins.

Understanding the critical differences between the two is crucial for any digital business aiming to operate successfully while staying compliant. This expanded post will delve deeper into these differences, why they matter, and what steps companies can take to ensure compliance.

California Consumer Privacy Act (CCPA)

The CCPA was a pioneering piece of legislation when it came into effect in 2018. It was one of the first laws in the United States that gave consumers the right to know what personal information businesses collect about them, how they use it, and who they share it with. The CCPA also empowered consumers to request the deletion of their data and to opt out of selling their personal information.

CCPA Compliance Checklist

TaskDescription
Determine ApplicabilityEnsure your business meets the criteria for CCPA compliance based on revenue, data handling, and business model.
Data MappingIdentify what types of personal information you collect, how you collect it, and with whom you share it.
Privacy Policy UpdateUpdate your privacy policy to include all CCPA-required disclosures.
Consumer RightsImplement processes to respond to consumer requests for data access, deletion, and opt-out of sales.
Data SecurityImplement reasonable security measures to protect consumer data from unauthorized access or disclosure.
Employee TrainingTrain employees who handle consumer inquiries about how to comply with the CCPA.
Record-KeepingMaintain records of consumer requests and how you responded for at least 24 months.
Regular AuditsConduct regular audits to ensure ongoing compliance with CCPA requirements.

Who is exempt from CCPA?

Under the CCPA, certain exemptions exist for specific entities and types of information. Here’s a breakdown:

  1. Business Size and Activity:
    • Businesses that do not meet the CCPA’s specific thresholds are exempt. For instance, a business is only subject to the CCPA if it has gross annual revenues over $25 million; buys, sells, receives, or shares for commercial purposes the personal information of 50,000 or more consumers, households, or devices; or derives 50% or more of its annual revenues from selling consumers’ personal information.
  2. Other Regulatory Frameworks:
    • Health Information: Personal health information that is collected by a business covered by the California Confidentiality of Medical Information Act (CMIA) or federal laws such as the Health Insurance Portability and Accountability Act (HIPAA) and the Health Information Technology for Economic and Clinical Health (HITECH) Act is exempt from CCPA.
    • Financial Information: Personal information collected, processed, sold, or disclosed pursuant to the federal Gramm-Leach-Bliley Act (GLBA) or the California Financial Information Privacy Act (FIPA) is also exempt.
  3. Employee Data (Temporary Exemption):
    • As of my last training data in January 2022, the CCPA temporarily exempted personal information collected from job applicants, employees, business owners, directors, officers, medical staff, or contractors from most of its provisions. However, this exemption was set to expire at the end of 2022, so you might want to check the latest status on this.
  4. B2B Transactions (Temporary Exemption):
    • Personal information arising from business-to-business (B2B) communications or transactions regarding due diligence or providing or receiving products or services was also temporarily exempt from most CCPA provisions. This exemption was also set to expire at the end of 2022.
  5. Non-Profit Organizations:
    • Non-profit organizations are not considered “businesses” under the CCPA and are therefore exempt.
  6. Data Covered by Other California Privacy Laws:
    • Certain data that’s regulated by other California privacy laws, like the California Driver’s Privacy Protection Act, is exempt.

Businesses must understand that while certain types of data or certain entities may be exempt from the CCPA, they may still be subject to other privacy regulations, either in California or elsewhere.

The Evolution: California Privacy Rights Act (CPRA)

The CPRA, enacted in 2020, builds on the foundation laid by the CCPA but takes consumer privacy to the next level. It introduces new rights, such as the right to correct inaccurate personal information and the right to limit the use of “sensitive personal information.” It also establishes a new enforcement body, the California Privacy Protection Agency, which can issue penalties for non-compliance.

What is the CPRA compliance?

CPRA (California Privacy Rights Act) compliance means adhering to the provisions and requirements set forth by the CPRA, which builds upon and enhances the CCPA (California Consumer Privacy Act). Here’s a broad overview of what CPRA compliance entails:

  1. Determine Applicability:
    • Verify if your business falls under the scope of the CPRA. This involves considering clarified thresholds like annual revenue, the number of California residents’ personal information your business buys, sells, or shares, and the percentage of revenue derived from these activities.
  2. Data Mapping and Minimization:
    • Understand the types of personal information you collect and ensure you collect only what is necessary for the intended purpose. This is in line with the principle of data minimization.
  3. Update Privacy Policy:
    • Your privacy policy should be revised to include CPRA-specific disclosures. This includes how you handle sensitive personal information and the new rights consumers have under the CPRA.
  4. Consumer Rights:
    • Extend your processes to accommodate new consumer rights introduced by the CPRA. These include the right to correct personal information and the right to limit the use and disclosure of sensitive personal information.
  5. Data Security and Risk Assessment:
    • Implement more robust security measures to protect consumer data. Regular risk assessments should be conducted to identify and mitigate potential vulnerabilities.
  6. Employee Training:
    • Update training programs for employees to include CPRA-specific requirements and procedures, ensuring that they know how to handle consumer inquiries and requests correctly.
  7. Record-Keeping:
    • Maintain detailed records of consumer requests, your responses, and any data breaches. These records are essential for auditing purposes and to demonstrate compliance.
  8. Global Privacy Control:
    • Implement mechanisms to recognize and respect global privacy control signals sent by consumers. These signals may indicate a consumer’s preference regarding the sale or sharing of their personal information.
  9. Regular Audits and Updates:
    • Continuously monitor your practices to ensure compliance with the CPRA. Regularly conduct audits and make necessary updates to remain compliant.
  10. Sensitive Personal Information:

The CPRA introduces the concept of “sensitive personal information,” which includes precise geolocation, race, religion, genetic data, private communications, and more. Businesses must provide consumers with the option to limit the use and disclosure of this sensitive information.

  1. Establishment of the California Privacy Protection Agency:

The CPRA establishes a new enforcement body, the California Privacy Protection Agency (CPPA). Businesses must be prepared for increased regulatory scrutiny and the potential for penalties from this new agency.

  1. Vendor Management:
  • Businesses must ensure that their vendors and third-party service providers also comply with the CPRA. Contracts and agreements may need to be revised to ensure that vendors handle personal information in a manner consistent with the CPRA’s requirements.

CPRA Compliance Checklist

TaskDescription
Determine ApplicabilityVerify if your business falls under the scope of the CPRA, considering the clarified thresholds.
Data Mapping and MinimizationKnow what data you collect and ensure you collect only what is necessary for the intended purpose.
Update Privacy PolicyRevise your privacy policy to include CPRA-specific disclosures, including the handling of sensitive personal information.
Consumer RightsExtend your processes to accommodate new consumer rights like data correction and limiting the use of sensitive personal information.
Data Security and Risk AssessmentImplement robust security measures and conduct regular risk assessments.
Employee TrainingUpdate employee training programs to include CPRA-specific requirements and procedures.
Record-KeepingKeep detailed records of consumer requests, your responses, and any data breaches for auditing purposes.
Global Privacy ControlImplement mechanisms to recognize and respect global privacy control signals from consumers.
Regular Audits and UpdatesContinuously monitor compliance and update your practices as needed.

Who is required to comply with the CPRA?

Businesses that fall under the CPRA’s scope must comply. This generally includes businesses that:

  1. Have gross annual revenues exceeding $25 million.
  2. Buy, sell, or share the personal information of 100,000 or more California residents or households annually.
  3. Derive 50% or more of their annual revenue from selling or sharing California residents’ personal information.

Furthermore, the CPRA applies to any entity that controls or is controlled by a business that meets these criteria and shares common branding with the business.

Why These Differences Matter for Digital Businesses

Complexity and Compliance

The CPRA introduces several new elements that make compliance more complex. From data minimization to handling sensitive personal information, businesses have more responsibilities under the CPRA. Understanding these nuances is crucial for maintaining compliance and avoiding hefty fines.

Building Trust Through Enhanced Consumer Rights

The CPRA goes beyond the CCPA by granting consumers additional rights, such as the right to correct inaccurate information and to limit the use of sensitive personal information. This is an opportunity for digital businesses to build stronger relationships with consumers by offering more control over their data.

Risk Mitigation in a Stricter Regulatory Environment

With the establishment of the California Privacy Protection Agency, the CPRA significantly ups the ante on enforcement. This makes risk mitigation more critical than ever. Businesses must proactively ensure compliance to avoid the reputational and financial risks associated with data breaches or non-compliance.

Competitive Advantage in a Privacy-Conscious Market

In today’s digital landscape, consumers are increasingly aware of the importance of data privacy. Businesses demonstrating robust data protection practices will stand out from the competition. Being ahead of the curve in CPRA compliance can be a significant competitive advantage.

CPRA and Cookie Consent Banners: A New Layer of Complexity

The CPRA doesn’t just build on the CCPA’s foundational principles; it adds new layers of complexity that digital businesses need to navigate, especially regarding cookie consent banners. Under the CPRA, the definition of “sale” of personal information has been expanded to include “sharing” of personal information, particularly for advertising purposes. This means that your cookie consent banner can’t just be a simple opt-in or opt-out option for data collection; it needs to provide clear choices for users to opt out of the sale and share their personal information.

Cookie consent banners under CPRA must also be more explicit about the types of sensitive personal information collected. This could include financial data, geolocation, race, ethnicity, and even religious or philosophical beliefs. The banner should allow users to limit the use and disclosure of this sensitive information. Essentially, the CPRA mandates a more granular level of control for consumers, and your cookie consent banner is the first line of defense in offering that control.

Why Cookie Consent Banners Matter More Under CPRA

In the era of CPRA, cookie consent banners are not just a compliance requirement; they’re a strategic asset for building consumer trust and brand integrity. A well-designed, CPRA-compliant cookie consent banner can serve as a strong signal to consumers that your business takes data privacy seriously. It’s an opportunity to be transparent about your data collection and sharing practices right from the first point of interaction with the consumer.

Moreover, with the establishment of the California Privacy Protection Agency, the CPRA brings in a more robust enforcement mechanism. This makes it critical for businesses to get their cookie consent banners right. A poorly designed or non-compliant banner could attract regulatory scrutiny and result in hefty fines, not to mention the reputational damage it could cause.

Did the CPRA replace the CCPA?

No, the CPRA did not replace the CCPA. Instead, the CPRA builds upon the CCPA by introducing new provisions and expanding on existing ones. While the CPRA amends and augments many aspects of the CCPA, the foundational principles of the CCPA remain intact. The CPRA can be seen as an evolution of the CCPA, aimed at addressing gaps and providing clearer guidance on specific areas of consumer data privacy.

Conclusion

The transition from CCPA to CPRA is not just a matter of legal compliance; it’s a strategic move that can impact your business’s success in the digital marketplace. The CPRA’s more stringent requirements offer businesses an opportunity to elevate their data protection practices, build stronger consumer relationships, and gain a competitive edge.

In a world where data breaches and privacy concerns are becoming increasingly common, understanding the intricacies of privacy laws like the CCPA and CPRA is not just good governance—it’s innovative business. So invest the time and resources to understand these laws, implement robust compliance measures, and turn data protection into a business asset rather than a liability.