Understanding the California Consumer Privacy Act - Squareroot Communications
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Understanding the California Consumer Privacy Act

As the digital world continues to grow, privacy is becoming more important to consumers. In recent years, data breaches have been occurring more and more often, causing consumers to be concerned about the personal information they use online being leaked.

To help combat these fears, the state of California proposed a new law that would help protect user information. With no surprise, the California Consumer Privacy Act (CCPA) was passed and enacted in June of 2018. While the law didn’t go into effect until January of 2020, it was a huge step toward more privacy for the digital landscape.

So, what does CCPA mean for business owners and marketers? This blog is here to answer that question! But first, let’s break down what exactly this new law entails.

Breaking Down CCPA

According to the California Attorney General, the California Consumer Privacy Act “…creates new consumer rights relating to the access to, deletion of, and sharing of personal information that is collected by businesses.”

To put it in layman’s terms, this means that consumers are allowed to demand to see what information a company collects about them as well as decline the sharing or selling of their info. Also, companies have to provide a list of third-party companies the consumers’ info has been shared with. If any of the guidelines of this law are violated, consumers have a right to sue the company.

Although CCPA is a new type of law to the United States, the European Union (EU) is already ahead of the game. In 2018, the EU enacted the General Data Protection Regulation (GDPR), which made a huge change to data privacy laws.

As more countries and states begin implementing privacy laws, businesses that aren’t required to comply at this time should consider tightening the privacy of their website and data collection from consumers.

Which Businesses Have To Comply?

While the California Consumer Privacy Act is a big deal, the law doesn’t affect all businesses. Here are the thresholds that require you to comply:

  • Serving residents in California and earning at least $25 million in annual revenue
  • Having personal data of 50,000 people or more, or if you collect more than half your revenue from selling personal data

It’s also important to note that you don’t need to be based in California/United States to comply with this law. If you serve California residents and meet these qualifications, then you must comply with CCPA. Businesses that have physical storefronts as well as E-commerce businesses both need to comply.

How Does CCPA Affect Advertising?

Because consumers have the option to “opt-out” of data collection and distribution on websites through CCPA, marketers and business owners expressed concern of how it would affect their advertising efforts. However, enacting this new law has the likelihood to strengthen a consumer’s relationship with your business.

As a business owner, you shouldn’t see CCPA or any similar laws as a threat. Because you’re giving the consumer the option to provide their data or opt-out, you’re respecting their privacy. Google provides an incognito mode for their browser and Google Maps and Apple has a private mode as well to already protect when a user is completing online searches.

When it comes to advertising, some consumers want to see personalized ads while others see it as an invasion of privacy. Allowing consumers to decide what information they provide leaves the responsibility in their hands. By giving them the option, it allows businesses and marketers to reach consumers who are more likely to interact with their ads.

Final Thoughts

The state of California saw the need to protect their residents as privacy concerns continued to rise, which is why CCPA was brought into legislation. As the digital world continues to advance, it’s likely that other states will begin to create similar laws to protect residents. Remember, not all businesses have to comply with CCPA at this point, but future laws might have different requirements.

Although the California Consumer Privacy Act is still in its infancy, it’s expected to improve advertising efforts for businesses and marketers while also respecting the privacy of online consumers.

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