How Does the New California Privacy Law Affect Other States?
In a recent blog post “What Is The California Consumer Privacy Act (CCPA)?”, we provided an overview of the new California privacy law also known as the CCPA, which took effect on January 1, 2020.
Although the law is state-specific, it is not limited by California’s borders. In fact, for-profit businesses across the country and even around the world may be subject to the CCPA’s broad provisions.
The threshold questions that businesses must ask themselves are: whether the company does business in California, and whether the company has current or potential customers in California. Businesses that answer either question in the affirmative need to comply with the new law if at least one of the following three criteria is met:
- The company’s gross annual revenue exceeds $25 million.
- The company collects, sells, or shares the personal information of 50,000 or more consumers (regardless of where those consumers are physically located.)
- At least one-half of the company’s revenue comes from selling consumers’ personal information.
The CCPA’s definition of doing business in California is broad, exempting only certain insurance-related businesses covered by other state privacy laws, corporate affiliates that do not share a brand with a covered affiliate, and businesses in which every aspect of business transactions takes place outside of California.
Businesses serving Californians must comply with the CCPA if they meet one of the three criteria outlined above and have a web presence that serves or that could serve California residents. Such organizations could find themselves facing penalties and even class action litigation for non-compliance with the law. In fact, the CCPA will impact companies without any physical presence in the state of California, and even companies without a physical presence in the United States.
For businesses that are not subject to the provisions of the CCPA because they lack a nexus with California and its residents, the reprieve may be short-lived. Other states are exploring privacy legislation of their own, using the California law as a model.
At Baer Reed, we provide a variety of low-cost legal support services to businesses around the world. Our teams of expert attorneys can help companies find efficient, effective solutions for CCPA compliance.To learn more, contact us today.
- On January 13, 2020
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