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What is the California Privacy Rights Act (CPRA)?

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Introduction

The California Privacy Rights Act (CPRA) is California’s state legislation that deals with protecting the digital privacy of its residents. Going into effect on January 1, 2023, it mandates all businesses to audit their data collection, storage, processing and sharing mechanisms to ensure they are in compliance with the law.

The CPRA builds on an earlier piece of legislation known as the California Consumers Privacy Act (CCPA), which came into effect on January 1, 2020. The CPRA will be enforced by the first dedicated data protection authority in the United States: the California Privacy Protection Agency (CPPA).

What is the Purpose of CPRA?

When the General Data Protection Regulation (GDPR) came into effect in 2018, it was meant to ensure that any organization dealing with the personal data collected within the EU would have to take concrete efforts to protect it and the privacy of the data subjects whom it concerns. It didn’t matter if the organization operated from inside the EU or based elsewhere as it applied to any company that dealt with the personal data of data subjects who were residents of the EU.

The California Privacy Rights Act (CPRA) is similar in its scope as it applies to ‘for profit’ entities dealing with the personal information of Californian residents which meets one of three criterias. The three criteria for a business to fall under the CPRA’s jurisdiction are:

Firstly, businesses that share the personal information (PI) of at least 100,000 consumers or households will be subject to the CPRA. This is an update on the CCPA’s earlier threshold of 50,000 consumers, making it a friendlier piece of legislation for small-to-medium enterprises.

Secondly, a business that makes $25 million in gross revenue by January 1 of the preceding year will find itself subject to the California Privacy Rights Act regulations as well.

Lastly, businesses that receive 50% or more of their gross revenues from sharing or selling personal information collected on users also come under CPRA’s jurisdiction.

What is CPPA?

After the CPRA was passed, it established the California Privacy Protection Agency (CPPA) as the primary body responsible for safeguarding all Californian’s digital privacy. The CPRA gives the CPPA full legal, administrative, and enforcement rights when it comes to matters related to CPRA. The CPPA’s board comprises 5 members in addition to a chairperson and an executive director.

The CPPA has 4 primary responsibilities in relation to the CPRA: education, rulemaking, enforcement, and certifications. The CPPA has an annual budget of $10 million to aid it in its efforts to carry out these responsibilities.

The CPPA has the power to certify businesses that are CPRA compliant. This certification can be used by businesses and entities that do not have to conform to CPRA regulations but want to voluntarily illustrate that their data protection practices are of the highest standards possible.

Moreover, considering California is one of the most lucrative business locations in the world, companies might find that a CPPA-certification gives them an additional competitive edge in a more privacy-aware consumer market.

When Do You Need to Comply with California Privacy Rights Act (CPRA)?

Businesses doing business in California and which fall under the CPRA have until January 1, 2023, to comply with this new regulation.

However, businesses will only be fined for offenses or violations of the CPRA from July 1, 2023, onwards.

Does the CPRA Replace the CCPA?

For a business in California, it is natural to wonder, “does the CPRA replace the CCPA?” and whether the CCPA still applies. While the CPRA aims to replace the CCPA, it is important to note that the CPRA amends the CCPA and therefore acts as more of an “upgrade” rather than a replacement. Thus, till the date of application of the CPRA arrives, businesses who are covered under the CCPA shall continue to comply with the law and its associated regulations.

The CPRA does not come into effect until January 1, 2023. This means that businesses now have a year left to modify their data collection practices and become CPRA compliant. Most of these businesses are likely to already be CCPA compliant. Hence, it would help to know the key differences between the CCPA and CPRA and what practices they’ll need to amend.

New Regulations in the CPRA

The California Privacy Rights Act (CPRA) introduced new requirements related to the protection and management of personal information of consumers. Here’s what you should know:

CPRA Creates a New Category of Sensitive Personal Information (SPI)

The CPRA creates a new category of personal information called Sensitive Personal Information (SPI), which is subject to stricter disclosure and purpose limitation requirements. Since the CPRA also specifies that security measures for data must be appropriate for the data type; it would be reasonable to assume that, SPI would require additional safeguards and protections.

Most importantly, the CPRA offers customers the ability to request that businesses limit the usage of consumer’s SPI. SPI contains very sensitive information sets such as:

  • Social Security Number;
  • Driver’s license;
  • State identification card;
  • Passport Number;
  • Financial account information and log-in credentials;
  • Debit Card or Credit Card number along with access codes;
  • Precise geolocation data;
  • Religious or philosophical beliefs;
  • Ethnic origin;
  • Contents of communication;
  • Genetic data;
  • Biometric information for identification;
  • Health information;
  • Information about sex or sexual orientation.

CPRA Demands New Links on a Website

The CPRA revises the standards for how a website enables users to exercise their right to limit the use of their SPI and adds a requirement for how a website enables users to opt-out of having their PI sold or shared.

The CPRA modifies the CCPA's Do Not Sell button, requiring a website to have a link that says "Do Not Sell Or Share My Personal Information.”

The CPRA also adds a new obligation for a website to have a link labeled "Limit The Use Of My Sensitive Personal Information," enabling Californians to control how their SPI is used and disclosed.

Furthermore, the CPRA recommends enterprises to create "a single, clearly labeled link" that allows consumers to opt-out of the sale or sharing of PI while also limiting the use or disclosure of their SPI.

CPRA Creates New DSRRequests and Amends Existing CCPA Rights

  • Right to correction - Consumers have the right to request that their PI and SPI be changed if they discover that it is incorrect.
  • Right to opt-out of automated decision making - Californians can refuse to have their PI and SPI used to make automated conclusions, such as profiling for targeted behavioral advertising.
  • Right to know about automated decision making - Californians can ask for information on how automated decision technologies work and their likely outcomes.
  • Right to limit the use of sensitive personal information - Californians can compel corporations to limit the use of special categories of personal data, particularly when it comes to third-party sharing.
  • Right to Delete - Consumers can now request that businesses direct third-party suppliers, service providers, or contractors to erase personal information that the company may have sold or shared with them.
  • Right to Access - Businesses are now required to also report all PI data they have shared with third parties and the third parties with whom they have shared the PI.
  • Right to Opt-Out - Data subjects now have the option to opt-out of having their personal information sold or shared with third parties, including for cross-context behavioral advertising.
  • Right to Data Portability - Data subjects have the right to request that organizations send certain pieces of personal information to another entity. This transmission, however, must be technically feasible for the company.
  • Right of Minors - Businesses must now notify minors if they intend to sell or share their personal information. It's also worth noting that if a consumer under the age of 16 refuses to give their approval for a business to sell or share their personal information, the business must either wait another 12 months or wait until the consumer becomes 16 before asking for their opt-in consent again.

CPRA Governs Behavioral Advertising

The California Privacy Rights Act (CPRA) modifies the CCPA to govern behavioral advertising that uses personal information to profile California citizens and promote advertisements.

CPRA introduces the California Privacy Protection Agency (CPPA)

As mentioned before, the California Privacy Protection Agency (CPPA) is designated as the principal enforcer and supervisor of the CPRA data privacy regime. It is the first dedicated data protection authority created within the USA.

CPRA takes inspiration from EU’s GPDR

CPRA adds GDPR-like provisions to the CCPA, such as data minimization and retention requirements as long as mandating businesses which undertake ‘risky processing’ to conduct and publish risk assessments.

How CPRA Affects an Organizations’ Data Privacy Policy

When the new California Privacy Rights Act (CPRA) takes effect in January 2023, it will have an impact on how companies ensure that customers know what data is being collected on them. Here are the key areas where the most noticeable impact will take place:

Collection Notice:

Under the CCPA, websites are already required to make sure customers know exactly when their data is being collected. However, under the California Privacy Rights Act (CPRA), organizations will be required to go into additional detail about how and why they need to collect a user’s data. The three main additional notices include the responsibility to disclose if the organizations share their personal information (PI), collect any of their sensitive personal information (SPI), and how long will they retain the data being collected.

Privacy Policy:

It is natural that the new CPRA regulation will require companies to alter their existing privacy policies. The most notable changes include letting the user know if they plan to “share” their data in addition to “selling” their data. Under the CCPA, companies only needed to let users know if they planned on selling their data.

Rights of Customers Under CPRA

The new CPRA guarantees all residents in California certain rights. It is the responsibility of all businesses that fall under the CPRA’s jurisdiction to ensure these rights are fulfilled. An exhaustive list of CPRA rights include:

  • Right to Delete Personal Information
  • Right to Correct Inaccurate Personal Information
  • Right to Know What Personal Information is Being Collected
  • Right to Access Personal Information
  • Right to Know What Personal Information is Sold or Shared and to Whom
  • Right to Opt Out of Sale or Sharing of Personal Information
  • Right to Limit Use and Disclosure of Sensitive Personal Information
  • Right of No Retaliation Following Opt Out or Exercise of Other Right

How to Comply with CPRA?

It is no surprise that this new law will change the ways websites collect information on their customers. However, the quicker companies can understand and comply with CPRA, the better their chances will be to tighten data protection, meet compliance, and gain the trust of their customers. This is where Securiti can help.

Securiti is a global leader in privacy compliance software that uses robotic automation, machine learning, artificial intelligence, AI-driven PI data discovery, cookie consent management, and documented accountability to ensure privacy compliance for your business. Not only does this achieve CPRA compliance for a business, but it also does so in the most hassle-free manner possible. To see Securiti’s tools in action request a demo today.

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