A month after GDPR took effect, the state passed the country’s strongest data protection rules this week in an effort to stop an even stricter ballot measure from being put in front of voters. Trade groups were nonetheless critical of the move, saying a federal law is preferable.
The wave of regulatory interest in data privacy that brought us Europe’s General Data Protection Regulation is coming to the U.S. in a big way, thanks to a newly passed law in California.
This week, California Gov. Jerry Brown signed the California Consumer Privacy Act of 2018, a law that would require disclosure of data collection practices and implement fines for those who fail to do so.
The law’s swift passage—it passed unanimously in both of the state’s legislative chambers on the same day it was signed—was fast-tracked in an attempt to get ahead of an even stricter ballot proposal that would have been costlier for businesses.
The passage of the law also prevented what promised to be a costly advocacy battle. Supporters of the ballot measure agreed to withdraw the measure if a law was passed by the deadline date, which was Thursday. Preparing for a fight, companies such as Facebook, AT&T, and Verizon had each invested $200,000 in a committee that would have advocated against the ballot measure.
The resulting law, which takes effect in 2020, only requires disclosure of the category of data used and allows consumers to sue at costs of $750 per violation, with the state being able to sue for up to $7,500 per violation.
Groups Speak Out
Despite the law ultimately being a compromise (one weaker than GDPR, by the way), trade groups were still critical of both the final result and the limited discussion that led to its passage. For one, Internet Association Vice President of State Government Affairs Robert Callahan defended the industry’s data practices and called the regulations specific to a single state “concerning.”
“The circumstances of this bill are specific to California,” Callahan said in a statement. “It is critical going forward that policymakers work to correct the inevitable, negative policy and compliance ramifications this last-minute deal will create for California’s consumers and businesses alike.”
According to Reuters, the California Chamber of Commerce, CTIA, and the Association of National Advertisers were among those that opposed the legislation, with CTIA calling for Congress to pass a federal law that supersedes the just-passed California law.
On the other hand, consumer groups spoke up in support of the final result. Consumer Watchdog, a progressive advocacy organization, called the law “a landmark reform” and argued that the rest of the country should follow suit. But even if they don’t, the group argued, it will have a significant ripple effect due to its location.
“Silicon Valley companies will very likely implement many of these reforms across their entire customer base, not just for Californians,” the advocacy group stated.