Tag Archives: CCPA

Email Marketers and California’s New Data Privacy Law

Data Privacy
In June of 2018, Governor Jerry Brown signed into law the California Consumer Privacy Act (CCPA). Taking its inspiration from the European Union’s General Data Protection Regulation (GDPR), the CCPA was intended to protect online data privacy. Like the GDPR, it gives California residents the right to opt out of any sharing of their data and the right to have their data deleted. It was created by Alastair Mactaggart, a rich San Francisco real estate investor, and drafted by him with friends, including cybersecurity and data privacy expert Mary Stone Ross.

But Mactaggart wasn’t happy with the legislation and, two years later, introduced ballot measure Proposition 24, intended to correct what he saw as problems with the CCPA. In November 2020 the California voters passed a revision to the CCPA entitled the California Privacy Rights Act of 2020 (CPRA).1 Not everyone was happy with the new resolution, including MacTaggart’s former associate Mary Stone Ross who opposed it as did the ACLU among others. Nonetheless, the proposition passed and is now law in California.

Why It Matters

While California is just one of the fifty US states, it has one of the largest populations and an over-sized influence on the rest of the country. Legislation passed by California is often copied by other states. So what has been the impact of the CCPA on the email marketing community, and what should we expect from the CPRA?

So far, the CCPA doesn’t appear to have had a significant impact on many in the email marketing community. Will the CPRA change that? Will it have a more significant impact on businesses? Only time will tell for the true effects, but there are a number of changes in the law that seem likely to cause an impact. We have read the law and attempted to interpret how the changes will affect the email marketing community. Please note that this is not legal advice. For specific questions about the law, please consult an attorney.

One of the changes was intended to close loopholes around businesses sharing information. The new law changes the wording to include the sharing of information between companies in almost every way. Whereas before, with the 2018 version of the law, many people interpreted it to allow businesses to share information between companies with affiliate relations, that is now explicitly disallowed.

The California Privacy Protection Agency

The most dramatic change from CCPA is the creation of the California Privacy Protection Agency. Previously, the prosecution of privacy violations was left to the California attorney general’s office, which acknowledged they don’t have the resources to bring many cases to court. With a projected budget of $5 to $10 million dollars a year and a law that says the proceeds from these cases will go to the new agency, the California Privacy Protection Agency actually benefits from prosecuting cases. With these kinds of resources, we expect that there will be significantly more prosecutions. Additionally, with CCPA, there were rules that allowed a company to “cure” violations to avoid punishment. With the new law, the ability to cure violations is reduced to a one-time opportunity.

It’s not all bad news, however. As with the CCPA, the CPRA has little effect on smaller businesses. It only applies to businesses that earn over $25 million a year. If anything, it’s more lenient than the CCPA since it increases the number of subscribers a business can have from 50,000 to 100,000.

The exceptions are businesses that earn 50% or more of their annual revenue from selling or sharing consumers’ personal information. The changes in this law make it clear that sharing data with another business, regardless of the creative words used to describe the arrangement or the annual earnings, are now illegal without strict contractual requirements to ensure that business maintains the same level of privacy protection. If you make money by selling your email leads, you will need to be very careful about this law. And the penalties for violations remain debilitatingly high. Fines could be millions of dollars for a single email blast!

The law continues or even strengthens the requirements of disclosure for the personal information you collect. This law goes so far as to give the exact words you need to provide as a link on the homepage of your website to explain to users the information you collect and requires you to make an option available to users to request that this data be deleted.

In GDPR and Email: Part 1, an Overview, we pointed out that much of this legislation requires businesses to forget all the information about a recipient, without addressing the inevitable problems this can cause. Our reading of this is that the law does allow for the storage of some key identifier to support a user’s request to be deleted (specifically, email address in our case). While we doubt that this was the intended purpose of this subsection, it certainly appears to let businesses off the hook in regards to keeping email addresses to prevent further data gathering and further email sending.

Don’t Add Data to Unsubscribes

The new law makes it explicitly clear that personal information cannot be added to records for recipients that have unsubscribed. Maintaining the email address to know the person has unsubscribed appears legal, but you cannot then augment the file of information about that user to include any personal information, even if you won’t be sending to them. Some software or business practice changes may be necessary for companies to comply with this.

One thing that is unequivocally banned by the CPRA is the practice of assuming that consent is provided by hovering over, muting, pausing, or closing a given piece of content. It also prohibits the practice of using “dark patterns” to add data about users, which it defines as “a user interface designed or manipulated with the substantial effect of subverting or impairing user autonomy, decision-making, or choice, as further defined by regulation.” Hopefully few businesses were doing this, but should you be considering it, now it is explicitly illegal.

Another frustration we have experienced with GDPR that doesn’t appear resolved by these California laws is the question of what constitutes personal information. Some things are obvious, such as Social Security Numbers, addresses, dates of birth, etc. But how about information like clickthroughs or opens? Is it personal information to keep track of what content the person opened, or to store the links that they clicked on? Certainly, an argument could be made that this information is unworthy to be considered confidential or private information, but the laws are not clear. It would be nice if this could be resolved for the email marketing community but for now, each company and their lawyers will need to make their own decision.

The CCPA went into effect at the beginning of 2020 and will stay in effect until the 1st of January, 2023. At that point, the CPRA will go into action, but the law also applies to personal information collected by a business on or after January 1st, 2022. If you are an email marketer who doesn’t collect any personal information about your recipients and simply blasts untargeted advertisements at them you may not need to change business practices. You need to offer an explicit “delete” option, rather than just an unsubscribe, but no other changes may be required. However, if you target recipients based on the information you have collected about them no matter what the source, you may have to make changes to “dumb down” your program. Untargeted advertisements appear to be acceptable but targeted advertisements may get you in trouble. It’s a bit ironic that the “benefit” of privacy protection may neuter all marketing to be generic and unengaging to recipients.

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1. The California Privacy Rights Act of 2020 in PDF form.

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Privacy Report 2020

data privacy
The second decade of the 21st century is shaping up to become known as The Privacy Decade. Recent legislation, both internationally and in the United States, is primed to change the parameters regarding what information about a person you can or can’t collect, and the limitations on what you can do with that information. One thing these regulations have in common is that they don’t restrict their data privacy requirements to emails sent from within their borders. If your emails are sent to subscriber inboxes within any of these states, you are deemed culpable for those violations and can be subject to hefty fines. Unlike previous legislation, such as CAN-SPAM and CASL, these new laws are not aimed specifically at email but are intended to address privacy issues across all devices, platforms, and services. They all do affect email because email involves the gathering of private data in the form of email addresses and, in some cases, names and locations. Each of these laws comes with its own set of restrictions, some more draconian than others.

More Restrictions

While some people might not care if everyone knows where they are every hour of the day, most of us value our privacy and like to have some say over what a company may or may not know about us. Accepting this and working with it is the best tactic for any email marketer. Try to game a subscriber’s private data was never a good idea, but all signs point to more restrictions and greater penalties for doing so as every country gets into the act. While there are no plans for upcoming legislation in this Congress, states such as California and Vermont have created their own stringent privacy laws and 2018 saw the passage of data breach notification laws in several states.

GDPR Arrives

The legislation that started the privacy protection ball rolling was the European Union’s General Data Protection Regulation (GDPR). This regulation set a high bar for an individual’s rights to access any data about them that a company gathers, as well as the right to have that data deleted (for more on GDPR, see our three-part series on the subject). It covers a staggeringly wide range of data—everything from a person’s email address to the geolocation featured in many digital cameras. It extends to any person living within the European Union, regardless of their nationality. If you send email to a person in the EU, you need to be GDPR compliant. Full stop.

California Picks Up the Torch

Taking its cues from the GDPR, the state of California came up with its own privacy regulation. Passed in 2018, the requirements of the California Consumer Privacy Act (CCPA) goes into effect January 1, 2020, and features many of the same restrictions as the GDPR, including the right to obtain one’s data from a company and the right to be forgotten. No other state has, as yet, passed such a strict law, but it looks like Washington State is set to follow suit with their Washington Privacy Act, which is also modeled after the GDPR.

As strict as the CCPA seems, it’s got nothing on the GDPR. The California law applies only to for-profit businesses, so nonprofits can breathe easy. Additionally, for-profit businesses need to have a gross annual revenue exceeding $25 million for the law to take effect, and your active email list must exceed 50,000 subscribers. It also only applies to tax-paying residents of California.

Brazil Follows Suit

In August of 2018, the Brazilian government signed into law the Brazilian General Data Protection Act (Lei Geral de Proteção de Dados Pessoais or “LGPD”). Like the GDPR, after which it was modeled, its scope is global, with companies in any country facing fines for violating its rules. As with the CCPA, the Brazilian law goes into effect in 2020. One notable difference between the GDPR and the LGPD is the latter’s inclusion of terminology pertaining to “non-discrimination”). It also addresses credit and health records with more specificity. Originally, the law had provisions for the establishment of an independent data protection authority, but the President rescinded that in a line item veto. The LGPD is more punitive than California’s law but less so than the GDPR. The maximum fine under the LGPD is 2% of a company’s Brazilian revenue up to 50 million in Brazilian Reals per infraction (about 13.4 million in U.S. dollars). Compare that to the GDPR’s 4% of an organization’s annual revenue or 20 million Euros (about 22.6 in U.S. dollars), whichever is greater.

And Then There’s India

Also getting in on the post-GDPR drive for stronger privacy controls, the Ministry of Electronics and IT (MEITY) in India has been hammering out its own privacy regulations—a process they started back in 2010. Following the 2017 Indian Supreme Court ruling declaring that privacy is a “fundamental right,” the MEITY finally got on the ball and drafted the Personal Data Protection Bill 2018 (PDP Bill), which contains many of the same features as GDPR, but with a few curveballs that already have companies crying foul. The main one is the requirement that all “personal data” on people residing in India must be maintained at a facility within India (although the bill doesn’t define what constitutes personal data—they’re leaving that up to the government). India isn’t the only country mandating such a restriction. China and Vietnam have similar restrictions, but neither of those countries could be considered free. Their governments exert a great deal of control over every aspect of data transfer and Internet use.

India, on the other hand, has a free market economy—some might say too free. It also has an online market second only to China in size, with close to 500 million Internet users. Restrictions making it harder for companies to conduct business aren’t welcome, and this requirement is already meeting with criticism and opposition. When the MEITY requested feedback on the bill, they received nearly 600 recommended changes, from both businesses and governments, including the United States.

Perhaps this is why, since its introduction, the government has had a few opportunities to pass the PDP Bill, but decided to wait until June 2019, after the new government is in place.

Congress Changes Its Tune

In 2009, U.S. Senator Patrick Leahy of Vermont tried to get his Personal Data Privacy and Security Act passed, but the bill never reached the floor. It was too much, too soon, and nobody had any idea yet the extent to which sites such as Facebook and Google would use personal data. Still, data privacy restrictions would be a hard sell in Congress, even today, if not for the increasing number of states tackling the problems on their own. All fifty states have laws concerning the reporting of data breaches, and 35 states have laws regarding the disposal of data. To complicate matters, the laws in each state are different. Some state laws apply only to business, while others only restrict the government, leaving private businesses to do what they want with your data. Some are quite stringent, while others are written in such general terms as to be virtually unenforceable.

Mostly in response to California’s legislation, the U.S. Chamber of Commerce and several other business-based groups are lobbying Congress to pass a federal omnibus privacy and data protection law that would pre-empt the CCPA and other existing and future state data protection laws.

Email’s Role in All of This

Unlike CAN-SPAM and CASL, this recent legislation doesn’t focus exclusively on email. In the case of GDPR, it regulates everything from website visits to in-camera geolocation. They all affect email marketing, although how much depends on your subscriber list. If your list is exclusive to the United States, and your gross revenues don’t exceed $25 million, then you can go about business as usual. None of the recent legislation will have that much impact on your email efforts. There is a lot more legislation on the books now concerning data breach notification, but that’s of more concern for the IT department than the marketing department.

If you have international subscribers or own a business that brings in over 25 million a year, we recommend you follow the rules of the GDPR. It is still the strictest of the current laws, so if you are in line with it, you should be fine for the others. For everyone else, there are a few things you can do to avoid problems. They include the following:

Make Your Terms Clear

Spell out in the clearest possible language exactly what you plan to do with the data you collect and make sure you include a statement to the effect that you will not use this data for other purposes or sell it to other companies.

Leave Boxes Unchecked

If you do any business in the European Union, this isn’t simply a suggestion, it’s the law. It’s less important in the States, but, like the single- vs. double-opt-in controversy, each approach has its supporters and detractors.

Respect the Privacy of Your Subscribers.

Email marketing is a double-edged sword. On one hand, we all like our privacy, but on the other, we also prefer receiving emails about things we are actually interested in. As an email marketer, the only datum you actually need is the email address, but, by itself, that makes for generic, “batch-and-blast” emails. Personal data helps improve the engagement and the receptiveness of your subscribers to your mailings. But don’t abuse it. Just because you can send an email saying “Hey Jill! I noticed you just visited our website fifteen minutes ago” doesn’t mean you should. It makes you look like a stalker, so avoid it.

The Ground’s Still Shaking

One thing is certain: This story is far from over. Right now, most of the fretting over the new laws has been a waste of time. How much they affect you is extremely variable. New legislation is cropping up in countries around the world every day and, as time goes on, it appears more and more likely that some national legislation in the United States will be enacted to bring the various states back into line. When that happens, we’ll take a look at this subject again.

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