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Utah Business

California Consumer Privacy Act

Do We Really Need The California Consumer Privacy Act?

The bright sun burns through the clouds and sends its warming rays to the blacktop below. Its warmth masks the chill and creates the allusion that, at long last, spring has finally arrived. Kids congregate at the playground and commence a schoolyard pick. There are some newcomers, so certain ice must be broken.

The interrogator, the de facto captain, a wizened eleven-year-old, wears shorts, a t-shirt, and skates (or blades, as we used to call them). The only protection between his skull and the pavement, should it be necessary, is his mop of hair. His hockey stick, whose face is worn to a mere fraction of its original size, tells stories of innumerable battles, mostly won.

The interrogee, sent into the fray by well-intending parents, appears more appropriately dressed for the apocalypse than for a neighborhood scrum. A helmet rests on his crown (the others would do well to follow his lead in this regard), followed by a padded chin strap, and mouth guard. Only his eyes and nose are visible.

Next are shoulder pads, elbow pads, and wrist guards. His pants―made from denim of the world’s strongest variety―protect his legs, as do the knee pads and shin guards that he’s added for good measure. He could fall from a ten-story building and emerge unscathed. But, as is evident, he has not; the pads do not bear a single scar.

The interaction starts like this:

  1. “What’s your name?”
  2. The answer is inaudible under the mouth guard.
  3. “How old are you?”
  4. Again, a muffled response.
  5. “Do you know how to play?”
  6. A subtle, doubt-filled nod.

They pick teams, the nameless kid in the knee pads is last, and the game begins. He can play, or better stated, he can roll around, but his freedom of communication and movement is greatly restricted. After the game ends, he rolls home alone, free from the threat of a future invitation―an unintended consequence of over-protective parents.

The transaction―a concise line of questions and a game―is harmless. But what if the same transaction were to occur outside the borders of the blacktop? Say, in the digital universe? Suddenly, questions regarding name, age, interest, and an invitation to play, seem sinister. And from the wrong lips, perhaps they could be. But, does the solution truly lie in a mouth guard, helmet, and myriad pads? The state of California certainly believes it does.

Recently, after only six days of drafting and review (insert subtext, “the law is flawed”), California passed the California Consumer Privacy Act. It takes effect on January 1, 2020, and threatens businesses with substantial penalties for non-compliance. The law applies to businesses in Utah if they receive personal information from California residents, and if one of the following factors is met: 1) annual revenue is in excess of $25 Million, 2) the company receives personal information of at least 50,000 California residents in a one-year period, or, 3) 50 percent of annual revenue is from the sale of California residents’ information.

Simply, the law provides safeguards for California residents’ personal information, grants rights to control how that information is collected and used―or whether that information is collected or used at all―and prohibits discrimination against those who desire anonymity.

But what is personal information? The quick answer: everything. In fact, the definition is comically expansive. It includes all standard fare, such as your name, address, and SSN, but also includes, as examples, visual and thermal information, psychological trends, predispositions, intelligence, aptitudes, and on and on. The law identifies over 30 types of protected information, some of which you probably do not even know about yourself (could you identify your own olfactory signature? We certainly don’t want our dogs sharing our personal data, imagine the horror.).

One thing is certain, the law will protect the privacy interests of California residents. But, the circumstance it creates is much like a game wherein the “protective” restrictions prohibit true participation. However well intended California lawmakers may be, time can only tell if protecting a name (and more) is worth the unintended cost to both consumers and businesses.

To that point, when a California resident shows up at the playground, heavily laden with protective gear, the law requires you to allow him to play. And while that is achievable, it could create a financial burden for some businesses. But, however large this burden, it is likely to be eclipsed by the cost of non-compliance. Simply, let the kid play, just don’t think to ask him his name or attempt to see under the pads.

Jordan Cameron is a shareholder with the law firm Durham, Jones & Pinegar. His practice focuses on litigation and corporate compliance with an emphasis on internet/ecommerce, privacy, consumer transactions, and marketing.

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