When California voters approved Proposition 24, the California Privacy Rights Act (CPRA), on November 3, 2020, the result was to substantially amend the California Consumer Privacy Act (CCPA) which became effective only 10 months earlier. We outlined the basic rules for determining when the CCPA applies, and summarize here the changes made by the CPRA.

Some of the requirements for the CCPA to apply remain the same, namely that a “business” (i) do business in the State of California, (ii) collect personal information (or on behalf of which such information is collected), and (iii) alone or jointly with others determines the purposes or means of processing of that data. However, a “business” under the CCPA also must satisfy at least one of three additional requirements which were modified by the CPRA as follows:

CCPA

CCPA as amended by CPRA

The business has annual gross revenue in excess of $25 million.

 

The annual revenue requirement is satisfied if, as of January 1 of a calendar year, the business had annual gross revenues in the preceding calendar year in excess of $25 million.

The business “alone or in combination, annually buys, receives for the business’s commercial purposes, sells, or shares for commercial purposes, alone or in combination, the personal information of 50,000 or more consumers, households, or devices

 

The business “alone or in combination, annually buys, sells, or shares the personal information of 100,000 or more consumers or households

 

The business derives 50 percent or more of its annual revenues from selling consumers’ personal information.

 

The business derives 50 percent or more of its annual revenues from selling or sharing consumers’ personal information.

 

In addition to businesses that meet the requirements referenced above, the CCPA also applies to any entity that controls or is controlled by such a business and shares common branding with that business. However, the CPRA clarified when these rules apply. First, it is not enough to share common branding, the business also must share personal information with the entity controlling or under the control of the business. Second, under the CPRA, sharing “common branding” does not mean simply a shared name, servicemark, or trademark, but when doing so would cause the average consumer to understand that the entities are commonly owned.

The CPRA also adds a third category that would be a “business” for purposes of these rules:

A joint venture or partnership composed of businesses in which each business has at least a 40 percent interest.

In this case, the joint venture or partnership itself, and each business that composes the joint venture or partnership will be considered a single business. Notably, personal information in the possession of each business and disclosed to the joint venture or partnership may not be shared with the other business.

Persons to whom a business makes personal information available or who process or receive personal information from or on behalf of a business. The CPRA made substantial changes to the rules that apply to persons that work with covered businesses to receive and process personal information. For instance, the CPRA added a new category, “contractor,” which is a person to whom the business makes available a consumer’s personal information for a business purpose. A discussion of these rules is beyond the scope of this post, but businesses will need to better understand the relationships they have with unrelated “persons” that receive and/or process personal information from or on behalf of the business. This includes making sure such activity is pursuant to a written contract that satisfies certain requirements.

 

Businesses (and their service providers and contractors) should be reviewing the changes made by the CPRA to determine whether the CCPA, as modified, applies to them. Each of these entities could face administrative fines of not more than $2,500 for each violation, and not more than $7,500 for each intentional violation or violations involving the personal information of consumers whom the business, service provider, contractor, or other person has actual knowledge are under 16 years of age.

 

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Photo of Joseph J. Lazzarotti Joseph J. Lazzarotti

Joseph J. Lazzarotti is a Principal in the Morristown, New Jersey, office of Jackson Lewis P.C. He founded and currently leads the firm’s Privacy, e-Communication and Data Security Practice, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with…

Joseph J. Lazzarotti is a Principal in the Morristown, New Jersey, office of Jackson Lewis P.C. He founded and currently leads the firm’s Privacy, e-Communication and Data Security Practice, edits the firm’s Privacy Blog, and is a Certified Information Privacy Professional (CIPP) with the International Association of Privacy Professionals. Trained as an employee benefits lawyer, focused on compliance, Mr. Lazzarotti also is a member of the firm’s Employee Benefits Practice Group.

In short, his practice focuses on the matrix of laws governing the privacy, security, and management of data, as well as the impact and regulation of social media. He also counsels companies on compliance, fiduciary, taxation, and administrative matters with respect to employee benefit plans.

Privacy and cybersecurity experience – Mr. Lazzarotti counsels multinational, national and regional companies in all industries on the broad array of laws, regulations, best practices, and preventive safeguards. The following are examples of areas of focus in his practice:

  • Advising health care providers, business associates, and group health plan sponsors concerning HIPAA/HITECH compliance, including risk assessments, policies and procedures, incident response plan development, vendor assessment and management programs, and training.
  • Coached hundreds of companies through the investigation, remediation, notification, and overall response to data breaches of all kinds – PHI, PII, payment card, etc.
  • Helping organizations address questions about the application, implementation, and overall compliance with European Union’s General Data Protection Regulation (GDPR) and, in particular, its implications in the U.S., together with preparing for the California Consumer Privacy Act.
  • Working with organizations to develop and implement video, audio, and data-driven monitoring and surveillance programs. For instance, in the transportation and related industries, Joe has worked with numerous clients on fleet management programs involving the use of telematics, dash-cams, event data recorders (EDR), and related technologies. He also has advised many clients in the use of biometrics including with regard to consent, data security, and retention issues under BIPA and other laws.
  • Assisting clients with growing state data security mandates to safeguard personal information, including steering clients through detailed risk assessments and converting those assessments into practical “best practice” risk management solutions, including written information security programs (WISPs). Related work includes compliance advice concerning FTC Act, Regulation S-P, GLBA, and New York Reg. 500.
  • Advising clients about best practices for electronic communications, including in social media, as well as when communicating under a “bring your own device” (BYOD) or “company owned personally enabled device” (COPE) environment.
  • Conducting various levels of privacy and data security training for executives and employees
  • Supports organizations through mergers, acquisitions, and reorganizations with regard to the handling of employee and customer data, and the safeguarding of that data during the transaction.
  • Representing organizations in matters involving inquiries into privacy and data security compliance before federal and state agencies including the HHS Office of Civil Rights, Federal Trade Commission, and various state Attorneys General.

Benefits counseling experience – Mr. Lazzarotti’s work in the benefits counseling area covers many areas of employee benefits law. Below are some examples of that work:

  • As part of the Firm’s Health Care Reform Team, he advises employers and plan sponsors regarding the establishment, administration and operation of fully insured and self-funded health and welfare plans to comply with ERISA, IRC, ACA/PPACA, HIPAA, COBRA, ADA, GINA, and other related laws.
  • Guiding clients through the selection of plan service providers, along with negotiating service agreements with vendors to address plan compliance and operations, while leveraging data security experience to ensure plan data is safeguarded.
  • Counsels plan sponsors on day-to-day compliance and administrative issues affecting plans.
  • Assists in the design and drafting of benefit plan documents, including severance and fringe benefit plans.
  • Advises plan sponsors concerning employee benefit plan operation, administration and correcting errors in operation.

Mr. Lazzarotti speaks and writes regularly on current employee benefits and data privacy and cybersecurity topics and his work has been published in leading business and legal journals and media outlets, such as The Washington Post, Inside Counsel, Bloomberg, The National Law Journal, Financial Times, Business Insurance, HR Magazine and NPR, as well as the ABA Journal, The American Lawyer, Law360, Bender’s Labor and Employment Bulletin, the Australian Privacy Law Bulletin and the Privacy, and Data Security Law Journal.

Mr. Lazzarotti served as a judicial law clerk for the Honorable Laura Denvir Stith on the Missouri Court of Appeals.