New California Privacy Bill Leads to Concern Across Industries

Since California passed the consumer privacy bill known as AB 375, numerous tech companies, trade associations and lobbyists have been pushing for changes before it goes into effect in January 2020. The strict law was passed quickly to fend off an initiative from Californians for Consumer Privacy, which wanted to put the issue on the ballot. Now, with a few days left in the legislative session, lawmakers in California may vote on a replacement bill, SB-1121, that could substantially change the intent of the original law.

Wired reports that, “over the last few weeks, groups like the Chamber of Commerce and the Internet Association, which represents companies like Google and Facebook, have pushed for significant alterations, even as the tech industry works to develop a federal privacy bill that would, if passed, override California’s law.”

The genesis of SB-1121 was originally to correct typos and open the door to changes down the road to AB 375. But in early August, “a coalition of nearly 40 organizations, ranging from the banking industry to the film industry to the tech industry’s leading lobbying groups, sent a 20-page letter to the lawmakers behind SB-1121, effectively a wish list of changes.”

These suggestions weren’t included in the SB-1121 draft but, “they’re a clear sign of the battle in store for 2019.” One significant proposed change was “a reframing” of who is considered a consumer. The bill now defines that as anyone who is a California resident, but “trade groups wanted the law only to apply to people whose data was collected because they made a purchase from a business, or used that business’s service … [and] they also proposed making it so that only businesses had the right to identify people as consumers, and not the other way around.”

Californians for Consumer Privacy former president Mary Stone Ross countered that, “this is significant because it [would] not apply to information that a business does not obtain directly from the consumer … like data sold by data brokers or other third parties.”

The original bill also requires companies to “share specific pieces of data,” but opponents seek to tweak that to only account for “categories of personal information.” Foes also want to tweak language in a section on offering incentives to consumers for the sale of their data that notes, “a business shall not use financial incentive practices that are unjust, unreasonable, coercive, or usurious in nature,” by striking out “unjust” and “unreasonable.”

Should opponents have their way, said Ross, “a business could offer incentives that are unjust or unreasonable … [turning] privacy into a commodity that will disproportionately burden the poor.”

The biggest “sticking point,” however, is data collected for advertising. The current law doesn’t allow users to entirely opt out of advertising, but “it does allow them to opt out of the sale of their personal information to a third party.” Challengers want an exception “for information that’s sold for the purposes of targeted advertising, where the users’ identities aren’t disclosed to that third party,” a provision fiercely opposed by the ACLU, Electronic Frontier Foundation and other privacy groups.