November 29, 2023
The California Privacy Protection Agency (CPPA) is preparing new regulations to protect consumers from how businesses may potentially use AI. The state regulator, whose rulings have an outsized influence on Big Tech given the many large firms that are headquartered there, has issued draft rules for how consumer data can be used in what it is calling “automated decisionmaking technology,” or ADMT. The proposed regulations give consumers the right to opt out of ADMT and entitles the public to on-demand information as how AI is interacting with their data and how businesses plan to use it.
The CPPA has scheduled a December 8 board meeting to discuss findings and feedback about the proposed regulation, with formal rulemaking sessions to follow in 2024.
“Once again, California is taking the lead to support privacy-protective innovation in the use of emerging technologies, including those that leverage artificial intelligence,” CPPA board member Vinhcent Le said in the agency’s news announcement.
Le, who also sits on the new rules subcommittee that drafted the proposed regulations, added that the regulatory proposal was drafted with the aim of “responsible use of automated decisionmaking” that includes “appropriate guardrails with respect to privacy, including employees’ and children’s privacy.”
Based on the draft, “AI-based profiling could even fall in scope of the planned rules,” TechCrunch reports, adding that “there could be big implications for U.S. ad tech giants like Meta, which has a business model that hinges on tracking and profiling users to target them with ads.”
In that regard, the CPPA proposal could be as or more onerous to ad tech firms than Apple’s App Tracking Transparency framework, which was introduced in 2021 and subsequently cost social media firms an estimated tens of billions of dollars per year.
Firms that use AI to target ads “could be required to offer California residents the ability to deny their commercial surveillance, with the proposed law stating businesses must provide consumers with the ability to opt-out of their data being processed for behavioral advertising,” TechCrunch writes.
“Taking its approach and inspiration from existing rules in the European Union, the draft represents ‘by far the most comprehensive and detailed set of rules in the AI space,’” ReadWrite quotes CPPA Executive Director Ashkan Soltani saying in reference to the EU’s General Data Protection Regulation, enacted in 2018.