Five Things You Need to Know About Data Privacy Laws
With the rapid evolution of technology, in becomes increasingly crucial for businesses to remain updated on handling consumer data while navigating the growing landscape of strict state privacy laws In this newsletter, we will delve into five pivotal aspects of the present legal environment concerning data privacy in the United States.
Brace Yourself: States are Passing an Onslaught of Privacy Laws
Currently, ten states have implemented privacy statutes, while more than twenty others are in the process of enacting similar laws. The sheer number of these statutes being passed raises concerns about how companies can effectively comply without becoming overwhelmed. It is important to note that although many states have comparable requirements, the pace at which these laws are being enacted is striking. For example, the California Privacy Rights Act (CPRA), which amends and extends the California Consumer Privacy Act (CCPA), is the first U.S. privacy law that creates a consumer right of private action. Staying up to date on new legislation will assist your business in proactively mitigating the escalating repercussions of non-compliance.
The Concept of Minimum Retention
In an effort to reduce the volume of collected consumer data, lawmakers have turned to the concept of minimum retention. According to the CPRA, businesses must restrict the collection, use, and retention of personal information to what is "reasonably necessary and proportionate" to achieve the specific purpose for which the personal information was gathered or processed. Essentially, this means that businesses should refrain from collecting or retaining more personal information than is genuinely required to fulfill the intended business purpose.
To adhere to the minimum retention guidelines, four key procedures need to be implemented: (1) establishing a retention policy, (2) regularly reviewing and updating retention periods, (3) practicing data minimization, and (4) ensuring secure disposal of personal information. While these requirements may initially appear burdensome, it is highly likely that other states will adopt the same standard. Therefore, taking proactive measures to address these challenges can benefit your business in the long run.
Fundamental Consumer Rights
Consumers are granted four fundamental rights by the ten state statutes that have been enacted. These rights include: (1) the right to access, (2) the right to deletion, (3) the right to portability, and (4) the right to opt-out of sale of personal data. The primary objective of these rights is to empower consumers, offering them greater control over their personal data while fostering competition, innovation, and enhanced standards of data protection.
The right of access allows consumers to inquire about the data collected by a company, ensuring they stay informed about the information held by that entity. The right to deletion enables consumers to request the removal and cessation of their data usage by entities in possession of their information. With the right to portability, consumers have the authority to receive a structured, widely used, and machine-readable copy of their personal information, which can then be transferred to a different service provider. Finally, the right to opt-out of the sale of personal data empowers consumers to instruct businesses to cease the selling of their personal information to third parties.
The Concept of Privacy by Design
At the core of privacy law lies the principle of “privacy by design,” which emphasizes a proactive approach to integrating privacy considerations into the development and operation of products, services, and business processes from the outset. By embedding privacy principles at every stage, businesses can enhance their ability to comply with the various state privacy laws and mitigate the risk of violations. This approach entails conducting privacy impact assessments, implementing data minimization practices, and employing anonymization or pseudonymization techniques to safeguard personal information. By prioritizing privacy as a top priority within their operations, businesses can readily adapt to the nuances of different state privacy laws and demonstrate their unwavering commitment to protecting consumer data.
Penalties for Violations & Non-Compliance
You may be curious about the consequences of violating privacy laws. The penalties and fines associated with privacy law violations vary between states. For instance, under the CPRA, businesses can face fines of up to $2,500 per violation, and up to $7,500 per intentional violation or violations involving minors. The Virginia Consumer Data Protection Act can impose civil penalties of up to $7,500 per violation, while the Colorado Privacy Act sets fines of up to $2,000 per violation, with a maximum cap of $500,000 per breach. In contrast, the Utah Consumer Privacy Act empowers the attorney general to levy fines up to $7,500 per violation, as well as actual damages related to the violation.
These varying penalties highlight the importance for businesses to remain knowledgeable about and compliant with the specific privacy laws of each state. Non-compliance can result not only in financial ramifactions, but also in reputational harm and the loss of consumer trust. To mitigate these risks, businesses should establish comprehensive privacy programs, consider extensive employee training, and collaborate with legal and compliance experts to ensure continuous adherence to the diverse requirements of state privacy laws.
In today’s data-driven world, it is essential for businesses to navigate the complexities of diverse state privacy laws. By staying informed about the evolving legal landscape, and taking proactive measures to tackle data privacy compliance challenges, businesses can effectively manage risks and thrive within these new regulatory environments. If your organization requires guidance on data privacy compliance or assistance in addressing specific privacy-related issues, feel free to reach out to Falcon Rappaport & Berkman at (212) 203-3255 or submit the contact form below. Our team is available to provide advice and support tailored to your needs.
DISCLAIMER: This summary is not legal advice and does not create any attorney-client relationship. This summary does not provide a definitive legal opinion for any factual situation. Before the firm can provide legal advice or opinion to any person or entity, the specific facts at issue must be reviewed by the firm. Before an attorney-client relationship is formed, the firm must have a signed engagement letter with a client setting forth the Firm’s scope and terms of representation. The information contained herein is based upon the law at the time of publication.