CCPA Financial Incentives for Personal Information
The California Consumer Privacy Act (AB-375 or CCPA) prohibits discrimination against consumers for exercising their privacy rights yet added a compromise exception for certain financial incentives that was not originally contained in the proposed November ballot initiative.
Section 1798.125(b) of the CCPA will permit businesses to offer financial incentives or a different price to consumers despite the overall prohibition on discrimination for the exercise of the individual’s right to access, delete, opt-out or other rights.
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In general, Section 1798.125(a)(1) prohibits a business from discriminating against a consumer for exercising any of their rights under the CCPA. As a result, businesses are not allowed to deny goods or services to a consumer, charge different prices, or provide a different level or quality of service. This language was originally from the proposed November ballot initiative offered by the organization Californians for Consumer Privacy.
The exception to the law added in the California legislature and signed into law would provide for financial incentives to consumers to entice them to allow the collection, sale or deletion of personal information. The exception allows businesses to offer a different price, level or quality of goods and services if the price or difference is directly related to the value provided by the consumer’s data. Section 1798.125(a)(2) makes clear that the intent of Section 1798.125 is not to prohibit differences reasonably related to the value of the data (assuming that the use of consumer in the sentence is a grammatical error as is suggested by its revision to read business in AB-1355).
This limits the scope of the overall provision against discrimination for the exercise of the consumer’s rights contained in Section 1798.125(a), which prohibits denying goods or services, charging or suggesting different prices or rates, or providing a different level or quality.
The interaction between these two subsections will no doubt be the subject of much legislative, judicial, and compliance professional debates in the coming months or years. There is a strong possibility that this language is ultimately cleaned up either by regulations from the CA Attorney General or by subsequent amendment from the legislature before it goes into effect on January 1, 2020.
Potential CCPA Amendments
This section has been the subject of much discussion over the past few months as organizations have expressed concern that loyalty and rewards programs will violate the law. There is at least one amendment being considered in the California legislature to revise this section and exclude its application to appropriate discount programs. There is also a proposed amendment to strengthen it by removing the carve-out and exception contained in Sections 1798.125(a)(2) and 1798.125(b) completely.
Learn more about California’s new law:
Overview of the California Consumer Privacy Act
Right to Opt Out
Right to Access
Right to Delete
Opt In Consent for Kids
Effective Date for Compliance
Application to non-CA Businesses
Do Not Sell My Personal Information Link
Financial Incentives for Information Sharing
Deidentified and Aggregate Consumer Information
Government Fines and Consumer Damages
Text of AB-375
Blog Posts on the Privacy Law:
Will California’s Privacy Law Extend to the Rest of the Country?
Big Day for California Privacy Law
California to Pass New Privacy Law
California Consumer Privacy Act Expected on November Ballot