Demystifying the Difference Between Cookie Banners, Opt-Outs, and Do Not Sell My Information

Privacy laws are becoming increasingly complex, but the technology to manage them shouldn’t be confusing.

Many organizations struggle to stay compliant, especially when it comes to the difference between cookie banners, opt-outs, and “Do Not Sell” requests. Unfortunately, some businesses display cookie banners and call them opt-out tools or “Do Not Sell” mechanisms, causing confusion and, at times, non-compliance with privacy regulations such as the California Consumer Privacy Act (CCPA) and many others. This misalignment also extends to addressing signals like Global Privacy Controls (GPC), Universal Opt-Out Mechanisms (UOOMs), and California’s Opt-Out Preference Signals (OOPS).

Let’s break down the key differences between these privacy tools and clarify how they should be properly implemented.

Cookie Banners: Managing Consent for Data Tracking

Cookie banners are pop-ups that appear on websites to inform users that the site collects certain data through cookies. These banners typically ask for user consent to place cookies on their device. Cookies serve various purposes, such as tracking user behavior, improving website functionality, and enabling targeted advertising.

In jurisdictions governed by laws like the EU’s General Data Protection Regulation (GDPR), explicit consent is often required before cookies—especially those used for non-essential purposes like advertising—can be placed on a user’s device. Under GDPR, cookie banners must clearly outline the types of cookies being used and give users a real choice to accept or reject them. Merely showing a cookie banner is not enough; it must include the ability to manage cookie preferences.

Currently, no U.S. law mandates cookie banners with the ability to manage cookie preferences, but state privacy regulations like the CCPA and emerging laws in Colorado and Virginia require businesses to offer mechanisms for consumers to opt out of data sales and targeted advertising. While cookie banners aren’t legally required, they are often used to create the illusion of compliance. Additionally, businesses must honor GPC signals, which allow consumers to automatically opt out of data sales, making cookie management increasingly important for compliance and trust-building.

A common misconception – Some businesses display cookie banners and incorrectly label them as opt-out or “Do Not Sell” mechanisms, which leads to a misunderstanding about what each tool should do.

Opt-Outs: A Broader Mechanism for Data Control

An opt-out, in contrast, refers to the ability of a consumer to decline certain types of data collection or sharing, particularly for targeted advertising, data sales, or data profiling purposes. Opt-out tools are a key part of compliance with the CCPA, which gives consumers the right to opt out of the sale and sharing of their personal information.

The crucial distinction is that opt-outs focus on restricting the transfer or sale of data to third parties. For example, under the CCPA, when a consumer opts out, the business must stop selling their data to other entities. This goes beyond managing cookies—it applies to any instance where personal information is exchanged for value, whether financial or otherwise.

Another common misconception – A cookie banner asking for consent to tracking is not the same as an opt-out tool. Consumers must be able to easily opt out of data sales, and this process must be distinct from merely rejecting non-essential cookies.

Do Not Sell My Information: A Legal Requirement

The “Do Not Sell My Information” Link, mandated by the CCPA, grants consumers the right to opt-out of the sale of their personal data. Businesses are required to provide a clear, prominent, and functional way for users to exercise this right, typically through a link placed in the footer of their website. This ensures transparency and empowers consumers to control how their data is shared with third parties.

Here’s where the confusion often arises – Many organizations mistakenly believe that offering a cookie banner or toggle in a popup fulfills their obligation to honor “Do Not Sell” requests. However, these are two distinct compliance mechanisms. Cookie banners primarily handle consent for tracking and cookie usage, while “Do Not Sell” requests, as required under the CCPA, focus on broader data-sharing practices, specifically prohibiting the sale of personal data to third parties.

While a “Do Not Sell” request isn’t the same as a full Data Subject Rights (DSR) request—which may involve access, deletion, or correction of data—it does specifically restrict data sales and is a formal request that must be processed accordingly.

Addressing Signals: GPC, UOOMs, and California’s OOPS

To complicate matters, privacy laws are evolving to include browser-based privacy controls and opt-out mechanisms that allow consumers to automatically signal their privacy preferences without manually interacting with each website.

• Global Privacy Control (GPC): GPC is a signal that consumers can enable through their browser to opt out of the sale of their data automatically. Companies subject to CCPA must honor this signal when detected, yet many businesses fail to implement GPC support properly.
• Universal Opt-Out Mechanisms (UOOMs): UOOMs are tools provided by certain states and jurisdictions that allow consumers to express their preferences across multiple sites simultaneously. These tools often use browser extensions or built-in browser settings to automate the opt-out process.
• California’s Opt-Out Preference Signals (OOPS): Under the CPRA amendments to CCPA, businesses must honor opt-out preference signals, which act similarly to UOOMs by automatically communicating a consumer’s preference to opt out of the sale or sharing of their data. The OOPS functionality is designed to make it easier for consumers to exercise their rights without relying solely on manually opting out via each website’s “Do Not Sell” link.

Best Practices for Compliance

• Differentiate between cookie consent and opt-out rights: Businesses must ensure their cookie banners are not labeled as “Do Not Sell” tools unless integrated into a broader opt-out solution.
• Honor GPC and other automated signals: Ensure your systems can detect and honor signals like GPC and OOPS. Non-compliance can lead to penalties under privacy laws, particularly in California.
• Ensure clarity and functionality: Your cookie banner, opt-out mechanism, and “Do Not Sell” link should be easy to find, understandable, and functional across all platforms, including websites and mobile apps.
• Provide a seamless user experience: Allow users to manage their privacy settings easily, whether navigating through a cookie banner or opting out of data sales. Transparency and user control should be at the forefront of your privacy practices.

Conclusion

The rise of privacy legislation demands more than just implementing cookie banners. True compliance requires understanding the difference between cookie consent, opt-out rights, and “Do Not Sell” requirements. As consumers increasingly use tools like GPC and OOPS to manage their privacy preferences, businesses must adapt their practices to honor these signals properly. Failure to do so may not only result in penalties but also erode consumer trust.

Ensuring you implement the right privacy tools and mechanisms keeps you compliant. It fosters a stronger relationship with your customers, who are increasingly concerned about how their data is being used and shared. Clarip takes enterprise privacy governance to the next level and helps organizations reduce risks, engage better, and gain customers’ trust!

How Clarip handles Cookie Management and Opt Outs