California’s new privacy laws may trigger a wave

Discussion
Photo: @Terralyx via Twenty20
Jan 02, 2020
Tom Ryan

On Jan. 1, California became the first state to pass a comprehensive law giving consumers more control of their digital data.

The law: 

  • Requires businesses to give consumers all the information they collect about them and what they do with it, free of charge.
  • Requires businesses to delete collected information on an individual, if asked. Requests can be denied in some cases, such as if the data is necessary to complete a transaction.
  • Requires businesses selling personal information to create a “Do Not Sell My Personal Information” button on their homepage to provide a simple way to opt out.
  • Prevents businesses from retaliating against those opting out by increasing prices or reducing service offerings. “Financial incentives” can be offered to those allowing data collection.
  • Allows individuals to sue companies that allow their personal information to be accessed or stolen through a data breach.
  • Forbids businesses from selling the personal information of children under age 16 unless the parent (of children under age 13) or the child (age 13 to 16) opt in.

Purchase histories, location tracking and demographic data, including religion, ethnicity and sexual orientation, are important needs for marketers doing targeted ads.

Updating privacy policies, upgrading cyber insurance policies and setting up systems to handle data requests are expected to be a burden for smaller businesses. One particular challenge is that the law broadly defines data sales to cover almost any information sharing that benefits companies.

Some companies, including Microsoft and Mozilla, are extending the guidelines to all U.S. customers, although some experts warn extending protections to other states may create unnecessary liabilities. Other states are working on similar laws and tech giants are calling for a federal law.

A big unknown is whether consumers will take the initiative to request, opt out or file for damages if their data is compromised. Europe’s tougher GDPR privacy law, which became effective in May 2018, has seen relatively few consumers take action. Chris May, who focuses on corporate risk for Deloitte, told Fortune, “Is this a big deal for thousands or hundreds of thousands or millions of people? We don’t know yet.”

DISCUSSION QUESTIONS: Are California’s privacy laws good or bad for retailers? How will they affect marketers’ ability to offer personalization? Do you expect many consumers to take advantage of such laws, and will the trend spread across the U.S.?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I expect consumers will follow a similar course with their data as they have with their email privileges: use my data to add value or lose the ability to sell my data."
"...this bill is a natural market correction that will ensure necessary transparency — giving the power back to the consumer and ensuring a healthy return to retail loyalties."
"The retailers who will suffer from CCPA are those that don’t understand, value or prioritize customers."

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18 Comments on "California’s new privacy laws may trigger a wave"


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Dave Bruno
BrainTrust

While I am not yet ready to make a prediction on how the market will react, I can say that I live in California, and in the past two days every time I have been offered a chance to opt out of data sharing/selling, I have chosen to opt out. This was neither planned nor expected. Opting out of data sharing is reminiscent of that satisfaction you get when unsubscribing from emails that add no value to your inbox – or your life. I expect consumers will follow a similar course with their data as they have with their email privileges: use my data to add value and be relevant to me or lose the ability to sell my data.

Susan O'Neal
BrainTrust
5 months 3 days ago

California’s new privacy legislation is an important step toward seeing consumers as partners in the marketplaces for their attention and data. Entities who have never seen the consumer as a person, but rather an asset (or a “target”) to be sold and resold, will have costly adjustments to make over the next several years. Retailers, on the other hand, have had a different perspective – at least as the beginning. For most of their history retailers have had a closer and more personal relationship with their customers. It held many back from monetizing their customer data during the heyday of Big Data, but in the next decade that sense of service and partnership will be an advantage.

Phil Rubin
BrainTrust
5 months 3 days ago

CCPA, the California Consumer Privacy Act, is good for consumers and for retailers who are properly focused on them. For other retailers this is going to be a challenge.

The fundamental premise of CCPA is to make a more explicit promise to consumers that the data they provide the retailer is in their best interest, and results in a better experience. It’s also worth noting that this is, or at least should be, the reason for consumers opting in (or opting up) to a loyalty program – that it creates a mutually beneficial relationship for BOTH parties.

The retailers who will suffer from CCPA are those that don’t understand, value or prioritize customers. As crazy as that might sound, all you need to do is take a look at your inbox, much less consider your retail experience regardless of channel, and you’ll see for yourself.

Shep Hyken
BrainTrust

This will force retailers to up their game when it comes to marketing and personalization. The retailer will have to earn their customer’s confidence and trust. Once they do, and the customer is willing to share their information, they will have an advantage over others. This can lead to repeat business and even loyalty.

Georganne Bender
BrainTrust

For all the talk, has any retailer really got true personalization down yet? Yes, this new law is disappointing to marketers, but it will be a relief to consumers who are not happy with how much businesses know about them. Given the choice I will opt out every time.

Jeffrey McNulty
BrainTrust

I completely agree with you, Georganne. I am looking forward to having more control over my data.

Mark Ryski
BrainTrust

There’s no question California’s new laws will create extra work and cost for retailers, and anything that causes more work/cost will be viewed as negative. I do believe there is a sample of the population that take their privacy seriously and will appreciate the legislation and hold retailers accountable for how they’re using personal data, however, for the vast majority of shoppers, this legislation likely won’t have much effect. Regardless of which side of the argument you’re on, I believe that some of the controls included in the new legislation are long overdue. The real tricky part is in how the legislation will be applied/enforced – or not.

Michael La Kier
BrainTrust

There is no “may” about it. Californa’s new law has already had a major impact on marketers…and consumers, but they don’t know it yet. CCPA will have a major impact on retailers; those with an already strong, value-enhancing relationship will benefit while those who have offered little to consumers will lose. Reliance on third-party data will likely wane over the next few years as CCPA and similar laws thin the herd of sellers.

Mohamed Amer
BrainTrust

California is at the epicenter of this data quake that over time will most certainly be felt in other states. It’s not so much a question of being good or bad for retailers as it is about creating a more mature and responsible approach to accessing and using customer data. The law continues a shift that puts consumers, by default, in charge of their own data. In today’s parlance and over the long run, this will prove beneficial for both retailers and consumers.

Ken Morris
BrainTrust

This is a very big deal for retailers. I believe privacy is going to become a major consumer concern over the next few years. Almost every consumer trend starts in California and spreads across the rest of the country so retailers need to be prepared.

Privacy laws will require many changes to the supporting IT infrastructure and those retailers who have not already begun a GDPR (General Data Protection Regulation) project will need to scramble to support the new laws.

With this concern comes opportunity and those retailers who can offer their best customers something in return for their data can create a more intimate relationship with their base.

Gene Detroyer
BrainTrust

Who would not opt out given the choice? I predict there will be a deluge of states offering the California privacy law in the next year. In the past internet users have been oblivious to privacy issues, or they made that deal with the devil. That is no longer the case.

As technology, AI, facial recognition, et. al., become more ubiquitous people and hopefully governments will become more sensitive to the issue.

The caveat is that we won’t recognize tech in 10 years (or maybe five years) and we may be dealing with intrusions that we never imagined…or not.

Lee Peterson
BrainTrust

I’ve been reading quite a bit lately about consumers being able to charge for the use of their data – or not. A “new economy”, if you will. An interesting idea that would spread the wealth vs. funneling it all to a few people.

In regards to retail, I’m not sure brands have even fully realized how to use all the data they’re pulling now (let alone pay for it), so limiting its use, IMO, will have minimal effect. What’s way more concerning is what to do with their physical assets (i.e.; stores) now that their focus, as well as the consumers, is online.

Cathy Hotka
BrainTrust

I’ve always said that if customers knew how much information companies had on them, they’d be shocked. Now they have an opportunity to see for themselves. Will they care?

Michael Decker
BrainTrust

The CCPA will rapidly spread to federal law in 2020. Why? Because it’s a tipping point resulting from real consumer fears over the consequences of corporate digital profiteering, database hacks, social media manipulation and identity theft. We as marketers made a serious mistake in trying to pull the wool over our digital customers’ eyes regarding the permissions to private information that they’ve “fully agreed to relinquish” buried in the mountain of fine print that no one ever reads or understands. “Just click and accept and your new widget will be on its way!” E-commerce is a convenient, fast and an unprecedented enhancement to the retail experience until it becomes manipulative and creepy. Our customers eventually figure out true business motivations and this bill is a natural market correction that will ensure necessary transparency — giving the power back to the consumer and ensuring a healthy return to retail loyalties.

Ralph Jacobson
BrainTrust

Although GDPR is EU-driven, all countries have to abide by those rules when transacting internationally. Our company abides by GDPR strictly here in the U.S., so the California law will not greatly alter our already strict guidelines.

For retailers, especially those that operate only in the U.S., the CA law will be a trigger for them to start taking data privacy and security seriously. It will not be long before the Feds come up with guidelines.

Craig Sundstrom
Guest

Laws mean little or nothing without enforcement and as the nature of the internet is to make enforcement of practically everything difficult (or impossible), I don’t expect much to come from this. A few high profile cases, but litigation from anyone with big pockets who wishes to challenge them (which of course is exactly the kind of companies who will be targeted for enforcement in the first place).

Jeffrey McNulty
BrainTrust

For far too long, businesses have been mining our data and using it in unscrupulous ways without our knowledge. I am glad to see that California is taking the lead on this topic and will be the benchmark for other states to follow.

With the ubiquity of data breaches, I am looking forward to having more control over my data.

Trinity Wiles
Guest

I think this will be a challenge for all retailers. I am interested to see how many consumers will choose to “opt-out” of sharing their personal information. Consumer expectations today are centered around a personalized experience with brands. For personalization, retailers need personal information.

wpDiscuz
Braintrust
"I expect consumers will follow a similar course with their data as they have with their email privileges: use my data to add value or lose the ability to sell my data."
"...this bill is a natural market correction that will ensure necessary transparency — giving the power back to the consumer and ensuring a healthy return to retail loyalties."
"The retailers who will suffer from CCPA are those that don’t understand, value or prioritize customers."

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