The perfect storm is brewing within global enterprises. The convergence of exploding data volumes and increasing data privacy regulatory requirements are creating conditions that require serious attention from businesses. IDC expects that by 2023, 102.6 zettabytes of new data to be created every year. These 102.6 zettabytes will most certainly be scattered with personal information of individuals — personal information that will be protected by the California Consumer Privacy Act (CCPA) when it goes into effect on January 1st, 2020.
Following a wave of heightened public awareness about privacy, CCPA endows data subjects with certain rights to their data and imposes penalties and grants private rights of action in the event of non-compliance. California by itself is one of the world's largest economies, so a state law enacted to protect the residents and visitors to the state will have effects far beyond its borders.
CCPA grants rights to California consumers and places requirements on businesses that make more than 50% of their revenue by selling data or have more than $25 million in annual revenue. These rights and requirements include:
Traditional manual methods of privacy compliance, driven off spreadsheets or simple web portals are no match to the real-time data control & orchestration needs of modern privacy regulations like CCPA. Following are the issues companies will see with manual or legacy compliance methods:
To comply with modern regulations like CCPA, we need to rethink privacy. Privacy needs to be operationalized with automated discovery of each individual’s data across structured and unstructured systems and layers of automation and orchestration on top of it to comply with all aspects of global privacy regulations. A PrivacyOps framework is required, which enables such individual-level data intelligence and layers of automation in a collaborative environment for various stakeholders.
Key requirements of an effective PrivacyOps framework are the following:
Adopting a PrivacyOps framework reduces costs associated with compliance, avoids legal penalties and helps avoid brand damage. For example, automating the DSAR process leveraging continuous real-time data intelligence can dramatically reduce the cost per DSAR, as well as improving accuracy and time to complete. Being able to complete DSARs within the required timeframes at scale avoids penalties and potential lawsuits and builds trust equity with customers. Similarly, breach notifications can be more surgical, leveraging accurate data intelligence to identify only those customers that were impacted – avoiding overly broad notifications that could incur more costs and penalties. And harnessing automated orchestration and data insights for vendor assessments eliminates the back and forth of emailing surveys and provides accurate data with less operational effort.
Data privacy regulations create a prime opportunity to revamp your data organization and integrations and create an integrated enterprise. Real-time compliance should be a goal, not just with DSARs, but also across as many regulatory processes as possible.
Organizations collect and store vast amounts of people’s data to provide services and enhance those over time. Consumers, on the other hand, are usually unaware of what data is being collected or used as long as continually improving services are being provided to them. CCPA (California Consumer Privacy Act) aims to give consumers more visibility, transparency, and control over their personal data. So, let's look at the four types of personal data under the CCPA, benefits of CCPA for consumers as well as organizations, the companies that fall under the ambit of CCPA, how they can comply and some key takeaways from this write-up.
According to CCPA, "Information that identifies, relates to, describes, is reasonably capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household" is classified as personal information.
The term "information" can be either objective or subjective depending on the category. Examples of objective information are the results of a blood test or other medical records. Subjective information is usually collected by banks and insurance companies, for example, "Mr. X is a reliable borrower." This means that certain data does not need to be verified as accurate in order to be classified as personal information.
Personal data doesn't always take the form of names, addresses, and birthdates. It can also show up as images, audio clips, or other personal information if it fulfills the CCPA requirements.
Some key examples of information that CCPA considers to be personal data are:
Personal data could also include inferences drawn from information, such as a consumer's preferences, characteristics, psychological trends, predispositions, behavior, attitudes, intelligence, abilities, and aptitudes. These forms of data also fall into the category of personal data under the CCPA.
Recent amendments to the CCPA introduced in Assembly bill 874 add the qualifier "reasonably," as in “...Information that identifies, relates to, describes, is reasonably capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household…”. This clarification can help in medical studies where large data sets are anonymized.
According to the CCPA definition, four requirements must be fulfilled for information to be deemed personal.
This requisite refers to information that clearly identifies a consumer or a household. This information could include a real name, social security number, and even an image of the person; these all constitute personal data under the CCPA.
This requirement refers to information that does not identify a person or household by its content but by its purpose. For example, it is debated that information gathered through cookies or alternate tracking methods can be classed as personal information that relates to a consumer and becomes a part of a consumer's personal data.
Information such as drug prescriptions, dosage, drug identification number, phone number and other information can be used to describe a consumer falls under the category of personal data under the CCPA.
In company databases and software, internal systems may embed tracking to keep data organized. Although this tracking system may not have the intent of tracking individuals, the CCPA classes any information taken from this system about an individual as personal data.
Now that we know what personal data is, enterprises need to know to whom the CCPA applies. There are two requirements that, when met, obligate an organization to comply with CCPA regulations:
1. The company collects personal data from California residents.
2. The company (or their parent company or a subsidiary) exceeds at least one of the three thresholds:
When a company fulfills these requirements, it must comply with the CCPA or deal with the repercussions.
Although this may seem like a narrow scope that excludes a lot of companies, experts have estimated that a potential 500,000 companies must comply with CCPA across the globe. This is mainly because of the financial and demographic weight of the state of California and its businesses. Whether an online business or working in the global market, chances are that an organization has interactions with at least some California resident
CCPA is designed to give consumers more power over their personal data. The rights embodied in CCPA give consumers more control over their data than ever before.
1. Consumers have the right to access their data that is held by companies, for free, up to twice every year.
2. Consumers have the right to opt-out from companies selling their data. They can also require companies to delete their information.
3. If there is a security breach in the company and a consumer's personal data is stolen, the CCPA fines the enterprise up to $750 per incident. With the amount of records stored by companies, these fines could translate to millions if not billions of dollars per data breach.
4. For children under 16, there is a mandatory opt-in for data collection. This requirement helps protect the privacy of minors.
Overall, the CCPA grants transparency to consumers from companies. From now on, companies must be upfront about the data that they possess, and they cannot sell that data without consumer consent.
With customers' ability to opt-out of data collection, data selling is more restricted and forces companies to collect their own data on a first-party basis. This strategy change means that companies have more accurate data and must know the exact origin of their data. This original data can be used to improve marketing activities and target the people that are a company's core audience.
The following are some fundamental building blocks of a state-of-the-art CCPA compliance solution:
Automatic Personal Data Discovery & People Data Graph Building
A fundamental building block of a CCPA compliance solution should be to automatically gather personal data across a myriad of systems like private apps and databases, IaaS and SaaS platforms. However, a comprehensive compliance solution shouldn’t stop there. Another critical function would be to automatically map this data to individuals, enabling a “people data graph” to ensure complete automation and compliance.
Secure Privacy Portal
A secure privacy portal with a cybersecurity focus is critical to collect and fulfill requests in a secure environment. Essentially, this portal would function as a secure interface between users who are requesting access to their data, and your employees who are fulfilling these data requests.
Robotic Automation of Data Subject Access Requests
With CCPA going into effect, we can expect a rise in DSARs being received by enterprises. Since fulfilling them requires a comprehensive search across a myriad of systems, manual fulfillment can be ruled out as a practical solution. Intelligent robotic automation can not only significantly cut down on DSAR fulfilment costs, it can also substantially reduce fulfillment times. A CCPA compliance solution built on state-of-the-art robotic automation protocols can be a powerful tool for any business operating in a post-CCPA world.
Automatically tracking the consent lifecycle across users will help a business understand when consent was given, the purpose of collection of user data, and update systems when consent is enabled or retracted by a user. Automation can accelerate this process more cost-effectively, with greater accuracy and at greater scale when compared to manual processes.
In the event of a system breach, a state-of-the-art compliance solution should follow certain protocols to inform regulatory authorities and people whose data has been impacted. This is where the people data graph can be used to inform only those customers whose data has been affected rather than having to inform all customers, saving an organization time, money and effort.
Vendor Assessment Ratings
Since PI data is often shared with vendors to ensure delivery of continually improving services to customers, a best-in-class CCPA compliance solution should also be able to conduct vendor assessments and rate them based on the type of PI data shared with them, while maintaining records of each vendor assessment for future use.
There should be automatic, routine self assessments across all internal systems being employed by a business to ensure they are compliant with the relevant data privacy regulations. The reports from these self assessments also need to be curated as well as automatically sent out to all relevant stakeholders to ensure continuous compliance with all relevant regulations. This is something that a CCPA compliance solution based on an advanced PrivacyOps framework would be able to provide.
Finally, a comprehensive CCPA compliance solution needs to have a centrally-accessible, easy-to-find and easy-to-acquire repository of all compliance records. This will ensure faster processing of compliance checks by regulatory authorities.
Visit PRIVACI.AI to learn about automating your operations and staying ahead of the pack by improving your policies and practices. Schedule a demo today and see how PrivacyOps automation and orchestration can help your business with CCPA compliance readiness.
January 2020 will usher in more than a New Year, it will also trigger the enactment of the California Consumer Privacy Act impacting about 500,000 organizations. As Patience Haggin outlines in her recent Wall Street Journal article, the CCPA “applies to any for-profit business that does business in California and collects data on California residents, as long as its annual revenue tops $25 million, or it holds personal information on at least 50,000 consumers, or it generates at least 50% of its annual revenue from selling user data.” This means that, whether or not you physically operate in the state of California, if your website serves the state’s residents, the new law applies to you as well.
The article, titled “Businesses Across the Board Scramble to Comply With California Data-Privacy Law,” comes as news to many. For us at SECURITI.ai, it’s further justification for the solution we provide, and the recognition is validating. Haggin explains how the CCPA will enable California residents to request retailers, restaurants, airlines, banks and many other companies to provide them with any personal information they may have, including individual contact information, purchases and loyalty-program history. Consumers are further empowered with the ability to request that businesses delete their data entirely, or opt out of letting them profit from it.
Haggin cites Gap Inc. as an example and includes quotes from Dan Koslofsky, associate general counsel for privacy and data security at Gap, discussing the massive undertaking that preparing for the CCPA presents to companies that haven’t previously been regulated -- i.e. anything other than healthcare or financial services.
According to the International Association of Privacy Professionals, there are over 500,000 U.S. businesses across across industries that will be required to comply when the CCPA takes effect. From food and beverage companies to retailers to health insurers, banks and airlines, there’s no industry that will go untouched by the new privacy laws.
As the amount of data we create has grown, no system to organize it has grown with it. Haggin writes, “few companies keep all their customer data in one place, and now many are scrambling to build tools to match up individuals’ data across disparate systems, such as directories, purchase histories and customer-service request logs.”
The upcoming change for businesses is significant, but not unprecedented. For instance, companies like Gap have already gone through similar compliance issues in Europe with the EU’s General Data Protection Regulation. The GDPR, which took effect last year, is similar in its scope of customer-data requirements.
According to a PricewaterhouseCoopers survey this past year, only 52% of businesses expect to be CCPA-compliant by January 2020. To illustrate the kinds of concerns businesses big and small are having, the WSJ quotes Jeff Savage, president of Sacramento’s minor league baseball River Cats, “I’m concerned about people falsely accusing us of having information on them when indeed we don’t. How do I prove to Joe Smith that I don’t have his info?”
The WSJ explains that businesses receiving data requests will be required to comply within 45 days or risk fines and litigation, and that “the law threatens steep damages in the event of a data breach—as high as $7,500 per affected person.”
Could the CCPA be a sign of things to come? The WSJ likens the law to another standard that began in California -- regulated auto emissions -- and many believe that the requirements of the CCPA may soon become the national standard. In other words, this is only the beginning for PrivacyOps.