The Secure Times

An online forum of the ABA Section of Antitrust Law's Privacy and Information Security Committee

California Continues to Expand Consumer Privacy Protections, Enacting Further Amendments to CalOPPA and the Data Breach Notification Law

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On September 27, California Governor Jerry Brown signed into law two bills—both to take effect January 1, 2014—that expand the online privacy protections for California residents.  These two new laws were the second and third enacted during September, as the Governor signed a bill imposing restrictions on the advertising of certain products marketed to minors earlier that week, and demonstrate that the California legislature continues to prioritize consumer privacy by amending its legislation to reflect changes in the way websites collect, and consumers provide, personal information online.

“Do Not Track” Disclosures

The first bill, AB 370, amends the California Online Privacy Protection Act (“CalOPPA”) (Cal. Bus. & Prof. Code § 22575 et seq.), requiring that the privacy policy posted on all commercial websites include a disclosure explaining how the website operator responds to mechanisms, such as “Do Not Track” signals, that provide consumers with the ability to exercise choice regarding personally identifiable information collection over time and across third-party websites.

The new law states that website operators may satisfy this requirement by providing a clear and conspicuous hyperlink in the privacy policy that links to a description, including the effects, of any program or protocol the operator follows that offers consumers that choice, but defines neither the content of the disclosure nor “do not track.”

Data Breach Notification for Disclosure of Online Account Access Information

The second bill, SB 46, amends California’s data breach notification law (Cal. Civ. Code § 1798 et seq.), adding to the definition of “personal information” certain information that would permit access to an online account, and imposing additional disclosure requirements if a breach involves personal information that would permit access to an online account or email account.  Specifically, the legislation adds to the definition of personal information “a user name or email address, in combination with a password or security question and answer that would permit access to an online account.”   A breach of this information, if unencrypted, of any California resident would trigger the state’s data breach notification obligations.

In the case of disclosure of this type of personal information, however, a company will be permitted to notify affected California residents by alternative means.  If the breach involves no other personal information, a company may notify the affected resident in electronic or other form that directs the resident to change his/her password and security question or answer, as applicable, or to take other steps appropriate to protect the affected online account and all other online accounts with the same user name or email address and password or security question and answer.

However, if the breach involves the login credentials of an email account furnished by the company, it cannot provide notification to that email address, but may provide notice by:  (1) one of the methods currently permitted under the law for notification of a breach of unencrypted personal information; or (2) by clear and conspicuous notice delivered to the resident online when the resident is connected to the online account from an IP address or online location from which the company knows the resident customarily accesses the account.

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Author: Katie Riley

Associate in Kelley Drye & Warren LLP's Advertising & Marketing practice group.

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