Commentary

California May Defang New Privacy Law

Last year, California lawmakers passed the toughest privacy law in the country. Now, legislators might be preparing to weaken the measure. 

The California Consumer Privacy Act, slated to take effect next year, gives consumers the right to learn what information has been collected about them by companies, have that information deleted, and prevent the sale of that data.

The measure also has a provision that prohibits companies from charging higher prices to consumers who opt out of data collection and selling.

Passage of the law so rattled the ad industry that it reversed a longstanding position against privacy legislation: Last year, in a stunning reversal, the Interactive Advertising Bureau asked Congress to pass a national privacy law that would override California's measure.

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Now, however, lawmakers in California's state house appear to be rethinking the measure. This week, the state Assembly Privacy and Consumer Protection Committee advanced several proposed revisions that could make the law more marketer-friendly.

One of those proposals would explicitly allow companies to offer “loyalty” programs that give consumers discounts in exchange for their data. But that amendment (AB 846) is so broadly worded that it could significantly undercut the landmark law by paving the way for pay-for-privacy schemes, privacy advocates warn.

“The 'loyalty club' exception contains virtually no limitations on when a business may charge a higher price or provide a lower quality because consumers exercise their privacy rights,” the ACLU, Center for Digital Democracy, Electronic Frontier Foundation and others wrote to lawmakers earlier this month. “This bill would allow a company to discriminate against a consumer, by charging a higher price, if the consumer opted out of the sale of their personal information to another business.”

In other words, the amendment could go well beyond allowing individual retailers to give discounts to their best customers. Instead, it could allow businesses to impose higher fees on people who don't want their data used for ad targeting.

Despite the opposition from advocates, the vote in the committee was a landslide: Nine members voted in favor of the law, while two abstained. Whether the full legislature approves the amendment remains to be seen.

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