Consumer Reports Endorses California Ballot Initiative To Broaden Privacy Law

The influential watchdog Consumer Reports has endorsed a ballot initiative aimed at strengthening California's already broad privacy law.

“This initiative will help to ensure that California consumers can stop some of the most privacy-invasive behaviors posed by the adtech ecosystem,” Consumer Reports states.

California's current Consumer Privacy Act, which took effect this year, gives consumers the right to learn what personal information about them is held by businesses, request deletion of that information, and opt out of its sale.

The 52-page Proposition 24, which will be on the California ballot in November, would broaden that law in several ways. Among others, the new measure would make it harder for companies to use data about race, ethnicity, health, or finances for advertising. Proposition 24 also aims to guarantee that consumers can opt out of online behavioral advertising.

The measure “would close up some of the worst loopholes that companies have exploited to deny consumers’ opt-out requests, better ensuring that consumers can exercise their privacy rights,” Consumer Reports states.

“Under Prop. 24, once opted out, Google and Facebook can’t share your information with third parties to show you ads,” the group adds. “Nor can they claim that hundreds of adtech companies are 'service providers' and exempt from the opt out.”

The current law's potential loophole involves classifying ad-tech companies as “service providers,” then claiming that data transfers to those companies are allowed even when consumers attempt to opt out of the sale of their data.

That strategy stems from the law's definition of “sale,” which excludes transfers made for business purposes, pursuant to contracts with service providers.

That apparent business-purpose exception has led some companies to contend that they don't “sell” data when they disclose information about web users pursuant to contracts with ad-tech companies -- provided the ad-tech companies use the data narrowly.

Privacy advocates overall have had mixed reactions to Proposition 24. Consumer Watchdog, Common Sense Media and the California NAACP support the initiative, as does former Democratic presidential candidate Andrew Yang.

But other advocates -- including the ACLU of California and Consumer Federation of California -- oppose it.

The Electronic Frontier Foundation declined to either endorse or oppose the proposal, calling it “a mixed bag of partial steps backwards and forwards."

The Mercury News recently urged readers to vote against the ballot initiative, arguing that several provisions in the lengthy bill don't go far enough to protect consumers' privacy.

Specifically, the newspaper points specifically to provisions in Proposition 24 that would allow companies to collect data on an opt-out basis, and that could allow companies to charge higher prices to consumers who don't want to be tracked.

“Businesses should only collect data on users that 'opt-in' by affirmatively granting permission,” the paper said in a recent editorial.

But Consumer Reports notes that the current California Consumer Privacy Act already allows companies to offer consumers incentives to share their data.

“Privacy is a right, and consumers shouldn’t be charged for exercising their privacy rights,” the organization states. “However, our analysis indicates that Prop. 24 does not meaningfully change the CCPA in that respect.”

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