California Voters Approve Privacy Law Expansion

California voters appear to have approved a ballot initiative aimed at broadening the state's already broad privacy law.

The Consumer Privacy Rights Act (Proposition 24), which had garnered more than 56% of the reported vote as of Wednesday morning, will make it harder for companies to use data about race, ethnicity, health, or finances for advertising.

The measure also aims to guarantee that consumers can opt out of online behavioral advertising. The law's restrictions on the use of data will take effect in 2023.

Additionally, the initiative creates a new privacy agency, to be established next year, to oversee compliance.

Former Democratic presidential candidate Andrew Yang, who was among the most prominent backers of the initiative, not only cheered news of the vote but called for other states to pass similar measures.

“So excited that Prop 24 has passed -- our data and privacy should be ours!” he tweeted Wednesday morning. “Way to go California -- now for other states to follow suit!”

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Ad industry groups that had opposed the measure -- including the American Association of Advertising Agencies, American Advertising Federation, Association of National Advertisers, Interactive Advertising Bureau, and Network Advertising Initiative -- on Wednesday reiterated their support for a federal privacy law.

“In the absence of federal action, consumers and businesses face a conflicting patchwork of privacy laws that offer uneven protection, confuse consumers and businesses, and create uncertainty that stifles marketplace innovation,” Dave Grimaldi, IAB’s executive vice president for public policy, stated Wednesday.

Stacey Gray, senior counsel at the think tank Future of Privacy Forum, predicts that passage of the ballot initiative will "energize the conversation around federal privacy law."

The think tank added in a blog post that the new establishment of a state agency dedicated to privacy is a "major milestone for privacy in the US," and could "potentially lead to discussions with EU officials regarding the adequacy and interoperability of California privacy law with Europe’s General Data Protection Regulation."

Privacy advocates were divided about the initiative. Consumer Reports, the California NAACP and Common Sense Media backed Proposition 24, but the ACLU of California, Consumer Federation of California and Center for Digital Democracy opposed it.

California's current privacy law, 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. 

But that existing law has some ambiguities that could allow companies to continue serving targeted ads to people who have attempted to opt out of the sale of their data. 

When Consumer Reports endorsed Proposition 24, the organization said the initiative 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."


 

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