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What Is the CCPA?

The CCPA, more officially known as the California Consumer Privacy Act or AB 375, is a state-wide data privacy law in California. It is the first law of its kind in the U.S.

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The CCPA regulates how businesses worldwide can handle personal information, or PI, of California residents. Though the CCPA was passed by the California state legislature in 2018, it first came into effect on January 1, 2020. The law became enforceable on July 1, 2020.

Who Does the CCPA Affect?

The CCPA is similar to the General Data Protection Regulation, or GDPR, in the European Union. As with the GDPR, the CCPA deals with consumers' data privacy rights. The law forces many organizations to protect the privacy rights of their consumers.

The CCPA specifically covers consumers who are California residents. However, businesses around the world must comply with CCPA regulations if they have consumers from California. Businesses do not need to be based in California to fall under the law. Companies do not even need to have a physical presence in California or in the United States to fall under this law if they meet certain requirements.

Requirements for Businesses

Not all businesses must comply with the regulations in the CCPA. The CCPA applies if a company fits in one or more of the following categories:

  • The business buys, sells, or receives personal information of 50,000 or more devices, consumers, or households.
  • The business derives half or more of its revenue from selling personal information of consumers.
  • The business has a gross annual revenue that exceeds $25 million.

Under the CCPA, businesses that handle personal information for more than four million consumers have additional obligations as well.


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A later amendment exempts insurance institutions, agents, and organizations that already fall under similar regulation of the Insurance Information and Privacy Protection Act, or IIPPA, in California.

Additionally, the following businesses are exempt from the CCPA as they are covered under federal data security laws already:

Protections for Consumers

The CCPA allows any California consumer to:

  • Demand to see all information a company has saved about them.
  • Demand to see a full list of all third parties a company shares their data with.
  • Sue companies in cases when privacy guidelines are violated, and consumers can sue companies even if no breach occurs.

California residents, or consumers, have the right to:

  • Opt out of having data sold to third parties.
  • Request disclosure of data that has already been collected.
  • Request that data collected be deleted.
  • Be notified and receive equal prices and services — companies cannot discriminate against consumers based on a consumer's choice to exercise these rights.

What Happens When a Company Is Not in Compliance With the CCPA?

Once regulators notify a business of a violation, the company has 30 days to comply with the law. If the issue is not resolved in that time, businesses are subject to a fine per record.

Fines may be between $100 and $750 per consumer per alleged violation, or the actual damages — whichever amount is greater.

Consumers also have the right to sue businesses if they believe their privacy rights were violated. The CCPA allows for class action lawsuits as well.

Data the CCPA Covers

The CCPA covers personal information. Examples of what the law considers personal information includes:

  • Biometric information.
  • Geolocation data.
  • Characteristics of protected classifications under federal or California law.
  • Identifiers, including:
    • Driver's license number
    • Social Security number
    • Passport number
    • Account name
    • Postal address
    • Email address
    • Online identifier IP address
    • Real name
    • Alias
  • Commercial information, including:
    • Products purchased, obtained, or considered
    • Services purchased, obtained, or considered
    • Records of personal property
  • Purchasing/consuming histories/tendencies.
  • Internet/electronic network activity such as:
    • Browsing history
    • Search history
    • Information about the consumer's interaction with applications, advertisements, or websites
  • Education information, as defined in the Family Education Rights and Privacy Act (FERPA) as not publicly available PII, or personally identifiable information.
  • Audio, electronic, olfactory, thermal, visual, or similar information.

The CCPA also covers inferences drawn from the above information to create a consumer profile reflecting things such as a consumer's:

  • Abilities
  • Aptitudes
  • Attitudes
  • Behavior
  • Characteristics
  • Intelligence
  • Predispositions
  • Preferences
  • Psychological trends

Key Provisions of the CCPA

The CCPA stipulates that companies covered by the law must allow consumers to choose not to have data shared with third parties. In practical terms, that means companies now must be able to separate data they collect following their users' privacy choices.

Companies are not required to report breaches under this law. Additionally, before fines are possible, a consumer must file a complaint.

Enforcement of the CCPA

In addition to granting Californians the right to sue businesses that do not take reasonable precautions to prevent data breaches, the CCPA can be enforced. The Office of the Attorney General of California has the power to enforce the CCPA. However, the state has limited enforcement capabilities, as there are not enough resources to ensure that all companies comply with the law at the same time that they manage non-compliance cases.

What Must a Business Do to Be In Compliance With the CCPA?

If your business falls under the CCPA, you are required to:

  • Allow consumers to deal with their personal data in the business's storage in the following ways:
    • Choosing to opt-out
    • Choosing to read the data
    • Choosing to delete the data
  • Disclose financial incentives for your business to sell or retain a consumer's personal data as well as how you value the data.
  • Respond to requests from consumers within specific timeframes.
  • Verify the identity of any consumer who requests to read/delete their information; this is the case even if the consumer has a password-protected account.
  • Keep records of access requests and how your business responded for 24 months.

You must ensure that your company's website:

  • Includes a "Do Not Sell My Personal Information" link so that users may opt out of third-party data sales.
  • Informs users about categories of personal information collected (and for what purposes) at or before the point of data collection.
  • Obtains opt-in/consent before selling or disclosing personal information of minors under the age of 16; parents or legal guardians must opt in for minors under 13.
  • Updates its privacy policy to include:
    • A description of consumer's rights
    • An explanation of how to exercise rights
    • A list, updated annually, of personal information categories the company collects/sells/discloses
  • Shows consumer privacy settings that signal the choice to opt out.

If your company gets a verifiable request from a consumer requesting disclosure of personal information your business has collected, you must provide records of personal information that have been collected in the past 12 months. You must do this free of charge. These records include:

  • Categories of third parties that have received the records
  • Commercial purposes
  • Sources

Your company must not discriminate based on a consumer's decision to exercise the right to:

  • Opt out
  • Request disclosure
  • Request deletion

The CCPA laws are now in effect, and will change the way businesses deal with data across the country. As almost all bigger businesses have some customers based in California, the CCPA has tremendous implications for data privacy laws. For more help with privacy policies and contracts, contact us .

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

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