In 2018, California enacted the California Consumer Privacy Act (“CCPA”). The CCPA represents an ambitious attempt by a U.S. state to protect the personal data of its citizens. The provisions of the CCPA officially came into effect on Jan. 1 of this year. It offers what is essentially an omnibus privacy regime that applies to nearly all businesses in California and a broad definition of “personal information” that applies to nearly any data a business would collect from a consumer.

However, the requirements of the Act are complex, and the rollout is incomplete. On January 29th, five powerful trade associations representing the advertising industry wrote a letter to the California Attorney General asking her to delay implementation of the CCPA. The industry is concerned about compliance obligations and a need for clarity and certainty in order to properly implement its provisions. In the past, the industry has called for Congress to pass federal privacy protections due to similar concerns and a desire to avoid a patchwork of state privacy laws.

While these concerns may very well be valid, the digital advertising industry is worth over $100 billion, and the industry’s motivations may not align with consumers. It will be important to watch how the attorney general responds to industry concerns and if the privacy protections of the CCPA get watered down. The importance of this legislation cannot be stressed enough as the issues that result from California’s implementation of the CCPA will affect a broad range of U.S. companies and future debate over federal privacy regulation.

California is the largest market in the United States and a hub for many important technology companies. As such, the CCPA has a broad jurisdictional reach, affecting the behavior of any company that wants to sell in the California market but not incur the costs of implementing multiple privacy compliance regimes. Moreover, states across the country are considering their own privacy legislation, and legislators will almost certainly consider CCPA as a model and closely follow its successes and failures.

Currently, there is evidence of overwhelming bipartisan support for federal privacy legislation to protect online data. Although it remains to be seen whether Congress will act this session, it seems likely that a federal privacy bill is coming. If California regulators bow to pressure from the advertising industry, this could spell doom for a federal privacy bill that offers strong consumer protections. On the other hand, working out the kinks ahead of time may lead to more effective federal legislation. Either way, the rollout and enforcement of CCPA will have significant consequences for businesses and consumers across the country for years to come.

Kyle McKibbin

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