California’s new consumer privacy law is facing a backlash from businesses around the U.S. which contend the law will hurt all sorts of companies, whether it’s retailers or customer loyalty programs.
The Wall Street Journal, citing businesses, reported lots of companies last week were figuring out what they have to do to have stronger privacy practices on the books, while others are gearing up to make a big lobbying effort to get the law changed before it goes into effect in 2020. “This is the broadest, [most] sweeping piece of privacy legislation in the nation now, without question, so we are doing our due diligence as to what it means,” said Brad Weltman, vice president of public policy at the Interactive Advertising Bureau, an internet advertising trade body that has members including Google, Facebook and Microsoft. What's more, David French, senior vice president of government relations at the National Retail Federation, told The Wall Street Journal that under the law customers who opt out of data sharing have to be treated the same as those that share data, which could spell the demise of loyalty programs that offer discounts. French said other personalized marketing campaigns and apps that use location data could also be at risk of going away thanks to the law. “The consumer will actually be the big loser,” he said.
Under the new law, consumers now have the right to know what information companies are collecting, why they are doing that and who they are sharing it with. Customers can also tell companies to get rid of information on them and to not share their data with third parties. Businesses are required to provide the same level of service even if customers opt out of sharing their data with the company.
The paper noted that tech companies, in particular, think the law is a quick reaction to Facebook's data breach — in which now-defunct political consulting firm Cambridge Analytica accessed data on 87 million Facebook users without their consent — and other recent breaches. The companies, noted the WSJ, are unhappy that California lawmakers didn’t consult them when figuring out how to implement the law. Still, the tech companies were more in favor of legislation than a ballot initiative that would have come up for a vote in November and is even more restrictive than the current law. The law “marks some improvements to an overly vague and broad ballot measure — it came together under extreme time pressure, and imposes sweeping novel obligations on thousands of large and small businesses around the world,” a Google spokeswoman told the WSJ. Meanwhile, Facebook thinks it could be compliant, given the changes it has made to its platform in recent months.