A California ballot proposition could have a ripple effect across the US.
California enacted the country's toughest privacy law in 2018, but the Golden State isn't done considering new privacy regulations. Voters are now weighing a proposition that supporters say will give you more control over how tech giants use your data.
Like 2018's California Consumer Privacy Act, the new ballot proposition could prompt companies to change privacy policies across the board. Called the California Privacy Rights Act, the proposition could also revive efforts to pass similar bills in statehouses across the country.
At issue is whether the privacy protections will be effective, and whether the potential costs of running a new state agency, which the initiative calls for, are worth it at a time when the state's budget is threatened by the coronavirus pandemic. Voters will also sort through the reasons why some privacy advocates don't love the law. Here's what you need to know about Prop. 24, which will be on the Nov. 3 ballot.
The state legislature passed the California Consumer Privacy Act in 2018, giving consumers the right to ask for records of the personal data certain businesses have collected on them, and the right to tell the businesses to delete their data, or not to sell it.
Under Prop. 24, consumers could ask companies not to share their data, in addition to not selling it. Proponents say adding the word "share" would let consumers tell a business to stop showing them targeted ads, the intention of the 2018 law. Tech companies argue the ad targeting isn't a "sale" of your data, even though they make money from the transactions.
The proposition also eliminates a provision that lets companies avoid fines altogether if they fix violations within 30 days, and makes it easier for consumers to sue companies over preventable data breaches. It also forms a new government agency specifically for enforcing the law, the California Privacy Protection Agency.
Under the current law, the California Department of Justice is responsible for enforcement, though Attorney General Xavier Becerra warned in 2018 that his agency didn't have the funding to do the job. Prop. 24 requires the state to provide at least $10 million every year to fund the agency.
Prop. 24 would apply to fewer businesses in general. It also makes it clear that retailers can have loyalty programs that track customer shopping habits in exchange for discounts. If consumers in a loyalty program opt out of the retailer sharing or selling their data, the company can charge them a cost comparable to the value of their data.
Real estate developer Alastair Mactaggart got Prop. 24 on the ballot with his organization Californians for Consumer Privacy. He's also partially responsible for California's current privacy law.
In 2018, Mactaggart got a sweeping privacy proposition on the November ballot, which took aim at the intensive data collection involved in targeted advertising and offered users unprecedented rights over their personal information. In the wake of the Cambridge Analytica scandal, which made consumers deeply concerned about how tech companies use their data, voters were poised to approve the proposition.
Then, state legislators introduced a compromise bill that removed a requirement for lawmakers to approve future changes to the law by a margin of 70%. They struck a deal with Mactaggart to pass the law and he withdrew the ballot measure.
As Becerra's office prepared to start enforcing the law in 2020, Mactaggart and his allies became concerned that tech giants like Google and Facebook would keep using consumer data to target advertisements even when users ask the companies not to sell their data. They responded with Prop. 24.
Former presidential candidate Andrew Yang and US Representative Ro Khanna, whose district includes parts of Silicon Valley, support Prop. 24. They're joined by other state and local politicians, as well as Common Sense Media, a consumer advocacy group that has helped promote state and federal laws that protect children's online privacy. The law is also endorsed by Consumer Reports.
Privacy advocates at the Electronic Frontier Foundation don't support or oppose Prop. 24. In a blog post, the organization's experts wrote that Prop. 24 misses the opportunity to create a requirement for consumers to "opt-in" before businesses can collect their data. They also criticized a provision, also present in the 2018 law, that allows businesses to charge more if users opt for more privacy. (The charge must reflect the value of the data to the business.)
Mactaggart says allowing companies to ask for payment will help the struggling news industry, which will lose revenue when users ask news sites to stop using their data for targeted ads. He also said an "opt-in" structure would likely face a First Amendment challenge under the US Constitution, because it would infringe on the free speech rights of businesses.
More criticism comes from Mary Stone Ross, a lawyer who worked with Mactaggart on the first ballot measure. She's leading an effort to oppose Prop. 24. Her coalition, the California Consumer and Privacy Advocates Against Prop. 24, includes ACLU Northern California and the Consumer Federation of California.
Ross' coalition says the proposition would create a huge burden on users by making them opt out of data collection with hundreds of data brokers. Mactaggart said that's a misreading of the law, which at 52 pages will require interpretation from regulators.
You won't see tech giants or their trade groups opposing the proposition. Instead, the California Small Business Association and the Los Angeles Chamber of Commerce have come out against it.
They say the proposition will pile onerous requirements on businesses struggling during the coronavirus pandemic. They also question spending $10 million to create a new state privacy agency.
There's little information available on whether creating the agency would be a good financial decision. It might eventually pay for itself through fines, but that depends on how much the state would collect. California is also facing budget shortfalls due to increased spending and less tax revenue from the pandemic.
More federal stimulus money could help fill these budget gaps, but a second federal stimulus is delayed. Voters likely won't know if there will be federal funding for California until after the election.