CCPA Compliance: Essential Steps for California Businesses

CCPA at a Glance

• The California Consumer Privacy Act (CCPA) requires businesses to give California residents control over their personal data when companies earn over $25 million annually or handle data from 50,000+ consumers
• Companies must honor consumer requests to access, delete, or stop the sale of their personal information within 45 days
• Companies that collect, use, or share personal information of California residents must comply with the CCPA or face significant penalties.

Understanding CCPA

The CCPA gives consumers specific rights regarding their personal information, including the right to know what kind of data is collected, request deletion of their data, and opt out of its sale. For businesses, this means implementing new processes and systems to honor these requests and maintain transparency about data practices.

Achieving CCPA compliance involves a comprehensive review of data collection and handling practices. Organizations need to update privacy policies, train employees, and establish mechanisms for responding to consumer requests. The California Privacy Protection Agency enforces the CCPA and provides guidance on compliance requirements.

CCPA applies to for-profit entities doing business in California that meet certain thresholds. These include annual gross revenues over $25 million or handling personal information of 50,000+ consumers.

Rights granted by CCPA

The CCPA can be boiled down to three core "rights" when it comes to user data.

Right to know

CCPA grants consumers the right to know what personal information businesses have collected about them. This includes details on the categories of data gathered, its sources, and how it's being used. Consumers can request this information twice a year at no cost.

Businesses must respond to these requests within 45 days. They need to provide a clear, comprehensive report covering the past 12 months of data collection and usage.

The right to know extends to sharing practices. Consumers can ask which third parties have received their data and for what purposes.

Right to delete

Consumers have the right to request deletion of their personal information collected by businesses. This applies to data gathered directly from the consumer or obtained through other sources.

Some exceptions exist to these data privacy laws:

• Data necessary to complete transactions
• Information required for legal compliance
• Data needed for security purposes

Businesses must verify the identity of the requester before deleting information. They should also notify third parties to delete any shared data.

Companies can deny deletion requests in certain cases, but must explain their reasons to the consumer.

Right to opt-out

The CCPA gives consumers the right to opt out of the sale of their personal information. Businesses must provide a clear, easy-to-find "Do Not Sell My Personal Information" link on their websites.

Key aspects of this right include:

• Businesses can't require account creation to opt out
• Opt-out requests must be honored for at least 12 months
• Companies need parental consent to sell data of children under 16

After opting out, businesses can ask consumers to opt back in, but not for at least 12 months after the initial opt-out.

CCPA compliance requirements

In addition to the "three rights," the CCPA sets forth other specific obligations for businesses handling personal information of California residents. These requirements focus on transparency, data protection, and consumer rights.

Privacy policy updates

CCPA compliance mandates that businesses update their privacy policies to include detailed information about data collection and use. Companies must disclose:

• Categories of personal information collected

• Purposes for collecting personal information

• Third parties with whom data is shared

• Consumer rights under CCPA

Privacy policies should be written in clear, straightforward language and may not include dark patterns. They must be easily accessible on the company's website and updated at least annually.

Businesses need to inform consumers about their right to opt-out of data sales. This information should be prominently displayed, and is most commonly seen as a "Do Not Sell My Personal Information" link.

Data protection measures

CCPA requires businesses to implement reasonable security measures to safeguard personal information. This includes:

• Encryption of sensitive personal information

• Access controls and authentication

• Regular security assessments

• Employee training on data handling

Companies should adopt a risk-based approach to data protection. This involves identifying potential threats and implementing appropriate safeguards.

Businesses must also ensure that third-party vendors comply with CCPA requirements. This often involves updating contracts and conducting due diligence on data handling practices.

Consumer request management

CCPA grants California residents specific rights regarding their personal information. Businesses must establish processes to handle consumer requests, including:

• Right to know what personal information is collected

• Right to delete personal information

• Right to opt-out of data sales

• Right to non-discrimination for exercising CCPA rights

Companies need to verify the identity of consumers making requests. They must respond to verified requests within 45 days, with a possible 45-day extension if necessary.

Businesses should train employees handling consumer inquiries on CCPA requirements. This ensures proper management of requests and compliance with response timelines.

Managing both data protection and consumer requests can feel like spinning plates. You need robust security measures while also staying on top of access and deletion requests within strict timelines. This is exactly why we built Transcend.

Our platform combines automated security controls with streamlined request handling, so you're not scrambling to piece together different solutions. When a consumer asks for their data or wants to opt out of sales, our system handles the verification, tracks the 45-day timeline, and makes sure the request gets fulfilled across your entire data ecosystem.

Plus, we keep your security measures and vendor oversight running smoothly in the background.

CCPA implications for Businesses

Scope and applicability

The CCPA applies to for-profit businesses that meet specific criteria. Companies must comply if they:

1. Have a gross annual revenue exceeding $25 million
2. Handle personal information of 50,000 or more California consumers OR
3. Derive at least 50% of their annual revenue from selling personal information

Small businesses are not exempt if they meet these thresholds. The law's reach extends beyond California-based companies to any entity doing business in the state and meeting the criteria.

Impact on for-profit organizations

For-profit organizations face several key impacts from CCPA compliance:

1. Data inventory and mapping: Companies must identify and categorize all personal information they collect.
2. Consumer rights management: Businesses need systems to handle consumer requests for data access, deletion, and opt-out of data sales.
3. Privacy policy updates: Organizations must revise their privacy policies to include CCPA-mandated disclosures.
4. Employee training: Staff handling consumer inquiries need training on CCPA requirements and procedures.
5. Vendor management: Companies must ensure their service providers comply with CCPA standards.
6. Data security: Enhanced measures are necessary to protect personal information from breaches.

These changes often require significant time and resource investments for affected businesses.

Managing personal information

You can't have CCPA compliance without proper data organization and management. It's the foundational skill necessary for staying compliant, building user trust, and avoiding costly penalties. Here are some overarching principles that a CCPA-compliant organization must practice.

Data collection practices

Organizations should clearly inform consumers about the types of personal information collected and the purposes for which it will be used. This information should be provided in an easily accessible privacy policy.

Companies need to obtain explicit consent before collecting sensitive personal information. They must also provide consumers with the option to opt-out of the sale or sharing of their personal information.

Once you've collected the data, then comes the tricky part – keeping it organized. This includes documenting the categories of personal information collected, the sources of that information, and the third parties with whom it's shared.

To solve this very problem, Transcend's Data Inventory solution automatically maps out where your data lives and how it flows, giving you a clear picture of your data ecosystem without the manual hassle.

Data minimization standards

Data minimization is a core principle of CCPA compliance (and a data management best practice in general). It means businesses must limit the collection of personal information to only what is necessary for the specific purpose disclosed to the consumer.

Companies should regularly review their data holdings and delete any information that’s no longer needed. This reduces the risk of a data breach and helps ensure compliance with CCPA's data retention requirements.

But it doesn't just stop with how businesses themselves handle data.

Here's the catch: yes, your business can be held liable if a third party mishandles the personal data you've shared with them. Even with solid contracts in place, you're still responsible for how your vendors treat consumer data.

Regular audits or check-ins of your partners' data practices can help identify areas where unnecessary information is being collected or retained.

This is why we built Transcend with comprehensive data mapping in mind. Our Data Inventory tool helps you understand where your data lives and flows, making it easier to maintain oversight of your data practices and stay compliant with CCPA requirements.

Handling data breaches and security

You might be the most meticulous, compliant data manager in the world, but that won't protect you against cybersecurity threats and bad actors intent on stealing valuable user information.

Organizations are also held accountable in the event of data breaches, which means having strong protections and clear response protocols in place to mitigate potential damages and comply with legal requirements.

Best practices for preventing data breaches

Preventing data breaches isn't rocket science, but it requires a level of diligence and caution that many organizations neglect (at their peril).

Here are some best practices:

• Access control management: Give employees access only to the data they absolutely need for their jobs. Not everyone needs to see everything.
• Employee training: Run frequent security awareness sessions so your team knows how to spot potential threats and handle data safely.
• Data encryption: Protect sensitive information with strong encryption: both when it's being stored and when it's moving between systems.
• Incident response planning: Create and regularly test your response plan so everyone knows exactly what to do if a breach occurs.
• Vendor security assessment: Check that any third parties handling personal data on your behalf follow strong security practices and meet compliance requirements.
• Data minimization: Only collect and keep the data you actually need. You can't leak what you don't have.
• Multi-factor authentication: Add an extra layer of security beyond passwords to verify user identities.
• Regular security audits: Schedule systematic reviews of your security measures to spot and fix vulnerabilities before they're exploited.

The Swiss cheese model in data security

The Swiss cheese model presents a helpful way to think about data security. Picture several slices of Swiss cheese stacked together—each slice represents a different security measure, and the holes represent potential weaknesses.

While each individual slice (or security measure) has gaps, when you stack them together, it becomes much harder for anything to slip through all the holes at once. One layer's strength covers another layer's weakness.

Let's see how this applies to preventing data breaches:

• Your first slice might be strong access controls
• The next slice could be data encryption
• Another slice would be employee training
• Yet another might be regular security audits
• And so on...

Even if someone gets through one layer (like bypassing an access control), they'd still need to get through encryption, avoid detection from monitoring systems, and bypass other security measures. Each layer makes a successful breach less likely.

Responding to data breaches

When a data breach occurs, swift action is essential. The CCPA requires companies to notify affected California residents within 30 days of discovering a breach. This notification must include specific details about the incident and advice on protecting against identity theft.

Companies should have an incident response plan ready, including (but not limited to):

• Steps to contain and assess the breach
• Roles and responsibilities of the response team
• Communication protocols for notifying affected individuals and authorities
• Procedures for preserving evidence for potential investigations

Failure to maintain reasonable security measures can result in statutory damages of $100 to $750 per consumer per incident, not to mention potential civil penalties.

Consumer communication and requests

A huge part of CCPA compliance is giving people the ability to request their data at any point, as well as ask that it be deleted.

If manually setting up the infrastructure to support this sounds like a headache, trust us, it is. That's why we built Transcend DSR Automation—a streamlined DSR solution that automatically handles data subject requests across your entire tech stack without needing constant human intervention.

Here's what's required under CCPA and how Transcend can help:

Setting up request channels

Companies need to create accessible methods for consumers to submit requests related to their personal information. Verifiable consumer requests must be responded to within 45 days, with a 10-business-day confirmation of receipt.

While many companies rely on a patchwork of channels like toll-free numbers and email addresses, Transcend offers a more streamlined approach—a self-serve privacy center where users can easily submit and track their requests. Our system automatically:

• Verifies user identity
• Tracks request timelines
• Finds and packages requested data
• Documents everything for compliance

This beats the traditional approach of training staff to manually handle requests, which is not only time-consuming but prone to human error.

Plus, Transcend maintains detailed records of all requests and responses for that crucial 24-month period, which is essential for demonstrating compliance during audits.

Non-discrimination policies

Non-discrimination policies CCPA prohibits businesses from discriminating against consumers who exercise their data privacy rights. This means companies cannot:

• Deny goods or services
• Charge different prices
• Provide a different quality of goods or services
• Suggest that the consumer will receive different treatment

Businesses must treat all consumers equally, regardless of whether they choose to exercise their CCPA rights. This ensures fair practices and prevents retaliation against consumers who value their privacy.

Here's the good news: when you automate your privacy request process with Transcend, every request gets handled the same way, making it easier to prove you're treating all consumers fairly.

No manual decisions means no accidental discrimination, and our detailed documentation helps show you're playing by the rules.

The role of the California Privacy Protection Agency

The California Privacy Protection Agency (CPPA) plays a crucial role in enforcing privacy laws in the state. Simply put, they're the ones that come after you if you don't abide by CCPA standards.

Established in 2020, the CPPA (which is a confusingly similar acronym to CCPA) oversees consumer privacy protection and ensures businesses comply with regulations.

The CPPA's primary responsibility is to implement and enforce the California Privacy Rights Act (CPRA). This law expands on the California Consumer Privacy Act (CCPA) and grants additional rights to consumers regarding their personal information.

Key functions of the CPPA include:

• Rulemaking
• Investigation
• Enforcement
• Education

The agency has the authority to issue substantial fines for violations of privacy laws and provides resources to help Californians understand their rights and how to exercise them.

For businesses, the CPPA offers guidance on compliance with privacy regulations. This support helps companies align their practices with legal requirements and avoid potential penalties.

The CPPA also collaborates with other government entities to address privacy concerns, enhancing the overall effectiveness of privacy protection efforts in California.

CCPA vs. GDPR: Distinctions

While both aim to protect personal data, the CCPA and GDPR have notable differences. The CCPA's definition of personal information is broader than GDPR's, including household data.

GDPR requires a legal basis for data processing, while CCPA focuses on the right to opt-out of data sales. The CCPA's scope is limited to California residents, whereas GDPR protects EU data subjects regardless of location.

Penalties also differ. GDPR fines can reach up to 4% of global annual turnover, while CCPA violations incur fines of up to $7,500 per intentional violation. GDPR also mandates data protection officers, but CCPA does not have this requirement.

About Transcend

Has your organization has been impacted by the California Consumer Protection Act or other consumer privacy laws? Transcend, the next-generation platform for modern privacy and data governance, can help you ensure compliance.

From Consent Management, to automated DSR Automation, to a full suite of data mapping solutions (Data Inventory, Silo Discovery, Structured Discovery, and more), Transcend has you covered as your company grows and evolves in a swiftly changing regulatory environment.