What is CCPA: A Concise Guide to California's Privacy Law

CCPA at a glance

• The California Consumer Privacy Act (CCPA) gives California residents control over their personal data, including the right to know what's collected, delete their data, and stop its sale.
• The law applies to businesses that make over $25M annually and handle data from 50,000+ California residents or earn 50%+ of revenue from selling personal information.
• Companies under the CCPA need to respond to privacy requests within 45 days and can face fines from California's Attorney General of up to $7,500 per intentional violation.

Understanding the CCPA

Key definitions and scope

The CCPA defines "consumers" as California residents. This broad definition extends beyond typical customers to include employees and B2B contacts.

"Personal information" under the CCPA covers a wide range of data that can be linked to a consumer or household. This includes:

• Names and addresses
• Social Security numbers
• Biometric data
• Internet browsing history
• Geolocation data

The law applies to for-profit businesses that have:

1. An annual gross revenue over $25 million
2. Buy, sell, or share personal information for 50,000+ consumers annually
3. Derive 50%+ of revenue from selling consumers' personal data

Video resource: What is CCPA?

Historical context

California, known for its progressive stance on consumer protection, took the lead in creating comprehensive privacy legislation in the U.S.

The CCPA was passed in 2018 in response to growing concerns about data privacy—following major data breaches and the Cambridge Analytica scandal.

Going into effect on January 1, 2020, the CCPA drew inspiration from the EU's General Data Protection Regulation (GDPR) but has distinct differences tailored to the U.S. legal environment.

CCPA vs. GDPR

While both CCPA and the General Data Protection Regulation (GDPR) aim to protect personal data, they differ in several key ways:

1. Scope: GDPR applies to all EU residents, while CCPA covers only California residents.
2. Consent: GDPR requires explicit consent for data collection. CCPA allows data collection but gives consumers the right to opt-out of data sales.
3. Fines: GDPR imposes higher maximum fines (up to 4% of global annual turnover), while CCPA fines are lower but can accumulate per violation.
4. Data subject rights: Both laws grant rights like access and deletion, but CCPA includes unique rights such as opting out of data sales. Learn more about consumer rights under the GDPR here.
5. Businesses affected: GDPR applies to all businesses processing EU residents' data, while the CCPA has specific thresholds for applicability.

Rights under the CCPA

The California Consumer Privacy Act (CCPA) grants California residents specific rights regarding their personal information. These rights give consumers more control over how businesses collect and use their data and can be boiled down to four core tenets.

1. Right to know

California residents have the right to know what personal information businesses collect about them. This includes:

• Categories of personal information collected
• Sources of that information
• Purpose for collecting or selling the information
• Categories of third parties with whom the information is shared

Consumers can request this information for the previous 12 months. Businesses must respond to these requests within 45 days.

The right to know extends to specific pieces of personal information, including names, addresses, purchase histories, and geolocation data.

2. Right to delete

Under the CCPA, consumers can request that businesses delete the personal information an organization has collected about them.

Businesses must comply with these requests, though there are a few exceptions:

• Completing transactions
• Detecting security incidents
• Complying with legal obligations
• Using the information for internal purposes aligned with consumer expectations

Companies must verify the identity of any consumer making a deletion request. They should also notify service providers to delete the information.

3. 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 "Do Not Sell My Personal Information" link on their website.

For consumers under 16, businesses need opt-in consent before selling their data. Parents or guardians must provide consent for children under 13.

This opt-out right also covers sharing personal information for cross-context behavioral advertising, including targeted advertising based on consumer behavior across different websites or apps.

4. Right to non-discrimination

Businesses cannot discriminate against consumers who exercise their CCPA rights. This means they can't:

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

Businesses can, however, offer financial incentives for collecting, selling, or keeping personal information. These incentives must be reasonably related to the value of the consumer's data.

Companies must clearly disclose these incentives and obtain consumer opt-in consent. Consumers have the right to withdraw from these programs at any time.

Ensuring CCPA compliance for your business

The California Consumer Privacy Act (CCPA) establishes strict guidelines for businesses handling personal information of California residents. Complying with CCPA involves meeting specific requirements, adapting business practices, and effectively managing consumer requests.

Video resource: What is the CCPA? Where does it apply? How do I comply?

Compliance requirements

CCPA regulations require that covered businesses implement comprehensive data protection measures, including:

• Providing clear privacy notices to consumers
• Obtaining consent for data collection and use
• Maintaining accurate records of personal information
• Implementing security measures to safeguard data

Businesses must also offer consumers the right to access, delete, and opt-out of the sale of their personal information.

Regular staff training on CCPA policies and procedures is key for maintaining compliance. While this might sound overwhelming (and it can be when done manually), tools like Transcend automate these privacy requests and make it easier to maintain accurate data records.

As the next-generation privacy platform, Transcend handles the technical heavy lifting so your teams can focus on strategic compliance decisions.

Video resource: Legislative livestream—Understanding California’s latest wave of privacy bills

Impact on businesses

CCPA compliance affects various aspects of business operations. Companies under this law need to:

• Update privacy policies and website disclosures
• Modify data collection and storage practices
• Revise vendor contracts to ensure CCPA alignment
• Implement data mapping and data inventory processes

Transcend's Data Inventory solution can help simplify this process by automatically mapping your data flows and keeping your records current.

CCPA compliance, while complex, can lead to improved customer trust and more efficient data management practices.

Handling consumer requests

Efficiently managing consumer requests is one of the most challenging things to manage under CCPA compliance. Businesses must:

• Establish clear procedures for verifying consumer identities
• Respond to requests within 45 days
• Provide at least two methods for submitting requests (e.g., toll-free number, web form)

Consumer rights under CCPA include:

1. Right to know what personal information is collected
2. Right to delete personal information
3. Right to opt-out of the sale of personal information
4. Right to non-discrimination for exercising CCPA rights

Proper handling of these requests ensures compliance and maintains positive customer relationships.

Business obligations under the CCPA

The California Consumer Privacy Act (CCPA) imposes several key responsibilities on businesses to protect consumer data and privacy rights. These obligations cover data protection, privacy policy updates, and employee training.

Video resource: CCPA & CPRA–Business obligations

Data protection measures

Businesses must implement reasonable security procedures to safeguard personal information. This includes encrypting sensitive data, using secure networks, and limiting access to authorized personnel. Regular security audits are essential to identify and address vulnerabilities.

Companies should establish data retention policies that specify how long personal information is kept and when it should be deleted.

Implementing data minimization practices helps reduce the risk of unauthorized access or breaches.

It's also crucial to have incident response plans in place to quickly address any data breaches. This includes notifying affected consumers and relevant authorities within required timeframes.

Privacy policy updates

Businesses must revise their privacy policies to comply with CCPA requirements. These policies should clearly explain what personal information is collected, how it's used, and with whom it's shared.

The policy must inform consumers of their rights under the CCPA, including:

• Right to know what personal information is collected
• Right to delete personal information
• Right to opt-out of the sale of personal information
• Right to non-discrimination for exercising CCPA rights

Companies should review and update their privacy policies annually to ensure ongoing compliance.

Training and monitoring

Employee training is critical for CCPA compliance. Staff who handle consumer inquiries or manage personal information must understand CCPA requirements and the company's privacy practices.

Training should cover:

• Recognizing and responding to consumer rights requests
• Proper handling and protection of personal information
• Procedures for reporting potential data breaches

Businesses should implement monitoring systems to track compliance with CCPA requirements. This includes auditing data collection practices, verifying the effectiveness of opt-out mechanisms, and ensuring timely responses to consumer requests.

Regular assessments help identify areas for improvement and demonstrate ongoing commitment to privacy protection.

CCPA and data security

The California Consumer Privacy Act (CCPA) places significant emphasis on data security measures. It requires businesses to implement robust safeguards and establishes protocols for handling data breaches.

Data breach protocol

Under the CCPA, companies must act swiftly in the event of a data breach. They are required to notify affected California residents within 45 days of discovering the breach.

This notification must include details about the type of information compromised and steps consumers can take to protect themselves.

The CCPA has a limited private right of action—allowing consumers to sue businesses directly for certain types of data breaches. This right applies when non-encrypted or non-redacted personal information is exposed due to a company's failure to implement reasonable security procedures.

Statutory damages range from $100 to $750 per consumer per incident. Alternatively, consumers can seek actual damages if they exceed this amount.

Companies face potential civil penalties of up to $7,500 per intentional violation.

CCPA security standards

The CCPA mandates that businesses implement and maintain reasonable security procedures. These measures should be appropriate to the nature of the personal information collected and processed.

Key security standards include:

• Encryption of sensitive data
• Access controls and authentication measures
• Regular security assessments and audits
• Employee training on data protection practices

The CCPA doesn't specify exact technical requirements. Instead, it expects companies to follow industry best practices—allowing for flexibility as security technologies evolve.

Businesses must also conduct risk assessments to identify potential vulnerabilities in their data handling processes. They should document these assessments and the security measures implemented to address identified risks.

Enforcement of CCPA

The California Consumer Privacy Act (CCPA) is enforced through administrative actions and civil penalties. Two entities play key roles in upholding this law.

The role of the attorney general

The California Attorney General's office is responsible for enforcing the CCPA. It began sending notices of alleged noncompliance to companies on July 1, 2020, when CCPA enforcement officially started.

Companies have 30 days to address any violations after receiving a notice and the Attorney General can impose fines of up to $2,500 per violation or $7,500 for intentional violations.

The office has conducted investigative sweeps on a variety of business components, including:

• Loyalty programs
• Mobile applications
• Employee data
• Recognition of Global Privacy Control signals

California Privacy Protection Agency

The California Privacy Protection Agency (CPPA) is a new regulatory body created by the California Privacy Rights Act, which amended the CCPA. The CPPA's primary role is to enforce and implement CCPA provisions, with responsibilities that include:

1. Issuing regulations to strengthen consumer privacy
2. Conducting administrative enforcement actions
3. Promoting public awareness about consumer privacy risks and rights

The CPPA works alongside the Attorney General's office to ensure businesses comply with the CCPA. It has the authority to investigate potential violations and impose administrative fines.

The agency aims to protect Californians' privacy rights by overseeing businesses' data practices and responding to consumer complaints.

CCPA and sensitive personal information

The California Consumer Privacy Act (CCPA) provides enhanced protections for sensitive personal information. These provisions aim to safeguard particularly vulnerable data and give consumers greater control over its use.

Defining sensitive information

Under the CCPA, sensitive personal information includes data that could reveal intimate details about an individual's life. This encompasses:

• Social Security numbers
• Driver's license numbers
• Financial account information
• Precise geolocation data
• Race or ethnic origin
• Religious or philosophical beliefs
• Union membership
• Sexual orientation
• Health information
• Biometric data

Biometric information refers to unique physical characteristics like fingerprints, facial recognition data, or DNA. The CCPA recognizes the potential risks associated with misuse of this data.

Additional protections

The CCPA grants consumers specific rights regarding their sensitive personal information:

1. Right to limit use: Consumers can restrict businesses from using their sensitive data beyond what's necessary to provide requested services.
2. Opt-in requirement: Companies must obtain explicit consent before collecting or processing sensitive information.
3. Non-discrimination: Businesses cannot treat consumers differently for exercising their privacy rights related to sensitive data.
4. Stricter security measures: Organizations must implement robust safeguards to protect sensitive information from unauthorized access or breaches.

These protections aim to give Californians greater control over their most personal data and reduce the risk of misuse or exploitation.

Consumers' role in protecting privacy

California residents play a crucial part in safeguarding their personal information under the CCPA. Their active involvement through education and advocacy strengthens privacy rights and promotes responsible data practices.

Consumer privacy advocacy

Individuals can actively promote stronger privacy protections through various means:

1. Reporting violations: Alert authorities to businesses not complying with CCPA regulations
2. Participating in public forums: Share experiences and concerns about data practices
3. Supporting privacy-focused organizations: Join or contribute to groups advocating for consumer rights, like the Electronic Frontier Foundation and others.

Consumer privacy law awareness helps create a culture of accountability. By exercising their rights and holding businesses responsible, California residents encourage companies to adopt better data protection practices. This collective action reinforces the importance of privacy in the digital age.

Common CCPA compliance pitfalls to avoid

Request handling problems

The most frequent CCPA violations stem from incomplete or inefficient handling of consumer privacy requests. Companies often miss the crucial 45-day response window or create overly complex verification processes that frustrate users. Many businesses fail to properly document how they fulfilled requests or forget to check all their data systems during the process. This can lead to incomplete responses and potential violations.

Website and technical missteps

Many companies bury their "Do Not Sell My Personal Information" link in their footer where users struggle to find it. Another common issue is failing to honor Global Privacy Control signals, which is an area of enforcement focus for the California Attorney General's Office.

We also see businesses creating unnecessarily complex opt-out processes or maintaining broken request submission forms, making it difficult for consumers to exercise their rights.

Privacy notice shortcomings

Privacy notices often fall short by using vague language to describe data collection practices or missing required disclosures about data sales.

Companies frequently forget to update their notices when their practices change, leading to inaccurate disclosures. Instructions for submitting requests are often unclear, leaving consumers confused about how to exercise their rights.

Example of a vague, non-compliant privacy notice

"We collect information about our users to improve our services. We may share this information with partners and third parties. To exercise your privacy rights, contact us."

This notice falls short because it:

• Doesn't specify what information is collected
• Doesn't explain how information is used
• Doesn't identify types of third parties
• Lacks clear instructions for submitting requests
• Fails to mention specific CCPA rights

Example of a clear, CCPA-compliant privacy notice

"We collect the following categories of personal information:

• Contact details (name, email, phone number) when you create an account
• Device information (IP address, browser type) when you use our website
• Purchase history when you buy our products

We use this information to:

• Process your orders and provide customer support
• Send order updates and marketing communications
• Analyze website performance and improve our services

We share certain information with:

• Payment processors to handle transactions
• Analytics providers to understand website usage
• Marketing platforms to send emails

Under CCPA, you have the right to:

1. Know what personal information we collect and why
2. Request deletion of your personal information
3. Opt-out of the sale of your information
4. Receive equal service when exercising these rights

To exercise these rights:

• Visit privacy.ourcompany.com/requests (http://privacy.ourcompany.com/requests)
• Email privacy@ourcompany.com
• Call 1-800-PRIVACY

We will respond to your request within 45 days."

CCPA vs. CPRA: Key updates and new consumer rights

The California Privacy Rights Act (CPRA) expanded upon the CCPA, adding new consumer rights and business obligations, and creating the California Privacy Protection Agency, a dedicated enforcement body. The CPRA also introduced the concept of "sensitive personal information”—giving consumers more control over its use.

Key changes include:

• Extended right to delete
• Right to correct inaccurate personal information
• Expanded opt-out rights for data sharing
• Increased penalties for violations involving children's data

Businesses must update their privacy policies and data handling practices to comply with these new requirements.

Resource: CPRA Compliance Checklist

Comparing CCPA and CPRA

The California Privacy Rights Act (CPRA), which amended the California Consumer Privacy Act (CCPA), introduced several important changes and new rights for consumers. Here’s a breakdown of the key updates:

New consumer rights under CPRA

1. Right to correct: Consumers can now request corrections to inaccuracies in their personal data held by businesses.
2. Right to limit sensitive personal information: Consumers can request that businesses limit the use of their sensitive data to only what’s necessary to provide the goods or services they expect.
3. Right to access and opt-out of automated decision-making: Consumers have the right to understand the logic behind automated decision-making processes and to opt-out of profiling related to sensitive areas like health, behavior, or economic situation.
4. Right to data portability: Consumers can request their data be transmitted to another business, enhancing their control over how their data is used.

Expanded rights under CPRA

1. Right to know: The CPRA expands the CCPA’s "right to know" by allowing consumers to request not only the personal information collected but also data shared by the business. The window for making these requests extends beyond the typical 12-month period, provided the data was collected after January 1, 2022.
2. Right to opt-out: Consumers can opt-out of both the sale and sharing of their data, with "sharing" now defined broadly to include data exchanges for cross-context behavioral advertising, even if no money is involved.
3. Right to delete: The CPRA strengthened the right to delete by requiring businesses to pass on data deletion requests to third parties with whom they’ve shared or sold consumer data.
4. Opt-in for minors: The CPRA enhanced the CCPA’s requirement for minors, stipulating that businesses must wait 12 months before requesting consent again if a minor opts out of data sharing or sale.

Related resource: CPRA vs CCPA—Unpacking the Differences

Developing privacy trends

As more U.S. states pass comprehensive privacy laws (with eight more coming into effect in 2025 alone) there is a clear and significant trend towards stronger data protection measures across the country. Emerging privacy trends include:

• Increased focus on children's online privacy
• Stricter regulations for biometric data collection and use
• Greater emphasis on data minimization and purpose limitation
• Enhanced transparency requirements for AI and automated decision-making

As technology advances, privacy laws will likely continue to adapt, balancing innovation with consumer protection. Businesses should stay informed about these developments to ensure compliance and maintain consumer trust.

Frequently asked questions

The California Consumer Privacy Act (CCPA) establishes key regulations for businesses handling personal information of California residents. It outlines compliance requirements, protected data types, and potential penalties for violations.

What are the main regulations of CCPA?

The CCPA grants California residents several privacy rights. These include the right to know what personal information is collected about them and how it's used. Consumers can request deletion of their data and opt out of its sale.

Businesses must provide clear notices about data collection practices. They are required to respond to consumer requests within specific timeframes.

How does one achieve compliance with CCPA?

To comply with CCPA, businesses should conduct data audits and update privacy policies. Implementing processes for handling consumer requests is crucial.

Employee training on CCPA requirements is important, too. Companies need to establish secure data storage and transmission methods.

Regular reviews of data practices help maintain compliance. Documenting CCPA-related actions and decisions is also advisable.

Which types of personal information does CCPA protect?

CCPA protects a wide range of personal information. This includes identifiers like names, addresses, and Social Security numbers.

Internet activity data, such as browsing history and search information, is covered. Geolocation data, biometric information, and professional or employment-related information are also protected.

How does CCPA differ from GDPR in terms of data privacy?

CCPA and GDPR have different geographical scopes. CCPA applies to California residents, while GDPR covers individuals in the European Union.

The laws differ in their definition of personal data. GDPR's definition is broader, including more types of information.

CCPA focuses on the sale of personal data, whereas GDPR regulates data processing more broadly. Consent requirements and penalties for violations also vary between the two regulations.

What are the consequences of a CCPA violation?

CCPA violations can result in significant penalties. Businesses may face fines of up to $7,500 per intentional violation.

Consumers have the right to sue companies for certain data breaches. This can lead to costly class action lawsuits.

Reputational damage from CCPA violations can harm customer trust and business relationships.

Who is required to adhere to the CCPA legislation?

The CCPA applies to for-profit businesses that collect personal information from California residents. Companies must meet at least one of the following criteria:

1. Annual gross revenues exceeding $25 million.
2. Buying, receiving, or selling personal information of 50,000 or more consumers, households, or devices.
3. Deriving 50% or more of annual revenue from selling consumers' personal information.

Certain types of businesses, including some startups, may need to comply as they grow.

About Transcend

Transcend is the next-generation platform for privacy and data governance. We make it simple for companies to handle CCPA requirements by encoding privacy at the code layer, reducing manual work and human error throughout the compliance process.

From automated privacy request handling with DSR Automation, to keeping track of your data flows with Data Inventory and Silo Discovery, to managing cookie consent across your digital properties with Consent Management, Transcend has you covered as you work to meet CCPA requirements and prepare for future privacy regulations.