Sweeping New Privacy Bill in California Could Replace Ballot Initiative

Two key lawmakers in the California State Legislature have introduced new privacy legislation that is intended to supplant a broad privacy ballot initiative that has been proposed for the November election.  Assembly Member Ed Chau and Senator Bob Hertzberg yesterday released an amended version of AB375, which is pending on the Senate Calendar.  According to press reports, the chief proponent of the ballot initiative, Alastair McTaggart, has agreed to withdraw his proposal if the new Chau/Hertzberg legislation is passed by the legislature and signed by Governor Jerry Brown by June 28, the deadline for withdrawing the initiative.

The new version of AB375 would establish broad new privacy rules for the collection and use of data in both the online and offline world:

  • Consumers would have the right to demand companies provide all of the information that has been collected about them as well as the right to demand the deletion of that information.
  • Consumers would have the right to opt out of the sharing of any personal information about them to another company.       
  • The proposal has a very broad definition of “personal information” that includes web browsing and app history, biometric information, geolocation data and much more.
  • Companies who experience a data breach would be subject to statutory damages of up to $750 per consumer per incident or actual damages, whichever is greater.  Companies would have 30 days to rectify a breach once notified before a suit could be brought against them.    

The new rules would apply to companies with annual gross revenues in excess of $25 million; personal information about 50,000 or more consumers; or which receive 50% or more of their annual revenues from selling consumers’ personal information.  This is even more expansive than the privacy ballot initiative in regard to coverage.

We are working closely with our members and other industry groups to evaluate this new proposal.  The new Chau/Hertzberg legislation has provisions that are an improvement over the proposed ballot initiative, but we still have concerns.  Action on this new bill is likely to be on a highly accelerated track.