There’s no doubt that the EU General Data Protection Regulation (GDPR), which took effect in May of 2018, set into motion a growing awareness of how companies around the world handle consumer privacy data.
GDPR set the stage for the introduction of global data privacy regulations as evidenced by the California Consumer Privacy Act (CCPA) that was signed into law on the heels of GDPR and went into effect on January 1, 2020. And already, CCPA protections will soon be expanded when it’s superseded on January 1, 2023 by the recently approved California Privacy Rights Act (CPRA).
The first law of its kind in the United States, CCPA/CPRA is often equated to GDPR. But while GDPR and CCPA compliance both aim to give consumers control over how their personal information is collected, used, and shared, there are several differences between these two regulations that impact who is affected, what companies need to do to comply, and the risks associated with noncompliance of data privacy laws.
Who and what information is protected by data privacy laws?
The CCPA/CPRA data privacy law was established specifically to protect the rights of California residents, which the law defines as “a natural person who is a California resident” living in the state for any reason other than temporary or transitory purposes, as well as anyone living outside of the state who is considered a legal California resident. The law is aimed at consumers of household goods and services, employees, and anyone involved in business-to-business transactions. In contrast, GDPR states that it protects ANY living identified or identifiable natural person, and that person does not need to be considered a resident of the EU or located within the EU. This is a much broader scope aimed more at companies offering goods and services in the EU rather than those only doing business with EU citizens.
CCPA/CPRA and GDPR both have broad definitions as to what constitutes personal data, which includes any information that can identify a consumer such as name, IP address, email, social security number, online cookie identifiers, etc. While similar in scope, CCPA/CPRA is more specific in clarifying the various categories of personal information and also clearly states that it includes anything that can be linked to a household as well as a consumer. GDPR does not specifically address households, but enforcement under GDPR’s governing authority has shown the law to include households since in reality, any personal information that can identify a household can also identify a consumer.
Who has to comply with data protection laws such as the CCPA vs GDPR?
According to CCPA/CPRA, any for-profit entity doing business in California that meets any one of the following thresholds is required to comply with the consumer privacy act if they intend to collect personal information:
- Annual gross revenue in excess of $25 million
- Buying, receiving or selling personal information of more than 50,000 consumers or households (expanded to 100,000 under CPRA come 2023)
- Earning more than half of your annual revenue from selling personal information
Under this definition, your business does not need to be physically located in California, or even in the U.S. for that matter to comply with these data protection laws. The revenue threshold of $25 million also applies to ALL revenue, not just revenue attributed to California residents. Additionally, the definition of “selling personal information” is not confined to the classic sense of the word but rather includes disseminating or disclosing information in any way across websites, apps, web networks, and more (click here for more on what constitutes a sale under CCPA/CPRA).
Unlike CCPA/CPRA, GDPR does not define specific policy thresholds but applies to ALL companies that offer goods or services in the EU, or that monitors the behavior of persons in the EU, irrespective of the company’s location. This essentially means that even if your company has minimal presence in the region with no established EU location, if you do any business in the EU, you need to comply with the general data protection laws. And don’t assume that you’re safe just because you aren’t selling into EU markets—if your website is accessible from the EU, you may be collecting data about Europeans, even if you never receive a single euro from those digital visitors.
What type of rights do you need to provide?
Under the right to be informed, CCPA/CPRA and GDPR both require businesses to provide information in advance about the personal data it collects and how it will be used via a privacy notice. Both regulations also establish the right of access, allowing consumers to know what personal information an organization holds and allowing consumers the right to submit data subject requests. Right of access also requires you to provide the means for consumers to request access, disclose all categories of personal data and deliver the information to the consumer. There are some differences on the timing of information requests when comparing the GDPR vs CCPA—the right to access under CCPA/CPRA applies only to information collected in the 12 months prior to the request with a deadline of 45 days to respond, while GDPR applies to all information with one month to respond. Both regulations do allow for extensions with notice.
CCPA/CPRA and GDPR opt-out rights are similar in their overriding objective, but there is a substantial difference between each data protection regulation. CCPA/CPRA requires the right to opt out of the sale of personal information to third parties and requires a clear and conspicuous “Do Not Sell My Personal Information” link on a website’s homepage. GDPR isn’t quite as absolute, providing consumers with the right to opt-out of “processing data for marketing purposes” and withdraw consent to process personal data, as well as giving businesses an exception if they can demonstrate compelling legitimate grounds of collecting personal data.
While both privacy regulations also give consumers the right to have their personal information deleted, one key difference is that GDPR also gives consumers the right to request that an organization corrects any inaccurate or incomplete personal information. CCPA/CPRA does not cover any rights of personal data rectification.
How do you ensure security of privacy data and personal information?
CCPA/CPRA and GDPR are similar in that businesses need to ensure an appropriate level of security for privacy information, but while GDPR requires technical and organizational measures to comply (i.e., encryption), CCPA/CPRA shifts this requirement more to consumer rights. Under CCPA/CPRA, consumers have a right to action for unauthorized access and exfiltration, theft, or disclosure of personal information as a result of a business’s inability to maintain appropriate security measures. To stay compliant with the CCPA and GDPR data privacy standards, you will need to maintain secure websites and protect consumers’ personal data.
What are the risks of noncompliance with the CCPA and GDPR?
Penalties for noncompliance of CCPA/CPRA and GDPR both aim to hit where it hurts—your bottom line. Depending on the severity of the violation, GDPR fines can be up to 4% of annual global revenue or 20 million euros ($24 million USD), whichever is higher. CCPA/CPRA places their penalty fee on individual policy violations—$2500 per violation, with $7500 per violation for those concerning minors personal data.
CCPA/CPRA has no ceiling on the number of privacy violations, so depending on your annual revenue, penalties can add up beyond those of GDPR. An online retailer doing business with a million Californians could quickly find themselves faced with $2.5 billion USD in fines if a data breach or other policy violation hits the company’s entire data set of customers.
Meeting your obligations under both GDPR and CCPA/CPRA can seem daunting—especially given the differences between the two and the seemingly ever-changing rules. Get in touch today to learn how Ketch can help make your company fully GDPR and CCPA/CPRA compliant.