We have discussed the California Consumer Privacy Act (CCPA) in past blog posts. This law has brought monumental changes to how companies manage their consumers’ information as of January 1, 2020. Many business owners across California share two primary concerns about this new law. Here is a brief overview of those main concerns.

  1. THE ECONOMIC IMPACT OF COMPLYING WITH THE LAW WILL BE HIGH

As we have discussed before, many business owners are particularly concerned about what it might cost them to comply with the CCPA. To comply, businesses will generally have to:

  • Adjust their privacy policies regarding consumer information;
  • Change how they process and store personal data; and
  • Stop selling consumer data, which impacts how many businesses operate.

Making these changes will likely be expensive. And the estimated costs released in October 2019 did not necessarily ease business owners’ worries. The California Department of Finances estimates that complying with the law could cost more than a total of $55 billion. And that is only calculating the initial costs. Individual businesses can expect an average cost of $200 million or more to comply, depending on their circumstances.

  1. THE RISK OF LITIGATION BUSINESSES FACE COULD INCREASE

Business owners understand the risk of litigation they face, and there are strategies to reduce those risks.

However, the CCPA is new territory for businesses and consumers alike. According to Bloomberg Law, this could significantly increase the risk of litigation and lawsuits businesses face. There are a few reasons for this, including:

  • Consumers have a private right of action they can take if companies violate the CCPA;
  • The CCPA does not yet include a strict burden of proof, like California’s current data breach laws do; and
  • Since the law will be so new, courts are not yet sure what can and cannot be litigated.

If consumers take legal action against companies for violating the CCPA, they can sue for $750 per incident. This might not seem too significant, but those costs can quickly add up.

These two concerns are valid. And it might be beneficial for business owners to consult an experienced attorney and take action to protect their business and minimize risks, to prepare for when the CCPA does go into effect.