Ambiguity Around CCPA Will Lead to a Slow Start in 2020

California's governor, Gavin Newsom, had a busy 2019 as he reviewed a total of 1,042 different bills. Newsom ended up signing 870 of those bills into law, with most going into effect on January 1, 2020. Of those 870, one of the most discussed is the California Consumer Privacy Act (CCPA), which had five amendments signed by Newsom earlier in October.

When CCPA goes into effect on January 1, California residents will have the right to know the data that organizations are collecting about them, the right to tell companies not to share or sell their personally identifiable information (PII), and the right to protection against corporations that fail to keep their PII secure. As with the European Union's GDPR, we will eventually see major fines and lawsuits dealt to companies that fail to abide by CCPA. However, there is still an aura of ambiguity around the regulation as well as confusion among California legislators — this will ultimately cause a slow start to enforcement in early 2020.

The fact that several different associations have already suggested alterations to the original version of CCPA (which was passed in 2018) suggests that legislators may not be prepared to adequately and consistently enforce the new law. Additionally, a number of organizations will undoubtedly be confused about the specific requirements of the act, meaning that they won't be compliant by January 1. For the most part, small and medium-sized businesses (SMBs) are going to make up the majority of noncompliant organizations. This is because they lack the resources that large corporations can use to ensure proper security and compliance.

As a result of this ambiguity, California will likely wait an extended period of time before it issues its first major fine under the regulation. Similarly, even though GDPR was enacted in May 2018, it was nearly a year after a September 2018 breach before British Airways was fined $250 million for violating the EU privacy act in July 2019.Once the lull period that will follow the initial establishment of CCPA concludes, we can expect a greater volume of penalties dealt to organizations that fail to adhere to the law's requirements.

CCPA poses a challenge to businesses of all sizes as they seek to retain competitive edges in their respective California markets. However, the Golden State's data privacy act also represents an opportunity for companies to obtain consumer trust and increase their market share as they adhere to the law and prioritize consumer privacy. For example, Microsoft announced last month that it will be honoring CCPA throughout the US and not just within California. By prioritizing security and customer privacy, the multinational technology company will cement customer loyalty in the Microsoft brand.

For that reason, businesses should not delay the process of transforming their security and privacy strategies to conform to CCPA. Failing to adhere to CCPA will not just result in large fines for companies, but it can also significantly damage customer trust. To adhere to (and benefit from) the enactment of CCPA, organizations should take a page out of Microsoft's playbook and make the protection of consumer data a priority by implementing proactive cybersecurity strategies and maintaining transparency around how they handle and protect data. Bottom line: Complying with CCPA and continually reevaluating cybersecurity measures and strategies are critical steps for any organization that wants to succeed.

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