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California Privacy Law Architect Plots Tougher Tech Rules (1)

Sept. 25, 2019, 12:00 AM; Updated: Sept. 25, 2019, 7:09 PM

Real estate developer Alastair Mactaggart announced a new California privacy ballot measure, two years after jump-starting a similar push that led to tough new limits on the data-collection activities of Google, Facebook Inc. and other internet companies.

The latest initiative would tighten rules on sensitive personal data, expand transparency requirements for elections and automated decision-making, and create a new regulator, according to a draft document outlining his plans.

Mactaggart sees the new measure as a rebuke to big tech companies that have been trying to water down consumer protections in the California Consumer Privacy Act, which is slated to kick in Jan. 1. Giants including Google and Walmart Inc. are also lobbying Congress to create a uniform, and likely weaker, federal standard that would supersede the California law.

”The California legislature got close, but there were some parts that just didn’t coalesce,” said Mactaggart. “I’ve been respectful of the process, but along the way I’ve come to realize that there is increased need for further data protection.”

He plans to submit the draft initiative on Sept. 25, starting a 35-day clock to finalize the language. He’ll have until early May to collect about 1.05 million signatures to get it on California’s November 2020 ballot. If approved, the initiative would amend and augment the CCPA, not replace the law. A majority vote of the state legislature would also be needed to approve any amendments.

The possibility of California voters enacting even tougher digital privacy rules may put more pressure on Congress, where work on federal privacy legislation has stalled.

If the new proposal gains steam, it could cause issues for thousands of companies trying to comply with the CCPA in its current form. Lawyers and trade groups representing many of these businesses have called out the California legislature and Mactaggart for not giving them enough time to comply with the new standards.

Here are some highlights from his latest initiative:

  • New rights for California consumers around the use and sale of sensitive personal information, such as health and financial information, racial or ethnic origin, and precise geolocation.
  • More disclosure requirements for automated decision-making and profiling by companies, so consumers know when their information is used to make “adverse” decisions on important issues including employment, housing, credit, and politics.
  • Require corporations to disclose whether, and how, they use personal information to influence elections.
  • Create a new privacy agency to oversee rule-making and enforcement of CCPA, removing that responsibility from the California Attorney General Xavier Becerra. Becerra is expected to release proposed rules clarifying the CCPA in October.

“The more a company knows about you, the more power it has to shape your daily life,“ Mactaggart said. “That power is exercised on the spectrum ranging from the benign, such as showing you a shoe ad, to the consequential, like selecting your job, your housing, or helping to shape what candidate you support in an election.”

“Going forward, there will be a data curtain of sorts, separating countries where citizens have rights to stop the constant commercial surveillance that is underway today, and countries where everyone is watched, all the time, for various purposes that are out of a person’s control,” he added.

The current law lets consumers opt out of the sale of their personal information by a business, and requires companies to delete that data when people ask. It also prohibits a business from selling the personal information of a consumer under 16 years of age, unless affirmatively authorized. Industry groups, including the Association of National Advertisers, are pushing Becerra to clarify what they say are ambiguities in the law.

Bloomberg L.P. All rights reserved. Used with permission.

(Updates with details of proposal and comment from Mactaggart.)

To contact the reporters on this story: Daniel Stoller in Arlington, Va., at dstoller1@bloomberg.net; Kartikay Mehrotra in San Francisco at kmehrotra2@bloomberg.net; Ben Brody in Washington, D.C., at btenerellabr@bloomberg.net

To contact the editors responsible for this story: Sara Forden at sforden@bloomberg.net; Alistair Barr, Jillian Ward

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