Proposition 24, an amendment to consumer privacy laws, was approved by California voters with a significant margin of 56.2% for and 43.8% against in the recent election.
But some advocacy organizations are concerned the passage could lead to increased frivolous lawsuits and unintended burdens on small- to medium-sized businesses.
Proposition 24 bolsters the California Consumer Privacy Agency (CCPA), giving it power to enforce expanded consumer privacy protections at an increased annual fiscal cost of $10 million, with a portion of that cost expected to be offset by increased fines against businesses, the State's official voter guide reported.
The guide also states that the law "permits consumers to: prevent businesses from sharing personal information, correct inaccurate personal information, and limit businesses' use of 'sensitive personal information,' including precise geolocation, race, ethnicity, and health information."
Victor Gomez, Citizens Against Lawsuit Abuse executive director, told the Southern California Record that some of their concerns hinge on how fines will be handled under the changed law. While the California Consumer Privacy Act had already permitted fines between $2,500 and $7,500 for violations, it also provided businesses up to 30 days to remedy the situation without being fined.
"Unfortunately, Proposition 24 will now eliminate the ability of businesses to cure a violation and avoid fines, stripping away the rights of small businesses the opportunity to learn, and correct the violation," Gomez told the Record.
Gomez also expressed concern over whether the CCPA may only make things worse by adding a layer of bureaucracy, as the new agency will not only have the power to enforce but to make new rules as well. Previously, privacy protection had been handled by the California Office of the Attorney General.
"Affected companies that collect, buy, sell or share consumer data would be saddled with the ongoing costs of demonstrating and reporting their compliance with ever-evolving regulation," Gomez told the Record. "This may not bother large businesses and corporations, but those that will suffer the most will continue to be our small- to medium-sized businesses who tend to be minority-owned."