California Privacy Rights Act (CPRA): The challenges with compliance and how to overcome them

California Privacy Rights Act (CPRA): How to overcome compliance challenges

The California Privacy Rights Act (CPRA) is a significant piece of legislation that enhances consumer data privacy protections in California. Building upon the California Consumer Privacy Act (CCPA), the CPRA introduces new rights for consumers and imposes stricter obligations on businesses.

As businesses transition from CCPA to CPRA, those that have already aligned their data processing operations with CCPA privacy requirements may face less friction. However, a critical question persists: Is every businesses that is compliant with the CCPA also compliant with the requirements of the CPRA?

Unfortunately, the answer is a resounding "no." This is because most businesses face some common challenges while trying to adapt to the enhanced measures of the CPRA.

What challenges do businesses face while adopting CPRA regulations?

There are several impediments to adopting CPRA that businesses face if they've suddenly found that the CPRA is applicable to them. This section covers common challenges that businesses face while adopting the CPRA.

Businesses find it hard to identify scattered data

Businesses struggle with data awareness. The CPRA upholds the CCPA's "personal information" definition and adds a new category called "sensitive personal information." As a subset of "personal information," "sensitive personal information" requires stricter controls. To meet these standards, companies must know what data they have, where it is, and how it's used. With data spread across various systems and services, a strong data discovery framework is vital. This involves identifying and cataloging all data, tagging it with metadata, and creating a single source of truth for better cross-departmental collaboration.

Businesses must ensure that third parties handle data securely

Businesses must ensure third parties handle personal information per CPRA Section 1798.100(d)(3). Thorough due diligence is required to avoid compliance issues, and failing to enforce contracts or audit rights can lead to legal risks. Many companies are now focusing on vendor risk management, aligning with global privacy laws like the General Data Protection Regulation (GDPR). Streamlining assessments involves using tailored templates and automation to reduce assessment time.

Inadequate data protection measures

The CPRA mandates businesses to implement reasonable security procedures for personal information. To address this, businesses need to gain comprehensive visibility into data access across various systems and implement effective governance controls. Techniques such as field-level encryption, data pseudonymization, and data masking can enhance data security, enabling safe data sharing across departments and jurisdictions.

Employees can be a weak link when it comes to compliance

Achieving CPRA compliance requires collaboration across all departments, not just legal or compliance teams. Businesses must focus on providing proper privacy training programs. CPRA Section 1798.130(6) mandates that all personnel handling consumer inquiries must understand consumer data rights. Training should cover data processing responsibilities and consumer rights to ensure compliance and improve privacy practices overall.

How to comply with CPRA

Here's how you can kick-start CPRA compliance for your business in seven steps.

1. Determine if the CPRA is applicable to you

Before diving into compliance measures, businesses must confirm whether they are subject to the CPRA. This law applies to for-profit entities operating in California that collect personal data from Californians and meet at least one of the following criteria:

• Annual revenue: Gross revenue exceeds $25 million.
• Data volume: Buys, sells, or shares personal information belonging to at least 100,000 California households or consumers.
• Revenue from data transactions: More than 50% of annual revenue is derived from selling or sharing consumers’ personal information.

2. Plan your data collection so that your business only collects relevant data

The CPRA requires data minimization. Businesses must only collect data that is necessary and proportionate for their processing purposes. This principle, which was not part of the earlier CCPA, aligns with the EU's GDPR and is critical for consumer data protection.

Businesses must recognize that the California Attorney General has the authority to enforce this principle and impose fines for violations.

3. Design data flow maps to track where data is on the network

Businesses with complex IT networks often struggle with compliance due to a lack of understanding about how personal data flows within their systems. Mapping data flows is essential for compliance, enabling organizations to track the origin, storage, processing, and access points of personal information.

By creating a comprehensive data flow map, businesses can identify compliance risks such as insecure data transfers or unauthorized access. This proactive approach allows organizations to implement appropriate safeguards to mitigate these risks effectively.

4. Invest in tools that safeguard the data you have collected

Considering the current cybersecurity threat landscape, implementing technical safeguards is imperative for compliance. Leveraging compliance automation tools can help reduce the reliance on manual interventions for data security in order to meet compliance needs. Organizations should consider the following measures:

• Develop a detailed information security policy.
• Use cybersecurity frameworks like NIST CSF to establish necessary security measures.
• Encrypt data both in transit and at rest.
• Employ data loss prevention solutions to monitor and block unauthorized data transfers.

5. Determine how long your business will retain data according to the law

Another significant change under the CPRA involves data retention policies. Organizations must justify and disclose how long they retain personal data, ensuring that data is not held indefinitely. Although there is no specific time limit, businesses must retain data only for as long as necessary to fulfill the purposes for which it was collected.

This requirement includes the obligation to inform consumers of the data retention policy at the time of data collection.

6. Update all consumer privacy rights on your website

To comply with the CPRA, businesses need to refresh their website content to inform consumers of their rights and data processing activities. Key updates should include:

• Privacy policy: Include information about consumer rights to correct inaccuracies, limit processing of sensitive personal information, and data portability.
• Opt-out option: Provide a clear “Do Not Sell or Share” option, allowing consumers to opt out of the sale or sharing of their personal data.
• Disclosure of sensitive data: Clearly state the categories of sensitive personal information collected by the business.

7. Establish a process that easily handles consumer requests for access to their data

Businesses must establish a structured process for managing consumer requests related to their rights under the CPRA. This includes properly handling deletion requests by not only deleting information from internal systems but also instructing third parties to do the same.

Utilizing technology to track response deadlines and manage tasks associated with various requests can streamline this process.

The above seven steps will set you on the right path if you're just getting started with the CPRA.

How to stay compliant with the CPRA

If you've already adhering to the CPRA, you may want to take a quick look at whether these other crucial aspects are covered so that you always stay compliant.

1. Providing employee training on CPRA requirements

Creating a culture of compliance is crucial for businesses to avoid data breaches and compliance violations. This involves training employees on the main elements of the CPRA. Staff members responsible for handling consumer requests should receive specialized training on data subject rights and data hygiene.

Consider engaging external data privacy experts to deliver effective training sessions.

2. Reviewing third-party contracts

The CPRA’s contractual requirements extend to data shared with service providers and contractors. Businesses must review and update these contracts to ensure they include provisions that restrict third parties from using data for unauthorized purposes while maintaining compliance with CPRA standards.

3. Conducting periodic audits and risk assessments

Regular cybersecurity audits are vital for identifying gaps in protection and assessing compliance with CPRA. Engaging third-party auditors can provide an unbiased evaluation of current policies and procedures.

In addition, businesses should conduct internal risk assessments more frequently to identify potential privacy risks. Both audits and assessments are mandatory for organizations whose data processing activities pose significant risks to consumer privacy or security.

By following this CPRA compliance checklist, businesses can take essential steps to protect consumer data, avoid penalties, and build trust with their customers.