What California's new data privacy law means for marketers

A new and uncertain era of obligations for data marketers is beginning on the West Coast.

Last Thursday, California Governor Jerry Brown signed the California Consumer Privacy Act of 2018. The new law aims to give consumers more control over their personal data, imposes limitations on how data can be shared with third parties, and forewarns harsh penalties for organizations that don’t comply.  

The sweeping and complex law, which will take effect in 2020, will affect any local, national, or international company that deals in or manages consumer data for marketing purposes in California -- in effect, everyone.   

For marketers, this development ushers in an era of rules and obligations.  

First, organizations will have to learn a new and dense rulebook regarding the use of consumer data. Marketers, PR firms, lawyers, government affairs officials, lobbyists, compliance, and operations will need to understand obscure, detailed facets of the 10,660-word law. For example, though companies must obtain express consent before selling certain data, companies can "share" data with fewer restrictions. What constitutes "sharing" vs. "selling" will be debated and scrutinized for the next 18 months. One certainty: it will be complicated.

Second, marketers will need to create highly sophisticated, compliant inducements to collect and use data. Under the new law, marketers are permitted to offer "financial incentives" in exchange for consumer permission to collect and use data. Creating rewards that pay for long-term commitment could come at a cost to the bottom line. In the absence of consumer-specific data, the role of influencers and engaged social media communities in disseminating messages will take on an even greater importance. Appealing to followers through organic and authentic avenues such as online publicity, digital events, and email marketing will become more important.

Finally, the passage of the act is only the first chapter in a volume of future legislation and regulations. Like the mythological Greek serpentine water monster Hydra, for every amendment or regulation created to resolve a question, two more will regrow. The law implemented in 2020 may look considerably different than the one signed into law last week. Marketers will need to monitor and conform to amendments to the law which may include relaxed or more stringent regulations.

Interestingly, it could have been even more restrictive. A ballot initiative was to go before California voters in November unless legislators acted. Fearful of a law they did not create, lawmakers moved quickly to create and pass the legislation. The bill whisked through the legislature in less than a week. At the law’s signing, one of the authors proclaimed, "California Legislature made history by passing the most comprehensive privacy law in the country." To be praised or criticized, only time will tell. In the meantime, marketers will need to prepare for a new reality.

Patrick George is a managing director at KP Public Affairs in Sacramento, California.

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