Top CCPA Fines for Non-Compliance: Key Cases and How to Avoid Penalties

Did you know that a single misstep in handling consumer data could cost your business millions under the CCPA?

On November 28, 2019, the state of California passed the California Consumer Privacy Act (CCPA). This legislation was to strengthen the protection of consumer data.

The enactment gives individual residents the right to control specific types of their personal data:

1. How they are going to make use of the data
2. Whether they are going to sell it out to any third parties.

Companies have the responsibility to inform their customers about their potential entitlements. They need to explain the data collected and the purpose of such collection sufficiently.

The CCPA is an example to other countries, increasing the trust of consumers towards businesses. They contribute to the high ethics of businesses in the area of data protection.

It enhances the brand’s credibility and establishes the level of the company’s respect for order and privacy.

For most small businesses, these CCPA fines are of no great concern. They do not have to abide by stringent industry standards.

What is CCPA? 

The California Consumer Privacy Act is a statewide data privacy law signed into effect in California to enforce higher privacy rights and consumer protection for its residents.

It was enacted in 2018 and came into effect on January 1, 2020, increasing control over personal data by California residents and setting specific obligations for businesses regarding the data.

Main Determinants of the CCPA

The CCPA demands that businesses respond to requests within a reasonable amount of time. If they don’t, then they will be liable for hefty CCPA fines. The laws outlined below bind California residents:

1. Right to Know

Consumers are entitled to be notified about the kinds of personal information being collected. The sources of the information, such as:

• The reason for the collection of such information.
• The identity of any third party to whom such information is expected

This source should be provided or sold to avoid fines under CCPA.

2. Right to Correct

Consumers are permitted to have inaccuracies in personal data relevant to them corrected upon their request without incurring additional charges.

3. Right to Delete

While there are limited circumstances in which information must be retained for legal compliance reasons. For internal use, consumers are entitled to request the erasure of their personal information from business records.

4. Right to opt-out

The law grants consumers a right above the rest to opt out of the sale or share their personal data. If the consumer opts out of availability, businesses also do not sell/share his/her personal data. They will have to pay fines under CCPA. For this purpose, they can also apply universal equivalent opt-out signals.

5. Right to limit

As for the plans, CCPA has no opt-in system in regard to the use of sensitive data. Rather, this gives consumers the right to limit the use and disclosure of sensitive data to a reasonable extent.

6. Right to non-discrimination

In California, CCPA protects individual consumers from any type of discrimination. This includes denial of being offered products/services, elevation in the price, and decline in quality.

Who is Required to Comply with the CCPA?

The Californian privacy law strikes to focus CCPA fines on those for-profit establishments that fulfill the following conditions:

• The business has a gross turnover of more than $25 million in a year.
• The business engages in purchasing/selling/sharing the P.I of over 100,000 individuals
• The business generates a substantial amount of its revenue (over 50%) from the selling of finances pertaining to consumers.

It is the most recent amendment of CCPA that modified the limit to S138 A. It has been elevated from 50,000 to 100,000 people for the buy/sell/share of personal information.

The provisions of the statute of CCPA, however, do not extend to non-profit groups and public sector authorities.

CCPA Non-Compliance Penalties

The law regulating the enforcement of the CCPA is the California Attorney General and the California Privacy Protection Agency (CPPA).

The civil CCPA fines range from $2500 to $7500 for each violation. Compared to the General Data Protection Regulation’s (GDPR) sanction, this figure may appear to be low. Although it could easily range from thousands to millions, depending upon the number of people violated.

Furthermore, the California statute also gives consumers a limited private right of action. They may bring an action against businesses for such acts as the release of data that has been encrypted. Court award damages ranging from $100 to $750 per person per incident or based on the actual harm suffered.

A restraining order or declaratory judgment, such further relief that the court may deem appropriate

The enforcement agency may now have the ability to decide how long the cure period to offer possible offenders. A 30-day cure period was the standard before the CPPA.

Role of the California Privacy Protection Agency (CPPA)

The CPPA was established in July 2020. This was after the passing of Proposition 24, which was responsible for the California Privacy Rights Act in 2020. 

It is made up of a 5 board members that are responsible in the regulation, monitoring of the profitability of business that uses or trade California residents data.

Any person who is of the opinion that his or her privacy rights have been infringement may file a complaint with the CPPA. 

The CPPA, however, does not aggregate and promote the interests of the consumers, nor does it offer to represent consumers in legal actions as their lawyers. 

Instead, it gets such complaints, with some conditions requiring that the complaint must concern a breach of the California Privacy Rights Act only for the purposes of enforcing legislation against the violators.

Specific tasks of the CPPA include

• Public Education: Promoting awareness about privacy rights, responsibilities, and risks.
• Advice: Providing guidance to establishments and consumers about issues regarding privacy, cybersecurity, and automated decision-making.
• Enforcing the Delete Act: Making sure data brokers exhibit compliance with additional privacy requirements.
• Rule Development: CPPA, via rulemaking processes done under the Administrative Procedures Act, has the authority to create and amend regulations. 

Top CCPA Fines for Non-Compliance with Real Cases

The following are five examples from real life of companies penalized under privacy laws such as the CPRA and CCPA for violations similar to those present in the examples you provided:

Sephora – Unauthorized Sale of Personal Data

Make-up brand Sephora CCPA fine amounts to $1.2 million for not informing users about the sale of their personal information to third parties like ad companies and analytics. They used third-party tracking, making their actions fit into selling under CCPA. Also, did not follow commands by Global Privacy Control to prevent such sales.

Key Takeaway: Data transparency and compliance with data sales disclosures and opt-out mechanisms have to be ensured by the enterprises.

CVS Health – Not Supporting Consumer Rights Requests

CVS Health was taken to task for privacy violations, as consumers complained of problems faced while trying to access and delete their personal information. Failure to put in an adequate response to data subject requests is an infringement of consumer rights under CCPA.

Key Takeaway: There ought to exist a concrete mechanism for the companies to work on the management of requests by customers with ease. 

T-Mobile – Major Data Breach

Offense: T-Mobile became notorious when a data breach in 2021 exposed sensitive data of more than 40 million consumers, such as Social Security and driver’s license numbers. T-Mobile agreed to pay a $350 million settlement as a CCPA breach fine, citing failure to enforce adequate security measures and timely breach notifications for customers.

Key takeaway: Protecting sensitive data with robust encryption and acting quickly in case of a breach is of paramount importance.

4. Home Depot – Inadequate Privacy Policy Update

Offense: Home Depot’s dermal-freeze got into legal hot water for its ambiguous privacy policy, which did not provide sufficient information about the way it collected and shared information from consumers. There was a claim of non-compliance with CCPA’s standards for transparency.

Key takeaway: Companies should ensure that their privacy policies are clear, updated, and compliant with these privacy laws. 

5. Meta (Facebook) – Unauthorized Use of Personal Data

Violation: The EU fines Meta Platforms over $1 billion under GDPR; while not directly relevant to CCPA, it proves the same principles.

Facebook used consumer data for ad targeting without proper consent, violating transparency and consent provisions.

Key Takeaway: Obtaining ”clear” opt-in consent to data use is central to avoiding regulatory ccpa fines. 

Each of these cases exhibits the importance of compliance with the privacy laws regarding cybersecurity, strong transparency, and consumer rights.

These examples alarm parties that failing to meet CCPA requirements will result in severe CCPA fines and reputational setbacks.

Factors Contributing to CCPA Fines and Penalties

The CCPA sets the contours for determining fines in cases where a company does not comply while considering the factors that are likely to impact the penalty a firm would have been subjected to. Such factors then ensure that fines are not given out disproportionately to the nature and seriousness of the violation. Below are the salient factors that will determine CCPA fines: 

1. How Serious is the Violation

The seriousness of a violation is a cornerstone in calculating the amount of money assessed in CCPA fines. 

Violations that leave sensitive personal information vulnerable to the possibility of by-usage by many consumers tend to be a lot more serious and incurable. 

For instance, authorities will inflict higher CCPA fines for large-scale data breaches or continued contravention of consumer rights than for small isolated violations.

2. How Many Situation Reports Did the Violation Affect?

Serious violations aimed against many consumers automatically trigger high CCPA fines against them. 

Yet, the CCPA fine amount usually differs from $2,500 to $7,500 for one single violation; therefore, several violators end up stopping at the award level, which continues to rise progressively. 

If, for instance, the violator affects a considerable number of consumers, the CCPA fines, within no time, multiply beyond that into millions. 

For example, a data breach affecting hundreds of thousands of individuals could see a massively larger ticket issued than a breach affecting only a handful of people. 

3. Corporate History and Recidivist Offending

The final analysis also weighs a corporate history of privacy law compliance. In case of a long history of violations in quick succession, heightened CCPA fines would await the public corporation on this count. 

Put simply, a clean compliance record ensures they can expect lenient treatment. The punishment schedule also varies with the CCPA depending on whether a given violation is chronic or merely singular.

4. Mitigation Efforts

Mitigation efforts refer to what a business does to remedy a contravention or counter a loss. 

Companies that take proactive steps to counter a contravention, such as improving data security or providing redress to affected users, could see reduced CCPA fines. 

On the contrary, companies that fail to undertake mitigation or do not prove an effort to prevent future violations will probably face graver CCPA fines. 

The CCPA breach fines compel a baleful inspection of the factors in assessing the fine. It is also necessary to commit to the values of consumer privacy and carry on with a prevention analysis. 

The category of offenses deemed possible, number of identifiable persons, corporate history, and business mitigation all determine the pigeonhole under which a fine would weigh against a company under CCPA. 

How Companies Can Avoid CCPA Fines

A continuous vigilance in data processing and adherence to CCPA regulations are quintessential for avoiding further liabilities to the business through CCPA fines and enforcement actions. 

A complete checklist for your CCPA compliance efforts to avoid CCPA fines and penalties

1. Data Minimization and Purpose Limitation 

• Collect What’s Necessary: This segment prescribes that the collection of personal data should be limited to the needs of the specific target or certain use of such collection processes that have been disclosed. 
• Use Data Responsibly: The data should remain within the scope of the purposes for which it was collected and shall not be repurposed by the entity without appropriate disclosures. 
• Evaluate Your Needs: In this case, you will have to analyze the types of personal data that need to be collected and why it is considered necessary in the course of compliance. 

2. Transparency

Make clear and readily available notices to consumers, including: 

• Privacy Policy: A highly detailed explanation of how personal data is handled and processed. It is more or less a ‘must’ containing information like what data is collected, how it is used, and what consumers’ rights are. 
• Notice of Collection: As brief as is practical advisable for legal and best practice compliance a notice at the point of collection indicating what the information would be used for and in what circumstances. 

Both of these documents are of extreme importance, and they must be placed in prominent locations and presented in easily understandable words to the consumers.

Need help creating a traditional PDF privacy policy? Websites like Wp legal Pages are able to automate the tedious and complex procedure of drafting the privacy policy under CCPA with ease.

3. Banners for Opt-out

• Settings for Opt-out Options: If the person is from California, display an opt-out banner automatically. These banners must comply with CCPA provisions by locating the user to General Privacy Control.
• Simplify Compliance: CookieYes simplifies the deployment and implementation of banners, saving time and resources.

4. Management of Consumer Protest

• Provide the Ability to Make the Requests in Different Ways: Provide at least two ways for the consumers to submit the CCPA requests, be it RDP or any deletion request.
• Optimum Reply: All the requests shall be responded to within a period of absolutely no more than 45 days although the period may be extended up to 45 days. A delay in the notice would be necessary for the consumers with respect to without or that are very complicated or high volume complaints.

5. Security Measures

• Formulation of Procedures: There should be basic security measures such as encryption, passwords, and regular backups, and compliance with data access control, to prevent unauthorized access to the data.
• Responsibility of Employees: All employees should be trained on best practices in cybersecurity and include identifying phishing or other threats.

6. Assessments of Possible Risks

In order to evaluate the risks of processing data and the measures that can be taken while dealing with the risks, every organization should regularly conduct the Data Protection Impact Assessments (DPIAs). Such sets of assessments contribute to the assurance that practices are compliant with legal requirements or other compliance obligations.

7. Compliance of Third Party

• Contracts: The same applies when dealing with a third-party service provider, as you will want to ensure their compliance with CCPA through the contract to avoid CCPA non compliance penalties.
• Monitoring of Third Parties: Conduct an audit or evaluation on a regular basis on a voluntary basis in order to reduce exposure.

Streamline Compliance with WP Legal Pages and WP Cookie Consent

The availability of good tools, especially WP Legal Pages and WP Cookie Consent, provides mounting challenges to businesses in need of sprouting for CCPA applications. 

Since legal documents are essential for the business, such as privacy policies, terms and conditions, and disclaimers, as well as those required by the GDPR, the WP Legal Pages Plugin has done the work easily. 

This wizard allows the users to effortlessly generate professional and engaging legal documents that can be edited to match the business specifications. As a result, they are more confident in managing compliance requirements such as CCPA. 

It is further enhanced by the WP Cookie Consent Plugin, which promotes a more holistic experience where visitors are directly targeted but better protected from snooping. 

This is a more substantial promise. All these two solutions enable businesses to remain compliant and, at the same time, work towards gaining the trust of their clients and target market.

FAQ

Conclusion

Since compliance with privacy laws like CCPA has become part of building trust with clients and protecting businesses, there has to be transparency, respect for consumer rights, and robust data security policies as well.

Adoption of such measures as data minimization, purpose limitation, privacy policies and opt-out mechanisms, can assist businesses in mitigating risks and the likelihood of extreme CCPA fines and penalties which are enforcement actions.

WP Legal Pages and WP Cookie consent eliminate such practical challenges. They provide easy ways to create required documents for legal compliance and manage the consents.

Further appealing, in addition to the compliance aspect, is the assurance that this offers the customer regarding your promise to them about their privacy, thereby cementing trust and brand loyalty among your market, avoiding fines under CCPA.

As privacy regulations emerge, a proactive approach is necessary to adapt reliability and save time and energy.

Make compliance investments today to not only fulfill your legal responsibilities but also to protect your image and help your business grow again in a market that is more aware of its privacy settings.

If you liked this article, you can also consider reading:

• What Is IAB TCF?
• General Data Protection Regulation (GDPR) Compliance?
• IAB CCPA Compliance Framework.

Are you ready to take the lead in safeguarding data privacy on your website? Grab WP Legal Pages Compliance Platform now!