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California Attorney General Issues Guidance on Complying with Do-Not-Track

By: Aaron Krowne

In 2013, the California Legislature passed AB 370, an addition to California’s path-blazing online consumer privacy protection law in 2003, the California Online Privacy Protection Act (“CalOPPA”).  AB 370 took effect January 1, 2014, and adds new requirements to CalOPPA pertaining to consumers’ use of Do-Not-Track (DNT) signals in their web browsers (all major web browsers now include this capability). CalOPPA applies to any website, online service, and mobile application that collects personally identifiable information from consumers residing in California (“Covered Entity”).

While AB 370 does not mandate a particular response to a DNT signal, it does require two new disclosures that must be included in a Covered Entity’s privacy policy: (1) how the site operator responds to a DNT signal (or to other “similar mechanisms”); and (2) whether there are third parties performing online tracking on the Covered Entity’s site or service. As an alternative to the descriptive disclosure listed in (1), the Covered Entity may elect to provide a “clear and conspicuous link” in its privacy policy to a “choice program” which provides consumers a choice about tracking. The Covered Entity must clearly describe the effect of a particular choice (e.g., a web interface which allows users to disable the site’s tracking based on their browser’s DNT).

While this all might seem simple enough, as with many new laws, it has raised many questions about specifics, particularly how to achieve compliance, and as a result on May 21, 2014, the California Attorney General’s Office (the “AG’s Office”) issued a set of new guidelines entitled “Making Your Privacy Practices Public” (the “New Guidelines”).

The New Guidelines

The New Guidelines regarding DNT specifically suggest that a Covered Entity:

  1. Make it easy for a consumer to find the section of the privacy policy in which the online tracking policy is described (e.g., by labeling it “How We Respond to Do Not Track Signals,” “Online Tracking” or “California Do Not Track Disclosures”).
  2. Provide a description of how it responds to a browser’s DNT signal (or to other similar mechanisms), rather than merely linking to a “choice program.”
  3. State whether third parties are or may be collecting personally identifiable information of consumers while they are on a Covered Entity’s website or using a Covered Entity’s service.

In general, when drafting a privacy policy that complies with CalOPPA the New Guidelines recommend that a Covered Entity:

  • Use plain, straightforward language, avoiding technical or legal jargon.
  • Use a format that makes the policy readable, such as a “layered” format (which first shows users a high-level summary of the full policy).
  • Explain its uses of personally identifiable information beyond what is necessary for fulfilling a customer transaction or for the basic functionality of the online service.
  • Whenever possible, provide a link to the privacy policies of third parties with whom it shares personally identifiable information.
  • Describe the choices a consumer has regarding the collection, use and sharing of his or her personal information.
  • Provide “just in time,” contextual privacy notifications when relevant (e.g., when registering, or when the information is about to be collected).

The above is merely an overview and summary of the New Guidelines and therefore does not represent legal advice for any specific scenario or set of facts. Please feel free to contact one of OlenderFeldman’s Internet privacy attorneys, using the link provided below for information and advice regarding particular circumstances.

The Consequences of Non-Compliance with CalOPPA

While the New Guidelines are just that, mere recommendations, CalOPPA has teeth. The AG’s office is moving actively on enforcement. For example, it has already sued Delta Airlines for failure to comply with CalOPPA. A Covered Entity’s privacy policy, despite being discretionary within the general bounds of CalOPPA and written by the Covered Entity itself has the force of law – including penalties, as discussed below. Thus, a Covered Entity should think carefully about the contents of its privacy policy; over-promising could result in completely unnecessary legal liability, but under-disclosing could also result in avoidable litigation. Furthermore, liability under CalOPPA could arise purely because of miscommunication or inadequate communication between a Covered Entity’s engineers and its management or legal departments, or because of failure to keep sufficiently apprised of what information third parties (e.g., advertising networks) are collecting.

CalOPPA provides a Covered Entity with a 30-day grace period to post or correct its privacy policy after being notified by the AG’s Office of a deficiency.  However, if the Covered Entity has not remedied the defect at the expiration of the grace period, the Covered Entity can be found to be in violation for failing to comply with: (1) the CalOPPA legal requirements for the policy, or (2) with the provisions of the Covered Entity’s own site policy. This failure may be either knowing and willful, or negligent and material. Penalties for failures to comply can amount to $2,500 per violation. As mentioned above, non-California entities may also be subject to CalOPPA, and therefore, it is likely that CalOPPA based judicial orders will be enforced in any jurisdiction within the United States.

While the broad brushstrokes of CalOPPA and the new DNT requirements are simple, there are many potential pitfalls, and actual, complete real-world compliance is likely to be tricky to achieve.   Pre-emptive privacy planning can help avoid the legal pitfalls, and therefore if you have any questions or concerns we recommend you contact one of OlenderFeldman’s certified and experienced privacy attorneys.