In an era where digital privacy is a growing concern, businesses must take proactive steps to ensure compliance with the California Invasion of Privacy Act (CIPA) and the California Consumer Privacy Act (CCPA). One effective measure is implementing an opt-in pop-up or banner that requires user consent before data tracking begins.
Attorney Olivia Young, who has been closely monitoring CIPA compliance trends, emphasizes the significance of proper configuration. “So long as tracking does not begin until consent is given—that is, after the user clicks ‘Accept’—banners and pop-ups can be successful in warding off CIPA claims,” she explains.
CIPA, enacted in 1967, prohibits recording or monitoring communications without consent. In the digital privacy realm, a common violation of CIPA occurs when a business owner installs a tracking or analytics technology, such as Google Analytics, Meta Pixel or TikTok Pixel, on its website, and proceeds to collect user data and share it with third parties (such as Meta or Google) using the installed technology without first obtaining user consent. These tracking or analytics technologies are typically used by business owners to optimize the user experience, however, use of these technologies without first gaining user consent may expose business owners to liability under CIPA.
In the above example, the business owner’s liability under CIPA is tied to the sharing of information with third parties. In alleging a violation under CIPA, the plaintiff must establish that a third party intercepted communications between the user and the website. In the case of a business owner that has installed Meta Pixel on its website, the third-party intercepting communications between its users and the business owner is Meta. Providing users with an opportunity to decline the collection and sharing of their data with third parties is essential to avoid a violation of CIPA. This can be accomplished through a properly configured banner.
Penalties for violating CIPA can be steep, with fines of up to $5,000 per violation. Businesses that fail to gain user consent to tracking may face substantial financial and reputational consequences. Litigation targeting businesses that utilize tracking technologies without properly configured banners is increasing, with more and more businesses targeted each month. Businesses must prioritize compliance to mitigate liability and maintain consumer trust.
In addition to CIPA, businesses operating in California must also comply with CCPA. CCPA provides consumers with greater access to, and control over, the personal information that businesses collect about them, and how this information is used. Under CCPA, consumers may opt out of the collection and/or sale of their personal information, request access to their personal information after collection, and direct the deletion of their personal information (amongst other rights). Under CCPA, companies are required to provide clear opt-out measures that are easily accessible to consumers. CCPA also requires that businesses be transparent in disclosing how user information is used. Similar to CIPA compliance, properly configured banners play a critical role in meeting CCPA obligations, ensuring transparency and user consent in data processing practices.
The California Privacy Rights Act (CPRA), which went into effect in 2023, further strengthens the protections provided by CCPA. Under CPRA, businesses must provide additional disclosures regarding data sharing and ensure that consumers have a clear and accessible means to opt out of both data sales and sharing for targeted advertising.
Beyond legal compliance, opt-in banners and pop-ups help build trust with consumers by providing transparency about data collection practices. When users have clear control over their privacy settings, they are more likely to feel confident engaging with a website. Additionally, properly configured banners can enhance user experience by ensuring that only those who willingly consent to tracking receive personalized content and advertisements, leading to more meaningful and relevant interactions.
To safeguard against potential legal challenges, companies should work closely with legal counsel to review their digital tracking practices. Properly implementing opt-in banners and other digital consent mechanisms not only helps to ensure compliance with CIPA, CCPA, and CPRA but also demonstrates a commitment to protecting consumer privacy in an increasingly regulated digital landscape.
