Data privacy has become a hot topic today, especially with the growing use of technology and the associated increase in cybercrime. It’s estimated that 92% of Americans are concerned about their privacy, while another 81% feel that their data will be used in ways they are uncomfortable with.
To counter these worries, governments are enacting laws that force companies to preserve the privacy and security of their customers. Two of the most well-known privacy laws are the California Consumer Privacy Act (CCPA) and the European Union’s General Data Protection Regulation (GDPR). Both laws aim to protect consumer data, but they are designed for different regions and have unique provisions.
Read on to learn about their similarities and differences and understand the obligations under each law.
Overview of CCPA and GDPR
The CCPA was enacted to protect the privacy rights of California residents. It grants consumers the right to know what personal data is being collected, opt out of the sale of their data, and request deletion of their information. The law took effect on January 1, 2020, and applies to businesses that meet specific thresholds, such as generating more than $25 million in annual revenue.
The GDPR, which came into effect on May 25, 2018, is the EU’s legal framework for data protection and privacy. It applies to all EU citizens and any company that handles data related to them, regardless of where the company is located. The GDPR is stricter than the CCPA in some areas and has served as a model for other privacy laws worldwide.
Similarities Between CCPA and GDPR
The CCPA and GDPR share some common ground. Both laws are enacted to increase transparency in how businesses handle personal data and give consumers more control over their information. They prioritize consumer rights and privacy by giving individuals the power to access, delete, and control their personal data at any time. Additionally, the CCPA and GDPR require businesses to be transparent about their data collection practices and provide clear privacy notices to consumers. While the GDPR has more explicit provisions, both laws require businesses to implement reasonable security measures to protect consumer data.
Though at first glance, both laws may seem identical, an in-depth look will show their differences, with GDPR being more comprehensive than the CCPA.
Key Differences Between CCPA and GDPR
Below are the key differences between the CCPA and GDPR.
Scope of Application
The CCPA applies only to for-profit businesses that meet certain criteria. These include businesses earning more than $25 million in annual gross revenue, buying, receiving, or sharing the personal information of 50,000 or more California consumers, or earning more than 50% of revenue from selling California residents’ personal data. The GDPR, on the other hand, has a broader scope. It applies to any organization, regardless of size, that processes the personal data of EU citizens. This means even small companies outside the EU must comply if they collect data on EU residents.
Definition of Personal Data
The GDPR defines personal data more broadly, including not only identifiable information but also data that indirectly identifies an individual. This can include online identifiers like cookies, which are not explicitly listed in the CCPA definition. As per the CCPA, personal information means anything that identifies, relates to or could be reasonably linked to a particular consumer or household. This includes names, addresses, IP addresses, browsing history, and even geolocation data.
Consumer Rights
Both laws grant consumers certain rights, but the extent and nature of these rights differ.
The CCPA offers the following:
- Right to Know – Consumers can request to know what personal information a business collects, uses, shares, or sells.
- Right to Delete – Consumers can request the deletion of their personal information.
- Right to Opt-Out – Consumers can opt out of the sale of their personal information.
- Right to Non-Discrimination – Businesses cannot discriminate against consumers who exercise their CCPA rights.
The GDPR is more encompassing and includes:
- Right of Access – Individuals have the right to access the personal data that an organization holds about them.
- Right to Rectification – If the data is inaccurate, individuals can request corrections.
- Right to Erasure (Right to Be Forgotten) – Individuals can request the deletion of their data under specific circumstances, such as when it is no longer necessary for the purposes it was collected.
- Right to Data Portability – Individuals can request their data in a machine-readable format and transfer it to another data controller.
- Right to Restrict Processing – Consumers can restrict the use of their data in certain situations, such as during a dispute over accuracy.
- Right to Object – Individuals can object to the processing of their data in some instances, like for marketing purposes.
Penalties and Enforcement
Businesses that fail to comply with the CCPA can face fines of up to $7,500 per violation if intentional and $2,500 per violation if unintentional. Additionally, the CCPA gives consumers the right to file private lawsuits in the event of a data breach. However, the GDPR imposes much stricter penalties. Organizations that violate the law can be fined up to 4% of their annual global revenue or €20 million, whichever is higher. Unlike the CCPA, there is no private right of action for consumers under GDPR, except for specific cases like data breaches.
Opt-In vs. Opt-Out
The CCPA operates on an opt-out model. This means businesses can collect and sell personal information by default, but consumers have the right to opt out. The GDPR, on the other hand, is based on an opt-in system. Organizations must obtain explicit consent from individuals before processing their data, making it more stringent than the CCPA in terms of data collection practices.
Third-Party Data Sharing
Under CCPA, businesses must disclose whether they sell consumer data to third parties. Consumers can then choose to opt out of such sales. The GDPR does not focus specifically on the sale of data, but it requires companies to be transparent about any data sharing, whether for sales, processing, or other purposes. Organizations must disclose who they share data with and why, and they must have a lawful basis for such actions.
Data Protection Officer (DPO)
Under the GDPR, organizations must appoint a Data Protection Officer if they engage in large-scale monitoring or processing of sensitive data. The DPO is responsible for ensuring that the company complies with GDPR requirements and acts as a liaison with regulatory authorities. The CCPA does not require businesses to appoint a Data Protection Officer.
Data Breach Notification
The GDPR mandates that organizations report data breaches to authorities within 72 hours if the breach poses a risk to individuals’ rights and freedoms. In some cases, companies must also inform the affected individuals. The CCPA has no specific provision for breach notification. However, California’s general data breach notification law requires businesses to notify consumers if their unencrypted personal information has been accessed or stolen.
Thus, these are the differences between the two privacy laws. Generally speaking, if you collect or handle the data of E.U residents, you must implement GDPR controls, and they will cover CCPA as well. However, implementing it can be expensive and time-consuming. Moreover, it’s even unnecessary if you only handle the data of California residents. In this case, you can go with the regulations of CCPA which is narrower than the GDPR.
Bottom Line
The CCPA and GDPR are two well-known laws to protect consumer privacy in different parts of the world. While both laws share common goals, their provisions differ in terms of scope, enforcement, and consumer rights. Businesses that operate in both California and the EU must ensure compliance with both regulations, which can be challenging but necessary. Understanding the specific provisions of each law will help companies stay ahead of compliance and build trust with consumers.