The California Consumer Privacy Act (CCPA) uses the concept of "business purpose" as a factor in determining the scope of applicability of the law. This factor helps define when and how personal information can be used by businesses while still complying with the CCPA's requirements.

Text of Relevant Provision

CCPA Section 1798.140(e) states:

"Business purpose" means the use of personal information for the business' operational purposes, or other notified purposes, or for the service provider or contractor's operational purposes, as defined by regulations adopted pursuant to paragraph (11) of subdivision (a) of Section 1798.185, provided that the use of personal information shall be reasonably necessary and proportionate to achieve the purpose for which the personal information was collected or processed or for another purpose that is compatible with the context in which the personal information was collected. Business purposes are:

Analysis of Provision

The CCPA defines "business purpose" as a factor that determines when the use of personal information is permissible under the law. This definition serves to limit the scope of the CCPA's applicability by allowing certain uses of personal information without triggering additional compliance requirements.

Key elements of this definition include:

1. "use of personal information for the business' operational purposes": This indicates that businesses can use personal information for their regular operations without violating the CCPA.
2. "other notified purposes": This suggests that businesses can use personal information for purposes they have explicitly communicated to consumers.
3. "reasonably necessary and proportionate": This phrase sets a standard for the use of personal information, requiring that it be both necessary for the stated purpose and not excessive in relation to that purpose.
4. "compatible with the context in which the personal information was collected": This allows for some flexibility in the use of personal information, as long as it aligns with the original context of collection.

The provision goes on to list specific examples of business purposes, which further clarify the scope of permissible uses under the CCPA.

Implications

This factor has several implications for businesses:

1. Operational flexibility: Businesses can continue to use personal information for their day-to-day operations without violating the CCPA, as long as these uses fall within the defined business purposes.
2. Transparency requirement: The inclusion of "other notified purposes" implies that businesses should clearly communicate to consumers how their personal information will be used.
3. Proportionality standard: Businesses must ensure that their use of personal information is not excessive in relation to the stated purpose, which may require regular assessments of data processing activities.
4. Context-based usage: The allowance for uses "compatible with the context" of collection provides some flexibility, but also requires businesses to carefully consider the original context when determining new uses for personal information.
5. Limited scope of applicability: By defining specific business purposes, the CCPA effectively limits its applicability to uses of personal information that fall outside these defined purposes, potentially reducing the compliance burden for businesses in certain scenarios.