California Jurisdiction: Sale of Personal Data Criterion in the California Consumer Privacy Act (CCPA)

The California Consumer Privacy Act (CCPA) uses the sale of personal data criterion to determine the applicability of its provisions. This factor extends the law’s scope to businesses that monetize personal information, ensuring they are subject to specific legal obligations regarding consumer data.

Text of Relevant Provisions

CCPA Sec. 1798.140(ad)(1):

"“Sell,” “selling,” “sale,” or “sold’’ means selling, renting, releasing, disclosing, disseminating, making available, transferring, or otherwise communicating orally, in writing, or by electronic or other means, a consumer’s personal information by the business to a third party for monetary or other valuable consideration."

Analysis of Provisions

• CCPA Sec. 1798.140(ad)(1) defines the concept of "sale" broadly, encompassing various forms of sharing or transferring personal information to third parties, provided there is an exchange for "monetary or other valuable consideration." This wide-ranging definition is crucial as it brings within the scope of the CCPA not just traditional sales of data but also other transactions where personal data is exchanged for benefits that are not strictly monetary but still hold value for the business.
• The broad definition of "sale" ensures that companies cannot circumvent the law by engaging in non-monetary transactions involving personal data. For example, if a business shares consumer data with a third party in exchange for enhanced advertising services rather than direct payment, this would still be considered a "sale" under the CCPA, thereby subjecting the business to the law's requirements.
• The law’s applicability, therefore, extends to a wide array of data transactions, ensuring that businesses involved in the monetization of personal information, in whatever form, are bound by the CCPA’s provisions.

Implications

• For Businesses: Companies operating in California must carefully evaluate any transfer or sharing of personal data to third parties to determine whether such actions could be considered a "sale" under the CCPA. Even exchanges that do not involve direct monetary payment but offer other forms of consideration can trigger the law’s requirements.
• For Data Monetization Strategies: Businesses that monetize personal data need to implement mechanisms to comply with CCPA mandates, such as providing consumers with opt-out options, as these transactions fall under the CCPA’s definition of "sale."
• Compliance Challenges: The broad definition of "sale" necessitates that companies be transparent about how they handle personal data, particularly in complex data-sharing arrangements that might not traditionally be viewed as sales. Failure to recognize these transactions as sales could lead to non-compliance with the CCPA and result in significant legal and financial repercussions.