What is CCPA and how it will affect your business?

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California Consumer Privacy Act (CCPA) which came into effect on Jan. 1, 2020 is a law that protects the privacy rights of consumers within the state. Similar to Europe’s General Data Protection Regulation (GDPR), the CCPA is anticipated to affect many businesses. However, most companies don’t know how this will affect them. Approximately 44.2% business owners have never heard of CCPA while only 11.8% know if the law applies to them, and 34% are unsure if they need to change how they capture, store and process data.

Before we delve further into the impact of CCPA for businesses, let’s understand about the act in details.

What is the California Consumer Privacy Act?

CCPA is a bill that will require businesses to implement new policies to ensure the protection of personal information (privacy policies and facilitation of consumer rights). It will only apply to a business that earns $25 million in revenue per year, sells 50,000 consumer records per year, or derives 50% of it’s annual revenue from selling personal information (including businesses that collect or sell personal information from consumers in California, irrespective of where the company is located).

CCPA protects the following consumer rights:-

  • Right to know about all the collected data
  • Right to reject the sale of their information
  • Right to request removal of their data
  • Right to identify the categories of third parties with whom their data is shared and was acquired
  • Right of action in the event of a breach, to ensure companies keep their information safe.

Impact of CCPA on Business

Consumer Rights to access data

Due to the implementation of CCPA, companies will be required to grant consumers access to their own personal data that is being stored by the company. Whereas previously, consumers were unaware of what businesses were using their data for, or even what information businesses had collected about them.

CCPA is critical as businesses will be obligatory to provide a 12-month look-back for their consumers. Thus, the companies will need to start their CCPA compliance journey early on.

Consumer Rights to choose to opt-out of the sale of personal data

Due to the enactment of CCPA, companies would be required to provide consumers with the choice to opt-out of the sale of their personal data. Thus, businesses will have to stop selling customer data if their consumers are in disagreement. This will make it difficult for companies to collect information about their potential customers.

Consumer Rights to sue companies that misplace their information

Another effect of the CCPA is that consumers will have the right to sue companies which lose their personal information to hackers. Besides, if the consumer data is stolen, the sued company will lose money and, also, consumers will intend to take their business elsewhere. Consequently, companies will want to step up and work harder to guard consumer data.


Companies must realize the consequential impact of the CCPA in advance and begin preparation to become CCPA compliant. Failure to do so will lead to facing fines, lawsuits, damaged reputation, and loss of customers.

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