California is bungling its chance for historic privacy protections

California’s new online privacy agency is openly defying the voter-approved proposition that created it, and the agency’s board has thus far sidestepped its obligation to keep staff from bungling a historic opportunity to ensure the first comprehensive privacy regulations in the nation are just, equitable and fair.

Proposition 24, the California Privacy Rights Act of 2020, is an extremely complicated body of law that will have lasting impacts for small, diverse businesses in the state.

The law established the California Privacy Protection Agency (CPPA) with a mandate to adopt privacy regulations by July 1, 2022, “while giving attention to the impact on business and innovation.”

The California Privacy Protection Agency board is crossing their fingers, closing their eyes and hoping for no litigation.

However, CPPA Executive Director Ashkan Soltani, speaking at an Assembly budget subcommittee hearing earlier this month, said, “Our rulemaking plan package will not be completed within our deadline, so we will miss our deadline.”

Missing the deadline is understandable. The CPPA has neither the necessary resources nor the expertise to develop privacy regulations by the July 1 statutory deadline. It will convene its first informational hearing today (March 29) and has conducted no significant outreach to small businesses and other stakeholders that should have real and significant input.

But by ignoring the deadline without a statutory solution, the CPPA board is crossing their fingers, closing their eyes and hoping for no litigation.

With only three months to go before the CPPA blows past its statutory deadline, the Legislature can give the CPPA more time for adoption and enforcement of the regulations. However, the CPPA has made no attempt to work on a legislative fix, though some board members have publicly expressed that a legislative fix could be needed.

This leaves the CPPA in the untenable position of breaking the very law that established it, and leaving the state exposed to litigation, which could unnecessarily delay privacy regulations, increase costs and lead to further confusion for California’s 4 million small businesses.

Many Black-owned businesses, which have been disproportionately affected by the pandemic, have shown incredible resilience in the face of adversity.

The five-member CPPA board, touted for their expertise in privacy, technology and consumer rights but composed of relative newcomers to state government, has allowed the agency’s cavalier approach to continue. There is still time for a course correction.

Unfortunately, small businesses in California may not get the same opportunity.

While Proposition 24 sought balance between protecting consumer privacy rights and the impact to businesses, small businesses have not been afforded more than a cursory review when it comes to the unintended consequences of rushing a sprawling regulatory framework that will affect virtually all small businesses in the state.

Still reeling from the crushing financial burden of the ongoing pandemic, supply disruption and inflation, small businesses, especially Black and other minority-owned businesses, cannot afford to comply with regulations that are unreasonable and impractical.

Many Black-owned businesses, which have been disproportionately affected by the pandemic, have shown incredible resilience in the face of adversity, moving more commerce online and leveraging technology platforms to connect with their customers and communities in new ways.

They do not have the resources to navigate a new regulatory process in Sacramento with far-reaching implications while doing everything they can to stay afloat. The CPPA, for its part, has made little to no effort to conduct outreach to underserved communities that will be most impacted by their regulations.

I strongly encourage the CPPA board to act now on this avoidable issue so it does not violate Proposition 24. Work with the Legislature to extend the statutory deadline and engage small businesses, especially those that are Black and minority-owned, to make sure our voices are heard in the regulatory process.

Let’s get this right. We can’t afford to stand by while more Black-owned businesses are forced to close.
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Editor’s Note: Earl “Skip” Cooper II, a disabled veteran, is board chair of the Black Business Association, the oldest ethnic business association in California.