You’ve probably seen news about CPPA privacy fines lately. These penalties can be scary for any business. The California Privacy Protection Agency (CPPA) is getting serious about enforcement. So, understanding how to avoid these costly CPPA privacy fines is more important than ever for your company.
What is the CPPA and What Are These Fines?
The CPPA is a dedicated state agency in California. Its primary responsibility is to implement and enforce the California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA). These laws give California residents significant control over their personal information.
Any business that collects personal information from California residents likely needs to comply. The reach of these regulations is extensive. It affects companies across the nation and globally if they handle Californian data.
When businesses fail to meet their obligations, the CPPA can issue substantial penalties. These are the CPPA privacy fines that often capture public attention. Several enforcement actions have already highlighted the agency’s commitment to upholding these consumer privacy rights.
The CCPA, as amended by the CPRA, grants consumers a robust set of privacy rights. These include the right to know what personal information is collected about them and how it is used or shared. Consumers also have the right to delete their personal information held by businesses.
Furthermore, they can opt out of the sale or sharing of their personal information. Businesses must provide clear pathways for consumers to exercise these rights. Failure to respect these consumer privacy rights properly can lead to significant enforcement actions.
Additional rights include the right to correct inaccurate information and the right to limit the use and disclosure of sensitive personal information. Businesses must also provide a notice of non-discrimination for exercising these rights.
Recent Cases Spotlight Common Problems
Several well-known companies have recently faced enforcement actions. Sephora was a notable early case in August 2022. More recently, Honda Motors and Todd Snyder have also come under CPPA scrutiny, offering valuable lessons for all businesses handling Californian consumer data.
What specific issues led to these enforcement actions? Common themes emerged from these cases. Examining these problems can help you identify and mitigate similar data privacy risks within your own organization.
A primary issue involved inadequate or unclear privacy notices. Some companies failed to properly inform consumers about the collection and sharing of their personal information. Under CCPA, the definition of “sale” is broad, encompassing exchanges of personal information for monetary or other valuable consideration, which was not always clearly disclosed.
Another frequent problem area was the difficulty consumers faced when trying to opt out of tracking cookies or exercise other rights. For example, some websites lacked a straightforward “reject all” button for non-essential cookies. The law mandates that these choices be user-friendly and accessible.
Instead, opt-out processes or mechanisms to exercise privacy rights were often convoluted. Some businesses even required excessive personal information, such as photo identification, simply to process a consumer’s request. These practices create unnecessary barriers for consumers trying to manage their data privacy.
Failures in handling authorized agent requests were also noted. The CCPA allows consumers to designate an agent to make requests on their behalf. Some businesses lacked clear processes for accepting and verifying these requests.
Gaps in managing third-party risks contributed to non-compliance as well. Finally, a critical issue was the failure of some businesses to remediate identified violations within the 30-day cure period stipulated by the law. This period offers a chance to correct issues, but not all companies capitalized on it effectively.
To better understand these recurring issues, consider the following common violations and how they might be addressed:
| Common Violation Area | Description of Problem | Potential Remediation Step |
| Improper Privacy Notices | Failing to clearly disclose data collection, use, and sharing practices, especially regarding the “sale” or “sharing” of personal information. | Review and update privacy policies to accurately reflect all data practices, using clear, understandable language. |
| Difficult Opt-Out Processes | Making it hard for consumers to opt out of cookie tracking or the sale/sharing of their data (e.g., no “Reject All” button, confusing interfaces). | Implement user-friendly consent mechanisms and opt-out links that are easy to find and use. |
| Flawed DSR Fulfillment | Burdensome requirements for submitting Data Subject Requests (DSRs), like demanding excessive personal information for verification. | Streamline DSR intake and verification processes, requesting only necessary information. |
| Missing Authorized Agent Processes | Lack of a clear system for consumers to use authorized agents to submit CCPA requests on their behalf. | Establish and clearly communicate a process for receiving and processing requests from authorized agents. |
| Failure to Cure Violations | Not rectifying alleged violations within the 30-day cure period provided after notification by the Attorney General or CPPA. | Develop a rapid response plan to address and fix any notified violations promptly within the cure period. |
The Heavy Hit of CPPA Privacy Fines and Violations
The consequences of these litigations go far beyond just the CPPA privacy fines themselves. There’s a financial impact, sure. But it also affects your customers and your employees. Over time, even your vendor relationships can feel the strain.
Financial Burdens Pile Up
The financial penalties themselves are significant. The CCPA authorizes fines of up to $2,500 per violation. This amount can increase to $7,500 per violation if it is deemed intentional or involves the personal information of minors.
It is important to understand that “per violation” can sometimes be interpreted as per affected consumer, potentially leading to very large aggregate fines. Beyond these direct fines, businesses also face considerable legal fees, investigation costs, and potential expenses from associated litigation. These accumulated costs can severely impact any organization, regardless of its size.
Additionally, businesses may incur costs related to mandatory audits or the implementation of corrective measures prescribed by the CPPA. These ongoing compliance burdens can strain financial resources for an extended period.
Customer Trust Takes a Dive
When news breaks that a brand is facing scrutiny for privacy lapses, customer trust can erode quickly. This loss of faith can directly impact sales and revenue as consumers become more discerning about who they entrust with their data. Rebuilding that damaged reputation is a long and arduous process.
Customers are increasingly privacy-aware. If they perceive that a company does not respect their data privacy rights, they are likely to take their business to competitors who demonstrate better data stewardship. This can result in customer churn and long-term market share loss.
Employee Morale and Productivity Suffer
The internal impact on your team can also be substantial. Employees may experience a decline in morale and a loss of pride when their company is publicly cited for privacy failings. This can, in turn, lead to decreased productivity.
Staff may become hesitant or uncertain about whether their daily tasks comply with regulations. They might worry about inadvertently causing further violations. This creates a climate of caution that can stifle innovation and efficiency.
Routine tasks that once flowed smoothly might now require extensive review by privacy or legal teams. If robust internal privacy processes are not already in place, this can create significant bottlenecks. These delays can hamper operational efficiency and further depress morale.
Vendor Relationships Get Complicated
Your business relationships with vendors and partners can also become strained. While they may wish to continue working with you, they will likely exercise increased caution. They will anticipate that your legal and contractual requirements might become more stringent, involving additional scrutiny and review cycles.
If your internal teams are unprepared for these heightened due diligence expectations, delays are inevitable. Negotiating and closing new vendor contracts could take significantly longer. This can slow down your overall speed of business and impede the launch of new projects or services.
Risk-averse partners might even reconsider their association with a company that has a publicized record of privacy non-compliance. This could lead to difficulties in securing future partnerships or even termination of existing agreements, further isolating the business.
Why Is It So Tough to Fix Violations in 30 Days?
The law often gives a 30-day window to fix problems after a notice of violation. But many companies find this timeframe incredibly challenging. Why is that? Several factors play a part.
Cookie Compliance: Business Needs vs. Legal Rules
Business objectives frequently clash with compliance and legal recommendations, particularly concerning website cookies. Marketing departments, for instance, aim to gather extensive data from every customer interaction. Every click, page view, and shopping cart addition is often tracked to optimize campaigns and understand behavior.
This data collection typically relies on various tracking technologies like tags, pixels, and cookies embedded on your website. The pressure to maximize data capture for marketing analytics can sometimes lead to a downplaying of privacy compliance needs.
This focus on data collection can result in businesses deploying a large number of tags and cookies, sometimes without full oversight. When privacy compliance takes a secondary role, it becomes difficult to make rapid adjustments if these tracking mechanisms are found to be non-compliant. Untangling a complex web of integrated marketing technologies, such as analytics platforms, advertising trackers, and third-party scripts, within a short timeframe is a considerable challenge.
Understanding Technical Setups for Cookies
Another common hurdle is an insufficient understanding of the technical intricacies of cookie deployment and consent management. The configuration of cookie consent tools, often known as Consent Management Platforms (CMPs), can be complex. A frequent mistake is setting up a cookie banner incorrectly, leading to cookies being deployed before user consent is obtained.
Even if consent is solicited, the underlying tags and cookies might not be correctly configured to honor the user’s choices. For example, a user might reject analytics cookies, but the scripts continue to fire. This discrepancy means your website’s cookie handling isn’t genuinely compliant with legal requirements for consent.
Verifying that consent choices are technically respected requires diligent testing. This includes checking if cookies are blocked prior to consent and if they are appropriately managed after a user specifies their preferences through the CMP.
The Missing Piece: Cookie Governance
A critical, yet often overlooked, component is robust cookie governance. This involves establishing a recurring process to monitor and manage your website’s cookie landscape. Regular scans should be conducted to detect new cookies that may have been added by various teams or third-party integrations.
These governance activities also involve verifying that existing cookies continue to respect user consent choices as recorded by your CMP. This is not a one-time task; it requires ongoing attention. Many organizations lack this systematic, regular check-up protocol.
A cookie governance checklist might include items like verifying the accuracy of cookie categorization (e.g., essential, analytics, marketing), checking the functionality of the “Reject All” option, and confirming that cookie disclosures in the privacy policy are up-to-date. Tools for automated website scanning can assist in this process by identifying cookies and their sources.
Software updates for CMPs are released, and new marketing partnerships can introduce new cookies to your site without central approval. Without a fixed schedule for cookie governance reviews—perhaps monthly or quarterly—your website can quickly drift out of compliance. It is much like vehicle maintenance; regular checks are necessary to maintain performance and safety.
Legal Teams Are Often in the Dark
It is a common, though surprising, reality that legal departments may not have full visibility into all data sharing practices across different business units. This often stems from the absence of a comprehensive data inventory or data map. Without such a foundational tool, legal teams may lack precise knowledge of what personal information is collected throughout the organization.
They may also be unaware of all the internal and external parties with whom data is shared, the specific purposes for that sharing, where the data is stored, and the applicable data retention periods. A data inventory, for instance, helps legal by cataloging data assets, processing activities, and data flows, providing a basis for legal analysis and compliance documentation.
These details are critical for crafting an accurate and complete privacy notice. An outdated or incomplete privacy notice is itself a violation. Failing to provide clear and conspicuous notice at or before the point of data collection is a fundamental breach of most privacy laws, including the CCPA.
Establishing and adhering to data retention schedules presents another challenge. Personal information is sometimes retained for longer than necessary for the stated business purpose. This practice not only violates data minimization principles but also significantly increases your organization’s risk profile in the event of a data breach, as more data is exposed to potential harm.
The absence of a formal, well-structured privacy program often leads to inadequate employee training and low general awareness of data protection responsibilities. When individuals across the company do not understand their specific roles in safeguarding personal information, compliance efforts are inherently weakened. A comprehensive privacy program typically includes documented policies and procedures, regular staff training, mechanisms for conducting Privacy Impact Assessments (PIAs), a defined DSR handling process, and an incident response plan to address data breaches effectively.
These elements work together to build a culture of privacy and reduce overall risk.
Third-Party Risk Management: A Growing Concern
Managing risks associated with your vendors, known as third-party risk management (TPRM), is critically important for overall compliance. Cybersecurity or IT security teams generally have more established TPRM processes. This is because cybersecurity has been a recognized operational risk for a longer period.
Consequently, other departments are often accustomed to security reviews for new vendors. Well-known standards, such as SOC 2 reports or ISO 27001 certifications, are commonly used to assess and attest to a vendor’s cybersecurity posture. These frameworks help address security-related risks effectively.
However, privacy considerations are still gaining traction within these standard vendor review frameworks. While privacy-specific certifications like ISO 27701 (Privacy Information Management System) exist, their adoption by vendors is not yet universal. Integrating privacy into TPRM can be challenging unless the privacy team collaborates closely with cybersecurity, legal, and procurement departments.
A thorough privacy risk assessment should become a routine part of the vendor onboarding process, conducted before any contract is signed. This assessment might include questionnaires about the vendor’s data handling practices, data location, sub-processor management, and security measures specifically protecting personal information.
Without a prior privacy risk evaluation, it becomes difficult to negotiate and implement an appropriate Data Protection Addendum (DPA) as part of the vendor contract. A DPA is a legally binding document that clearly defines how the vendor is permitted to process personal data on your behalf. It is an essential instrument for demonstrating CCPA compliance when sharing or selling personal information with third parties, outlining roles, responsibilities, and data protection obligations.
Key clauses in a CCPA-relevant DPA include specifying the business purposes for processing, prohibiting retention, use, or disclosure outside of the direct business relationship, and obligations to assist with DSRs.
Steps You Can Take to Avoid Trouble
So, what can you do to get ahead of these issues? You can start by looking at your public-facing elements. Then, turn your attention inward. It’s a step-by-step process.
Check Your Public Face First
Begin by examining your public-facing privacy elements, starting with your website’s cookie banner. Does your site have a cookie consent banner? Is it straightforward for users to understand and interact with? Crucially, does it feature a clear and accessible “reject all” or equivalent option for non-essential cookies?
This allows users to easily opt out of tracking they do not want. Your tag management system must be configured to respect the consent choices users make via the banner. If any scripts are loaded directly onto the page (not via a tag manager), confirm they are also designed to be consent-aware.
Next, carefully review your organization’s privacy notice (or privacy policy). Does it accurately and comprehensively list the categories of personal information you collect from consumers? Does it clearly explain the business or commercial purposes for which each category of personal information is collected and used, and with whom it is shared or sold?
Your privacy notice must be easy for the average consumer to understand and kept current with your actual data practices. It should also detail consumer rights under the CCPA, such as the right to know, delete, opt-out, correct, and limit use of sensitive PI, along with instructions on how to exercise these rights and your contact information for privacy inquiries.
Look Inward: Understand Your Data
The next step involves looking inward to thoroughly understand your organization’s data practices. Start by creating a detailed inventory of your systems, business processes, and vendors that handle personal information. This exercise is commonly referred to as data mapping or creating a record of processing activities (ROPA).
Begin by tracing the typical customer journey. Identify all points where personal information is collected. Map how that data flows through your various internal systems and applications. Document if, how, and to whom that data is subsequently transferred outside your organization.
Various departments should be involved in this data mapping process, including IT, marketing, sales, HR, and product development, to get a complete picture. Specialized data discovery and mapping tools can assist, but manual interviews and questionnaires are often essential.
Pay close attention to your marketing activities, customer care interactions, and sales channel operations, as these are often data-intensive areas. Remember that building and maintaining this data map is not a one-time project; it is an ongoing commitment. Your data map will need to evolve as your business introduces new products, services, or processes.
Streamline Data Subject Requests
Develop and implement a streamlined process for efficiently handling Data Subject Requests (DSRs), also known as Consumer Rights Requests. These are formal requests from individuals to access, delete, correct their personal information, or opt-out of its sale or sharing. Consider leveraging a privacy management or governance platform for this purpose.
These specialized tools can help automate various aspects of DSR management, such as logging incoming requests, verifying consumer identities, routing tasks to relevant data owners, tracking response progress against legal deadlines (typically 45 days under CCPA, extendable by another 45 days with notice), and generating audit trails. This makes demonstrating compliance and managing request volumes much simpler.
A clear DSR workflow should include steps for intake (e.g., via a webform or toll-free number), identity verification (proportionate to the request’s sensitivity), searching for and compiling relevant data from various systems, reviewing data for any exemptions, and securely delivering the response to the consumer.
Partner Up Internally for Vendor Risks
Collaborate closely with your internal cybersecurity, IT security, legal, and procurement teams. Integrate privacy risk assessments into the standard due diligence process for every new vendor before they are onboarded. For existing vendors, conduct these privacy reviews when their contracts are due for renewal or if the scope of data processing changes.
This collaborative approach helps place the necessary Data Protection Addendums (DPAs) or equivalent contractual clauses into your vendor agreements. Such proactive measures provide greater assurance that any personal data shared with third parties is handled in accordance with your privacy standards and legal obligations. Key questions for vendors might include their data security measures, data retention policies, and processes for handling DSRs forwarded from your organization.
Embrace Regular Cookie Governance
Establish a consistent, recurring schedule for cookie governance activities. This should involve regularly scanning your website(s)—perhaps monthly or quarterly—using specialized cookie scanning tools. These scans will help generate a comprehensive inventory of all cookies and similar tracking technologies being deployed on your site.
Identify any new or uncategorized cookies and classify them appropriately (e.g., strictly necessary, functional, performance, targeting). It is also good practice to run scans from different geographic locations, as cookie behavior can sometimes vary. Critically, test your website’s response to the Global Privacy Control (GPC) signal, both when it is enabled and disabled in the browser.
The GPC is a browser-level signal or setting that users can enable to automatically communicate their general preference to opt-out of the sale or sharing of their personal information across all websites they visit. Under CCPA regulations, businesses are generally required to honor GPC signals as a valid opt-out request, similar to a user clicking a “Do Not Sell/Share My Personal Information” link.
Verify that cookie consent choices provided through your banner are technically honored in all relevant scenarios and across different browsers and devices. If discrepancies or issues are identified—such as cookies firing before consent or ignoring opt-out preferences—work promptly with your website development and marketing technology teams to rectify them.
After implementing fixes, conduct follow-up scans to confirm that the problems have been resolved correctly. Maintaining this disciplined approach to cookie governance is fundamental to achieving and sustaining consistent cookie compliance.
Building a Privacy-Mature Organization Takes Time
Developing robust privacy practices is not an instantaneous achievement; it cannot be accomplished by merely flipping a switch. While privacy is increasingly becoming a standard expectation—or ‘table stakes’—across all industries, its deep integration is still an evolving process for many. It is also not the sole responsibility of a single department, like legal or IT.
The entire organization must be engaged for the company to reach a state of privacy maturity. This holistic involvement helps privacy considerations become embedded in all relevant business operations and decision-making processes. Characteristics of a privacy-mature organization often include strong C-level support, embedding Privacy by Design principles into product development, maintaining comprehensive data governance, and fostering a culture of continuous improvement in privacy matters.
This progression towards privacy maturity is a journey that unfolds over time. Through mechanisms like regular privacy assessments, ongoing awareness initiatives (beyond basic annual training), and practical experience, the organization gradually learns. Its collective understanding of privacy requirements and associated risks deepens, much like building a muscle through consistent, dedicated effort.
To illustrate, consider a retail client we collaborated with over a two-year period. During this engagement, we conducted detailed privacy reviews of more than 400 of their application systems and data assets. Each was carefully evaluated against applicable privacy regulations and best practices.
This extensive assessment process provided the client with a comprehensive understanding of their specific privacy risks. It also illuminated the interconnected data flows and business processes related to personal information handling across their enterprise.
This thorough work significantly enhanced visibility into their overall privacy posture. As a direct outcome, tasks like maintaining an accurate and up-to-date privacy notice became considerably more manageable. Cookie compliance was elevated to a top priority, with systematic governance checks instituted on a monthly basis.
These concerted actions led to a heightened sense of privacy awareness among business, technology, procurement, and security teams. Team members gained a better appreciation for the privacy implications of their daily activities and new projects. A notable shift occurred as teams began to proactively engage with the central privacy office.
They started requesting privacy assessments for new initiatives or even for existing vendors if the nature or volume of data sharing was expected to change. This proactive stance and cultural shift did not materialize overnight. It was the result of approximately two and a half years of sustained effort, numerous assessments, and visible, unwavering support from senior leadership who championed privacy as a core business priority.
Initiating these efforts now provides your organization with the necessary time to methodically build and reinforce a strong, sustainable privacy program. Far from being just a compliance burden, robust privacy practices can become a competitive differentiator, enhancing brand reputation. Ultimately, this proactive approach contributes to greater confidence and peace of mind for your leadership, your employees, and, most importantly, your customers.
Conclusion
Confronting the potential for CPPA privacy fines can seem like a significant challenge for any business. However, by understanding the common compliance pitfalls and by taking proactive, well-considered steps, you can substantially reduce your organization’s risk profile. Key areas of focus should include providing clear and comprehensive privacy notices and offering easily accessible opt-out mechanisms.
Additionally, developing a thorough understanding of your data landscape and diligently managing vendor risks are crucial. Building a pervasive culture of privacy requires sustained effort and commitment from all levels of your organization. Ultimately, addressing CPPA privacy fines effectively is not solely about avoiding financial penalties; it is fundamentally about building lasting customer trust and fostering a resilient, sustainable business for the future.
