In a surprising twist, the California legislature rushed last week to pass one of the most comprehensive privacy laws in the country. The bill was introduced only a week prior, and within hours of passage, it was signed into law by Governor Jerry Brown. As strict as the act is, it was enacted to avoid an even more restrictive ballot initiative, which the initiative’s sponsor agreed to withdraw.

The California Consumer Privacy Act of 2018 requires covered businesses to make new disclosures to consumers about their data collection, use, and sharing practices; allows consumers to opt out of certain data sharing with third parties; and provides a new cause of action for consumers and the California Attorney General to bring lawsuits against companies that suffer data breaches. In some respects, the act may well go beyond the requirements of the European Union’s General Data Protection Regulation (GDPR), which recently came into force. The act takes effect on January 1, 2020, and, without revisions, may upend the ad-supported business model that underlies much of the modern digital economy.

Click here to read our complete WSGR Alert discussing the new law.