• California Flicks On Its "Shine the Light" Privacy Law
  • January 14, 2005
  • Law Firm: Manatt, Phelps & Phillips, LLP - Los Angeles Office
  • California's privacy law known as "Shine the Light" took effect January 1, 2005, requiring marketers to contend with yet another stringent state privacy law. But there's some good news: many marketers will be able to avoid the most onerous aspects of the law by simply providing consumers with notice of privacy policies containing opt-out options.

    As initially drafted, the bill would have required companies to keep records of all customer data that are shared with third parties for direct-marketing purposes. It also would have required companies to provide a consumer with all the data that were shared and the names of the third-party data users within 30 days of a request by the consumer. It would affect any company doing business in California.

    However, under the bill signed into law, companies can opt out of the requirements by offering an opt out option to consumers. If the company notifies consumers of their choice not to have their personal information disclosed to third parties for marketing purposes, it does not need to provide the consumer with the details of what data were shared and with whom. Third parties are defined broadly to include not only unrelated businesses, but also affiliates under the same corporate umbrella.

    Significance: Because of the administrative burden involved in providing a consumer with shared data and the names and addresses of the third-party data users upon that consumer's request, most companies will probably choose to offer the opt-out provision. Many companies, of course, already offer consumers the choice to opt out of sharing data with unrelated businesses; far fewer offer that option when it comes to affiliates.