BILL ANALYSIS                                                                                                                                                                                                    �






                             SENATE JUDICIARY COMMITTEE
                         Senator Hannah-Beth Jackson, Chair
                              2013-2014 Regular Session


          SB 1348 (DeSaulnier)
          As Amended April 8, 2014
          Hearing Date: April 22, 2014
          Fiscal: No
          Urgency: No
          TH


                                        SUBJECT
                                           
                  Online Data Brokers: Sale of Personal Information

                                      DESCRIPTION  

          This bill would require online data brokers to allow subject  
          individuals to review their personal information and request  
          that the information be permanently removed from an online data  
          broker's database.  Upon receiving a request to have personal  
          information removed, an online data broker would be prohibited  
          from transferring the subject individual's personal information  
          to any other party, and would have to remove the information  
          from all websites under its ownership or control within 10 days.

          This bill would also prohibit an online data broker from  
          charging a fee to a subject individual who elects to review or  
          remove his or her personal information from the broker's  
          database, and would also allow aggrieved individuals to recover  
          either actual or statutory damages ($1,000 per violation) for  
          violations of the bill's requirements.

                                      BACKGROUND  

          The advent of inexpensive computer storage and the increased  
          power and sophistication of computer processing technology have  
          unleashed a revolution in data acquisition and analysis in just  
          about every field.  "Algorithms that predict stock-price  
          movements have transformed Wall Street," and "[a]lgorithms that  
          chomp through our Web histories have transformed marketing."   
          (Peck, They're Watching You at Work (Dec. 2013) The Atlantic  
           (as of April 10, 2014).)  "The range  
          and depth of information that's routinely captured about how we  
          behave" has also greatly increased in recent years.  (Id.)   
          "Ordinary people at work and at home generate much of this data,  
          by sending e-mails, browsing the Internet, using social media,  
          working on crowd-sourced projects, and more," and according to  
          one estimate "more than 98 percent of the world's information is  
          now stored digitally, and the volume of that data has quadrupled  
          since 2007."  (Id.)  "By combining the power of modern computing  
          with the plentiful data of the digital era," data analytics  
          "promises to solve virtually any problem - crime, public health,  
          the evolution of grammar, the perils of dating - just by  
          crunching the numbers."  (Marcus and Davis, Eight (No, Nine!)  
          Problems With Big Data (Apr. 6, 2104) New York Times  
           (as of April 10,  
          2014).)

          The growth of data acquisition and analysis in the marketing  
          economy has been no less revolutionary.  What was once limited  
          to customer lists and basic information contained in public  
          records (e.g. mailing addresses, property tax records, etc.) and  
          sales records (e.g. credit card purchase histories), companies  
          and marketing firms can now collect, analyze, package, and sell  
          precise information about individuals across a wide range of  
          data points.  According to one analyst, with the help of new  
          technology, companies in the marketing economy are now able to:

            collect and sell information to marketers on everything from  
            your marital status, whether you might be pregnant or have a  
            newborn, have cancer, are trying to lose weight, are gay or  
            straight, how much you make, what credit cards you use, your  
            lines of credit, where you live, what your house cost, what  
            kind of car you drive or if you might be looking to buy a new  
            one, your race, occupation, political leanings, education  
            level, have one or more children in college, have pets to what  
            your hobbies are and more - much more.  (Armerding, Data  
            Brokers' Collection of Internet Activity Data Raises Privacy  
            Issues (Nov. 7, 2013) CSO Online   
            (as of April 10, 2014).)

          Indeed, one marketing company claims that it "has, on average,  
          1,500 pieces of information on more than 200 million Americans."  

                                                                      




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           (Kroft, The Data Brokers: Selling Your Personal Information  
          (Mar. 9, 2014) CBS News  
           (as of April 10, 2014).)  The data marketing  
          economy has also swelled in economic impact, contributing as  
          much as $156 billion annually to the national economy, according  
          to a recent industry report.  (See Deighton and Johnson, The  
          Value of Data: Consequences for Insight, Innovation, and  
          Efficiency in the U.S. Economy (2013).)

          Some marketing companies and other participants in the data  
          industry, colloquially known as "data brokers," aggregate and  
          sell large volumes of information from their databases to third  
          parties over the internet without the direct knowledge or  
          consent of the individuals to whom the data pertains ("subject  
          individuals").  Several organizations have publicly raised  
          privacy concerns over the practice of buying and selling  
          personal information over the Internet without the subject  
          individual's knowledge or consent.  One recent news article  
          describes the potentially sensitive nature of the personal  
          information offered for sale by online data brokers:

            We were able to go online and find all sorts of companies  
            peddling sensitive personalized information.  A Connecticut  
            data broker called "Statlistics" advertises lists of gay and  
            lesbian adults and "Response Solutions" -- people suffering  
            from bipolar disorder.  "Paramount Lists" operates out of . .  
            . Erie, Pa., and offers lists of people with alcohol, sexual  
            and gambling addictions and people desperate to get out of  
            debt.  A Chicago company, "Exact Data," is brokering the names  
            of people who had a sexually transmitted disease, as well as  
            lists of people who have purchased adult material and sex  
            toys.  (Kroft, The Data Brokers: Selling Your Personal  
            Information (Mar. 9, 2014) CBS News  
             (as of April 10, 2014).)  

          This bill would require online data brokers that sell the  
          personal information of California residents over the Internet  
          to allow subject individuals to review personal information  
          pertaining to them that has been collected, assembled, or  
          maintained by the online data broker.  The bill would also  
          require an online data broker to permanently remove a subject  
          individual's personal information from its database and all  
          Internet Web sites owned or controlled by it upon written  

                                                                      




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          request, and would prohibit an online data broker from charging  
          a fee to a subject individual who requests to review or remove  
          his or her personal information.  This bill would also allow an  
          aggrieved individual to recover actual or statutory damages and  
          attorney's fees and costs from an online data broker that  
          violates the bill's terms.

                                CHANGES TO EXISTING LAW
           
           Existing law  provides that, among other rights, all people have  
          an inalienable right to pursue and obtain privacy.  (Cal.  
          Const., art. I, Sec. 1.)

           Existing case law  permits a person to bring an action in tort  
          for an invasion of privacy and provides that in order to state a  
          claim for violation of the constitutional right to privacy, a  
          plaintiff must establish the following three elements: (1) a  
          legally protected privacy interest; (2) a reasonable expectation  
          of privacy in the circumstances; and (3) conduct by the  
          defendant that constitutes a serious invasion of privacy.  (Hill  
          v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1.)   
          Existing law recognizes four types of activities considered to  
          be an invasion of privacy giving rise to civil liability,  
          including the public disclosure of private facts.  (Id.)

           Existing federal law  , the Gramm-Leach-Bliley Act, permits  
          financial institutions to share nonpublic customer information  
          with non-affiliated third parties, unless the consumer "opts  
          out" of such disclosure.  The Act requires privacy statements to  
          be disclosed by financial institutions and restricts their  
          ability to disclose non-public personal information about  
          consumers to third parties.  (15 U.S.C. Sec. 6801, et seq.)

           Existing law  requires an operator of a commercial Web site or  
          online service that collects personally identifiable information  
          through the Internet about individual consumers residing in  
          California who use or visit its Web site to conspicuously post  
          its privacy policy.  (Online Privacy Protection Act of 2003,  
          Bus. & Prof. Code Sec. 22575.)

           Existing law  requires a business with an established business  
          relationship with a customer that has, within the preceding  
          calendar year, disclosed specified personal information about  
          the customer to third parties for direct marketing purposes to,  
          after the receipt of a written request, disclose to the customer  

                                                                      




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          free of charge the categories of personal information disclosed  
          to third parties for direct marketing purposes, the names and  
          addresses of all third parties that received the personal  
          information, and, if not reasonably discernable by the name,  
          examples of the products or services marketed by the third  
          parties.  (Civ. Code Sec. 1798.83.)

           This bill  would provide that an online data broker that sells  
          personal information of any resident of California to a third  
          party shall permit a subject individual to review his or her  
          personal information that has been collected, assembled, or  
          maintained by the online data broker, either by submitting a  
          written request or by means of an electronic search through a  
          secure online system.

           This bill  would provide that unless prohibited by federal law,  
          an online data broker shall conspicuously post an opt-out notice  
          on its Internet Web site, which shall include specific  
          instructions for permanently removing personal information from  
          the online data broker's database, by making a written demand  
          requesting to have the information removed.  This bill would  
          further provide that if a subject individual makes a written  
          demand to remove his or her personal information from an online  
          data broker's database, the online data broker shall permanently  
          remove the subject individual's personal information from its  
          database.

           This bill  would provide that, unless prohibited by federal law,  
          an online data broker that receives a written demand from a  
          subject individual shall remove the individual's personal  
          information from public display on the Internet within 10 days  
          of delivery of the written demand, and shall ensure that this  
          information is not reposted on the same Internet Web site, a  
          subsidiary site, or any other Internet Web site owned,  
          controlled, or maintained by the online data broker receiving  
          the written demand.  This bill would further provide that after  
          receiving a subject individual's written demand, the online data  
          broker shall not transfer the subject individual's personal  
          information to any other person, business, or association  
          through any other medium.

           This bill  would state that it is unlawful for an online data  
          broker to solicit or accept the payment of a fee or other  
          consideration to review or permanently remove personal  
          information from the online data broker's database, and would  

                                                                      




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          provide that each payment solicited or accepted in violation of  
          this bill constitutes a separate violation.

           This bill  would provide that in addition to any other sanction,  
          penalty, or remedy provided by law, a subject individual may  
          bring a civil action in any court of competent jurisdiction  
          against any person in violation of this chapter for damages in  
          an amount equal to the greater of one thousand dollars ($1,000)  
          per violation or the actual damages suffered by the subject  
          individual as a result, along with costs, reasonable attorney's  
          fees, and any other legal or equitable relief.

           This bill would provide that its provisions shall only apply to  
          personal information that is collected, assembled, or maintained  
          by an online data broker after January 1, 2015, but,  
          notwithstanding this limitation, shall also apply to information  
          collected, assembled, or maintained by an online data broker  
          prior to January 1, 2015, if the data broker collected,  
          assembled, or maintained the information in violation of any law  
          or regulation.
          
           This bill  would define the following terms:
           "Online data broker" means a commercial entity that collects,  
            assembles, or maintains personal information concerning  
            individuals residing in California who are not customers or  
            employees of that entity, for the purposes of selling the  
            personal information over the Internet to a third party.
           "Personal information" means any information that identifies,  
            relates to, describes, or is capable of being associated with,  
            a particular individual, including, but not limited to, his or  
            her name, signature, social security number, physical  
            characteristics or description, address, telephone number,  
            passport number, driver's license or state identification card  
            number, insurance policy number, education, employment,  
            employment history, bank account number, credit card number,  
            debit card number, or any other financial information, medical  
            information, or health insurance information.  "Personal  
            information" does not include information that is lawfully  
            made available to the general public from federal, state, or  
            local government records.
           "Subject individual" means the person to whom personal  
            information pertains.

                                        COMMENT
           

                                                                      




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          1.  Stated need for the bill  
          
          The author writes:
            
            Current law requires [W]ebsites that collect private  
            information to disclose their privacy policy in a  
            conspicuously available place, as defined in Business &  
            Professions Code Section 222575.  However, current law means  
            that consumers are implicitly agreeing to the terms of the  
            privacy policy simply by visiting the [W]ebsite, regardless of  
            whether they even visit the privacy policy page.  Consumers do  
            not have the ability to modify or opt out of privacy policies.  
             Further, consumers do not have an awareness of what personal  
            information data brokers possess, sell or otherwise share with  
            third parties.

            68 [percent] of US internet users feel that current laws are  
            not good enough in protecting people's privacy online, and  
            that 86 [percent] of users have taken steps online to remove  
            or mask their digital footprint.  SB 1348 seeks to update the  
            California laws to reflect the consumer's right to personal  
            privacy in an evolving online landscape. 

          2.  Fundamental Right to Privacy  

          This bill seeks to strengthen California consumers' ability to  
          exercise control over their digital footprint and to retain some  
          measure of privacy online.  Staff notes that the right to  
          privacy is a fundamental right protected by Section 1 of Article  
          I of the California Constitution.  This bill would build upon  
          that fundamental right by providing California residents with  
          tools to review, correct, and remove personal information from  
          databases and Web sites owned or controlled by online data  
          brokers that offer their personal information for sale.  The  
          bill would also prohibit online data brokers from charging a fee  
          for permitting consumers to exercise control over their personal  
          information, and would allow an aggrieved individual to recover  
          actual or statutory damages and attorney's fees and costs from  
          an online data broker that violates the bill's terms.

          Writing in support of the bill, Privacy Rights Clearinghouse  
          states:

            Over the past several years, hundreds of consumers have  
            contacted the Privacy Rights Clearinghouse with their concerns  

                                                                      




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            about online data brokers.  These sites can be particularly  
            troublesome for victims of stalking and domestic violence, law  
            enforcement personnel, victims of identity theft, even urban  
            school teachers and social workers.  Unfortunately, many  
            consumers find it difficult to effectively remove their  
            information from online data broker sites.  Some of the issues  
            that consumers encounter include data brokers that do not  
            offer a method of opting out, that offer an opt out for only a  
            limited time, requiring renewal[,] or that charge a fee to  
            suppress information from their databases.  Many data brokers  
            require individuals to provide a significant amount of  
            personal information to opt out, which individuals fear will  
            be used to enlarge their data profile.  Sometimes, personal  
            information that has been removed from a database is re-posted  
            online at a later date when the company downloads a new batch  
            of information.  

          3.  Free Speech

           The First Amendment to the U.S. Constitution and Article 1,  
          Section 2 of the California Constitution protect the right of  
          every person to "freely speak, write and publish his or her  
          sentiments on all subjects, being responsible for the abuse of  
          this right."  (Cal. Const. art. 1, Sec. 2.)  The U.S. Supreme  
          Court has held that "the creation and dissemination of  
          information are speech within the meaning of the First Amendment  
          . . . Facts, after all, are the beginning point for much of the  
          speech that is most essential to advance human knowledge and to  
          conduct human affairs."  (Sorrell v. IMS Health Inc. (2011) 131  
          S. Ct. 2653, 2667 [citations omitted].)  Personal information  
          collected, aggregated, maintained, and ultimately sold by online  
          data brokers could arguably be viewed as "facts" for the purpose  













                                                                      




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          of the First Amendment's free speech clause.<1>  However, this  
          does not mean that the restrictions imposed by this bill are  
          likely to run afoul of an online data broker's presumptive right  
          to engage in constitutionally protected speech.

          In commercial speech cases - those involving "expression related  
          solely to the economic interests of the speaker and its  
          audience" - the Supreme Court has developed a four-part test for  
          determining when the government may regulate speech commensurate  
          with the First Amendment.  (Cent. Hudson Gas & Elec. Corp. v.  
          Public Serv. Comm'n (1980) 447 U.S. 557, 561.) 

            At the outset, we must determine whether the expression is  
            protected by the First Amendment.  For commercial speech to  
            come within that provision, it at least must concern lawful  
            activity and not be misleading.  Next, we ask whether the  
            asserted governmental interest is substantial.  If both  
            inquiries yield positive answers, we must determine whether  
            the regulation directly advances the governmental interest  
            asserted, and whether it is not more extensive than is  
            necessary to serve that interest.  (Id., 447 U.S. 557, 566.)

          Applied to the bill at hand, it is clear that the State has a  
          substantial governmental interest in regulating the  
          ---------------------------
          <1> But see Sorrell v. IMS Health Inc. (2011) 131 S. Ct. 2653,  
          2675, 2685 (Breyer, J., dissenting):

            Since ordinary regulatory programs can affect speech,  
            particularly commercial speech, in myriad ways, to apply a  
            "heightened" First Amendment standard of review whenever such  
            a program burdens speech would transfer from legislatures to  
            judges the primary power to weigh ends and to choose means,  
            threatening to distort or undermine legitimate legislative  
            objectives.
            . . .

            The Court reaches its conclusion [in Sorrell] . . . without  
            taking full account of the regulatory context, the nature of  
            the speech effects, the values these First Amendment  
            categories seek to promote, and prior precedent.  At best the  
            Court opens a Pandora's Box of First Amendment challenges to  
            many ordinary regulatory practices that may only incidentally  
            affect a commercial message.  At worst, it reawakens Lochner's  
            pre-New Deal threat of substituting judicial for democratic  
            decisionmaking where ordinary economic regulation is at issue.

                                                                      




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          dissemination of personal information about California  
          residents.  As noted above, privacy is a fundamental right in  
          the State of California, and the unrestricted distribution of  
          personal information by online data brokers threatens the  
          integrity of this fundamental right.  While it is ultimately an  
          issue for the courts, staff notes that this bill appears to be  
          narrowly tailored to advance the State's fundamental interest in  
          preserving the right of privacy of its citizens.  By granting  
          subject individuals a certain modicum of control over the  
          personal information held by online data brokers, this bill  
          would allow subject individuals to act to preserve their  
          fundamental right to privacy.  This bill includes a number of  
          conditions to ensure that its restrictions go no further than  
          necessary to preserve this fundamental right, including limiting  
          its scope only to personal information offered for sale in the  
          marketplace, and only to personal information that pertains to  
          the subject individual.
           
           4.  Correcting Erroneous Data

           Staff notes that this bill would allow subject individuals to  
          review personal information held by online data brokers, and  
          would give these individuals the option to have their personal  
          information removed from a broker's Web site and database.  The  
                                                                          bill is silent, however, on the ability of subject individuals  
          to correct their personal information.  Several observers note  
          that the personal information held by online data brokers may be  
          wildly inaccurate.  Julia Angwin, an investigative reporter,  
          received access to review data held by certain brokers  
          pertaining to her and made the following observation:

            What was shocking about it was that it ranged from incredibly  
            precise - every single address I'd ever lived at including the  
            number on my dorm room in college, which I couldn't even  
            remember . . . to very imprecise, inaccurate things . . . that  
            were not at all true - that I was a single mother . . . with  
            no college education living in a place I didn't live.  (If You  
            Think You're Anonymous Online, Think Again (Feb. 24, 2014) NPR  
             (as  
            of April 11, 2014).)

          Although many individuals may simply want data brokers to delete  
          their personal information, some may actually want to correct  
          inaccurate data in order to enjoy the marketing advantages this  

                                                                      




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          industry offers to consumers, including "lower prices, free  
          online content, advertising that is much more relevant to  
          individuals, quicker and easier transactions, niche products you  
          might not otherwise be able to find and what you want when you  
          want it."  (Armerding, Data Brokers' Collection of Internet  
          Activity Data Raises Privacy Issues (Nov. 7, 2013) CSO Online  
           (as of April 10, 2014)  
          [quotation marks omitted].)

          To allow subject individuals an opportunity to correct  
          inaccurate data, the author offers the following amendment:

                Author's Amendment  :

               On page 4, strike line 11 and insert: "system; and (b)  
               permit a subject individual to correct his or her personal  
               information that has been collected, assembled, or  
               maintained by the online data broker, either by submitting  
               a written request or by correcting the information by means  
               of a secure online system."
           
           5.  Proving Identity to Review or Opt Out

           Among other things, this bill would expressly permit subject  
          individuals to both review and have their personal information  
          removed from an online data broker's database and all Web sites  
          under the broker's ownership or control.  Some commentators note  
          that certain data brokers require individuals "who want[] to  
          view their own data to provide identification through sensitive  
          personal information including part of a Social Security number,  
          a copy of their driver's license, [and/or] a current utility  
          bill or a check." (Armerding, Data Brokers' Collection of  
          Internet Activity Data Raises Privacy Issues (Nov. 7, 2013) CSO  
          Online (as of April 10, 2014).)  This is particularly concerning  
          to some consumers because the authentication information these  
          brokers require is "also used by criminals for identity theft."   
          (Id.)  Further, consumers have no guarantee that a broker will  
          delete the submitted information once their identity is  
          confirmed and won't use it to further enhance the collection of  
          personal information in their database or on their Web site.

          To address reservations about submitting further personal  
          information to online data brokers as part of a data review or  

                                                                      




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          opt out process, the author offers the following amendment:

             Author's Amendment  :

            On page 4, between lines 36 and 37, insert: "(3) Any  
            additional information collected by an online data broker to  
            confirm the identity of a subject individual who has made a  
            written request to remove his or her personal information from  
            a database pursuant to this title shall be deleted after the  
            identity of the subject individual has been confirmed and  
            shall not be used for any other purpose."
           
           6.  Regulatory Takings

          The Federal Constitution provides that "private property [shall  
          not] be taken for public use, without just compensation" (U.S.  
          Const. Amend. V.), and the California Constitution similarly  
          provides that private property "may be taken or damaged for  
          public use only when just compensation, ascertained by a jury  
          unless waived, has first been paid to, or into court for, the  
          owner" (Cal. Const. art. I, Sec. 19(a).).  In Ruckelshaus v.  
          Monsanto (1984) 467 U.S. 986, a leading federal court case on  
          regulatory takings, the U.S. Supreme Court held that the  
          disclosure of certain trade secret data submitted by a pesticide  
          manufacturer to third parties by the Environmental Protection  
          Agency (EPA) was a "taking" of property without just  
          compensation under the Fifth Amendment.  Generally, whether a  
          taking can be said to have occurred is "an ad hoc, factual  
          inquiry."  (Ruckelshaus, 467 U.S. at 1005 [citation omitted].)   
          In the context of evaluating a takings claim concerning  
          commercial data (like trade secrets), the Supreme Court has  
          articulated three factors for consideration: (1) the character  
          of the governmental action, (2) its economic impact, and (3) its  
          interference with reasonable investment-backed expectations.   
          (See Ruckelshaus, 467 U.S. at 1005 [citation omitted].)

          Staff notes that the law concerning ownership of and control  
          over personal information is not fully settled in California.   
          Consumers may be able to assert ownership and control rights  
          over personal information in certain circumstances based on  
          their direct and intimate connection to it, but in other  
          situations online data brokers may be able to assert a right of  
          ownership or control to this data because they either expended  
          resources to gather it or purchased it on the open market.  If  
          an online data broker is able to prove that it has a property  

                                                                      




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          right in someone else's personal information, a state law that  
          conveys a right of ownership or control over that information to  
          another person (e.g. the subject individual) could potentially  
          effect a taking of private property.

          However, even if a reviewing court were to find that an online  
          data broker could have a property interest in the personal  
          information of another, this bill has been drafted so as to  
          eliminate the possibility that its provisions could effect a  
          taking.  By its terms, the bill would only apply to personal  
          information that is collected, assembled, or maintained by an  
          online data broker after January 1, 2015, and personal  
          information collected, assembled, or maintained by an online  
          data broker prior to January 1, 2015, if the information was  
          collected, assembled, or maintained in violation of any law or  
          regulation.  These limitations effectively negate the  
          possibility that this bill could effect a regulatory taking.  An  
          individual cannot have a reasonable investment-backed  
          expectation in purchasing or assembling data that they  
          prospectively know will be subject to the control of another,  
          nor can an individual have a reasonable investment-backed  
          expectation in data that was obtained illegally.  Consequently,  
          it is unlikely that this bill would result in the taking of  
          property under the criteria articulated by the Supreme Court in  
          Ruckelshaus.

          7.  Conflict with Federal or State Law

           Several federal statutes regulate the collection, assembly,  
          maintenance, and dissemination of consumer data that would fall  
          within this bill's definition of "personal information."  For  
          example, the Fair Credit Reporting Act (15 U.S.C. Sec. 1681, et  
          seq.), which regulates how consumer reporting agencies use  
          personal and financial information, contains detailed provisions  
          addressing when consumer data can be accessed and for what  
          purposes, as well as procedures for reviewing, correcting, and  
          deleting personal information.  In order to avoid a conflict  
          with existing federal law, this bill expressly provides in each  
          of its operative sections that its terms apply "unless  
          prohibited by federal law."

          Staff notes that California law similarly has several statutes  
          that regulate the collection and dissemination of consumer data  
          that would likely fall within this bill's definition of personal  
          information.  For example, California's Financial Information  

                                                                      




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          Privacy Act (Fin. Code Sec. 4050, et seq.) prohibits the  
          disclosure of certain nonpublic personal information, including  
          financial information, to third parties without the explicit  
          prior consent of the consumer to whom the information relates.   
          In order to avoid a conflict with this and other existing state  
          law prohibiting the collection and dissemination of personal  
          information, and to further avoid potential conflicts with  
          federal law, the author offers the following amendments:




             Author's Amendments  :

            On page 4, line 5, strike existing text and replace with:  
            "22591.   Unless prohibited by federal or state law, an online  
            data broker that sells or offers for sale the"

            On page 4, line 13, after "federal" insert "or state"

            On page 4, line 24, after "federal" insert "or state"
           
           8.  Retention of Data for Law Enforcement  

          In certain situations, an online data broker may be prohibited  
          from removing the personal identifying information of a subject  
          individual when that information is part of a law enforcement  
          action.  For example, under the Stored Communications Act of  
          1986 (18 U.S.C. Sec. 2701, et seq.), a valid subpoena issued in  
          connection with an official criminal investigation or an order  
          from a court of competent jurisdiction may compel an online data  
          broker to preserve or disclose personal identifying information  
          to law enforcement authorities irrespective of the subject  
          individual's request that such information be removed from the  
          broker's database or Web site.   This bill does not run afoul of  
          federal or state data retention requirements because it  
          explicitly provides that an online data broker is not required  
          to modify or remove a subject individual's personal information  
          from its database or Web sites if to do so would violate federal  
          or state law.

          9.    Opposition to Prior Version of this Bill  

          Staff notes that the California Association of Licensed  
          Investigators (CALI) submitted a letter of opposition to a prior  

                                                                      




          SB 1348 (DeSaulnier)
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          version of this bill.  CALI expressed concern that a  
          notification requirement contained in the prior version could  
          "prevent effective investigations that are critical to safety of  
          individuals at their homes and in their workplaces, as well as  
          the ability of businesses to fight workers' compensation fraud  
          and combat counterfeit products, among other important  
          investigations."  While CALI has yet to indicate whether they  
          remain opposed to this bill, staff notes that the notification  
          provision to which they objected has been removed, and it  
          appears that recent amendments to the bill effectively address  
          the concerns raised in their letter.

          10.   Clarifying Amendments  

          The author offers the following clarifying amendments:

            On page 3, line 20, after the word "selling" add "or offering  
            for sale"

            On page 4, line 7, strike the word "shall" and insert "shall:  
            (a)"


           Support  :  Privacy Rights Clearinghouse

           Opposition  :  California Association of Licensed Investigators

                                        HISTORY
           
           Source  :  Author

           Related Pending Legislation  :

          SB 501 (Corbett, 2014) would require a social networking  
          Internet Web site to remove specified personal identifying  
          information of any registered user that is accessible online  
          within 96 hours after the registered user's request and would  
          also require removal of personal information in that same manner  
          regarding a user under 18 years of age upon request by the  
          user's parent or legal guardian.  This bill is in the Assembly  
          Committee on Arts, Entertainment, Sports, Tourism, and Internet  
          Media.

          SB 1027 (Hill, 2014) would prohibit the solicitation or  
          acceptance of a fee to remove, correct, or modify a booking  

                                                                      




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          photograph posted online.  This bill would exempt a public  
          entity from that prohibition, and would provide that an  
          individual who brings an action for a violation may recover  
          damages, costs, and reasonable attorney's fees.  This bill  
          passed out of the Senate Judiciary Committee on a vote of 7-0.

          SB 1177 (Steinberg, 2014) would prohibit an operator of an  
          Internet Web site, online service, online application, or mobile  
          application with actual knowledge that the site, service, or  
          application is used for K-12 school purposes and was designed  
          and marketed for K-12 school purposes from using, sharing,  
          disclosing, or compiling personal information about a K-12  
          student for commercial purposes.  This bill is in the Senate  
          Judiciary Committee.

           Prior Legislation  :

          AB 257 (Hall, 2013) would have required that privacy policies  
          identify the uses and retention periods for each category of  
          personally identifiable information collected by the operator of  
          a Web site or online service, as well as describe the process  
          the operator maintains for allowing an individual consumer to  
          review and request changes to any of his or her personally  
          identifiable information.  The bill would also have required the  
          operator of a Web site or online service to use reasonable  
          security safeguards to protect personally identifiable  
          information from unauthorized access, use, disclosure,  
          modification, or destruction, and to describe these safeguards  
          in its privacy policy.  This bill died in the Assembly Judiciary  
          Committee.

          SB 568 (Steinberg, Ch. 336, Stats. 2013) requires the operator  
          of an Internet Web site, online service, online application, or  
          mobile application to permit a minor, who is a registered user  
          of the operator's Internet Web site, online service, online  
          application, or mobile application, to remove, or to request and  
          obtain removal of, content or information posted on the  
          operator's Internet Web site, service, or application by the  
          minor, unless the content or information was posted by a 3rd  
          party, any other provision of state or federal law requires the  
          operator or 3rd party to maintain the content or information, or  
          the operator anonymizes the content or information.

          AB 1291 (Lowenthal, 2013) would have required any business that  
          retains a customer's personal information, as defined, or  

                                                                      




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          discloses that information to a third party, to provide at no  
          charge, within 30 days of the customer's specified request, a  
          copy of that information to the customer as well as the names  
          and contact information for all third parties with which the  
          business has shared the information during the previous 12  
          months, regardless of any business relationship with the  
          customer.  This bill died in the Assembly Judiciary Committee.

          SB 761 (Lowenthal, 2012) would have required the Attorney  
          General to adopt regulations that would require online  
          businesses to provide California consumers with a method for the  
          consumer to opt out of the collection or use of his or her  
          information by the business.  This bill died in the Senate  
          Appropriations Committee.

          SB 550 (Speier, 2005) would have prohibited an Internet service  
          provider or electronic mail service provider from making  
          available to any other person or provider, without prior written  
          consent, specified information relating to a consumer, including  
          the contents of any e-mail sent or received, personal e-mail  
          patterns, credit or other personal financial information,  
          services purchased, and demographic information, as specified.   
          The bill would have authorized a consumer injured by a violation  
          of these provisions to institute a civil action to recover  
          damages.  This bill was gutted and amended in the Assembly to  
          address a different subject.

          SB 27 (Figueroa, Ch. 505, Stats. 2003) requires businesses that  
          disclose a customer's personal information, as specified, to a  
          third party for direct marketing purposes to provide the  
          customer, within 30 days after the customer's request, in  
          writing or by e-mail the names and addresses of the recipients  
          of that information and specified details regarding the  
          information disclosed.

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