First online privacy law looms

But most companies already follow requirements of California's AB 68, experts say

By Jaikumar Vijayan

June 24, 2004 12:00 PM ET

Computerworld - The nation's first privacy law targeted specifically at online businesses will go into effect in California on July 1. But it's unlikely to cause many problems for companies, because most of the privacy requirements stipulated by the law are already in place at a majority of commercial Web sites.
The Online Privacy Act of 2003 (Calif. AB 68) was authored by Assembly member Joseph Simitian. Under the law, any online business that collects personally identifiable information from a California resident is required to do the following:

Post its privacy policies in a prominent manner on its Web site and identify the effective date.

Inform consumers of the different types of personally identifiable information that's being collected about them, including how the data will be used and shared.

Describe how individuals can request and make changes to their personal information.

Specify the process by which any changes to the company's privacy policies will be communicated to consumers.

"If you are going to collect personal information from people, you need to tell them what your privacy policies are and then honor that commitment," Simitian said.
The law is structured in such a manner that anyone can bring an "individual course of action" against companies that fail to comply with it, he said.
AB 68 is the first law to legally formalize something that most online businesses have been doing for some time anyway, said Christopher Pierson, a partner at Lewis and Roca LLP in Phoenix.
"It sets the bar specifically for online merchants," Pierson said. Previously, a consumer would have had to take action such as filing a complaint with the Federal Trade Commission or suing a company under unfair business practice laws to address an online privacy breach, he said.
From an IT standpoint, there is little companies have to change to comply with the law.
"Most companies doing business on the Web have privacy statements," said Kirk Herath, chief privacy officer at Nationwide Insurance Cos. in Columbus, Ohio. "They just need to make sure that their old statements contain all of the elements of the new requirements."
The bill isn't as "threatening" as some other California privacy laws, such as the SB 1386 database breach notification act and the pending SB 1279, which toughens the scope of SB 1386, said one user at a large financial services company who requested anonymity.
Part of the reason may be that the original online privacy bill had been watered down quite a bit before being passed, he said.
According to Simitian, there was strong industry opposition tothe bill over some of the initial provisions. The biggest concern had to do with a provision that required companies to maintain a history of their privacy policies. There was also considerable concern over the prospect of companies having to comply with a patchwork of policies if other states adopted such measures, he said.
Though AB 68 passed the state legislature in 2002, it was vetoed by then-governor Gray Davis. A revised version of the bill was approved in 2003.

Recommend Digg Twitter ShareThis

Email Print Send Feedback Reprints

Additional Resources

POLL RESULTS

Leading IT Pros Weigh In on Top IT Issues

Accelerate your knowledge of the IT world you inhabit by viewing the results of a series of polls taken by your IT peers. These polls of 100+ IT professionals each are available for full viewing. They cover key topics such as virtualization, processor performance, green IT, cloud computing and many others. Be a part of the buzz.

WHITE PAPER

For Best Results, Think Beyond the Box

Technology is complex. Keeping it running productively shouldn't be. To that end, you want to minimize the number of solutions needed in-house to simplify operations, maintenance, and support. Kodak offers a best-practices model. One company provides support for both scanner and software, for fast problem resolution without vendor finger-pointing. Download now!

WHITE PAPER

Accelerating the Path to Demand Intelligence with a Demand Signal Repository

Utilizing demand intelligence improves the precision of pricing, product assortments, channel/store placement, and promotion, which are all essential for sustainable revenue management performance. Learn more, download this free whitepaper today.

White Papers & Webcasts

Accelerate SSL Encrypted Applications
The amount of SSL traffic is growing in the enterprise. Because it is encrypted, it cannot be properly controlled and accelerated. Blue Coat...

Data Protection and Disaster Recovery with iSCSI and VMware
Data protection and disaster recovery are top of mind for any IT manager, and the challenges of complexity and cost remain as obstacles....

ESG Lab Field Audit
Many companies have successfully implemented Riverbed WAN optimization solutions within their Cisco networks. This ESG Lab Field Audit document explores the success that...

Usability Is Everything
Learn what sets Workday's HR and Payroll solutions apart from the competition....

Shape Your Apps Strategy to Reflect New SaaS Licensing and Pricing Trends
Why are smart companies choosing software-as-a-service? Find out in the complimentary Forrester Research report...

The Value of Real SaaS at Workday
Cost savings, speed to value, and innovation brought to the enterprise by Workday's software-as-a-service solutions for HR and Payroll....

Natural User Interface for Enterprise Applications
Learn how a revolutionary user interface can make a complex enterprise application so intuitive even casual users can jump right in....

SaaS at Flextronics, Inc.
Dave Smoley, CIO of Flextronics, discusses the real value of software-as-a-service and why he chose Workday for his HR solution....

A Truly Global HCM System
Learn about a system built with advanced object-oriented technology that support multi-national requirements and costs less to implement, maintain and upgrade....

Why Compliance Pays
This OnDemand webcast explores the relationship that firms with best compliance records have higher revenue, greater customer retention, lower financial losses from data...

All White Papers | All Webcasts