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The California Consumer Privacy Act of 2018: How Can Businesses Use Consumer Data?

January/February 2019 - Nutrition Industry Executive
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While the term “data privacy” may evoke memories of the Cambridge Analytica scandal, a new California law will affect industries far outside of Silicon Valley. Our industry is no exception.

The health, wellness and supplement market is highly fragmented. Small and large-scale vendors compete for greater market share in an industry where the top five branded dietary supplement manufacturers, together, hold less than a quarter of overall market share. The bulk of supplement sales occur online. According to a recent article in the Wall Street Journal, the global conversion rate for online shopping is only 2.86 percent. To succeed in such a highly competitive environment, many players seek more data about prospective and actual customers as they pursue increased online conversion and consumer loyalty. But more information also means more risk.

In a matter of only a few days last June, California legislators drafted a rushed data privacy framework behind closed doors called the California Consumer Privacy Act (CCPA). When the news broke, many hoped it would mirror the terms of the European Union’s General Data Protection Regulation (GDPR) governing use and collection of E.U. citizens’ personal information, making global data privacy compliance requirements uniform. While the California law shares common concepts with the GDPR, it imposes different requirements. As businesses just begin to recover from their estimated $8 billion efforts to comply with the GDPR, they must now determine what impact the CCPA will have on their operations and plan for additional expenditures in this burgeoning global patchwork of somewhat amorphous privacy laws. Although the CCPA does not become operative until January 1, 2020, the time to start planning for it is now.

Read the article here.

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