Navigating California Data Privacy Laws: A Comprehensive Guide for In-House Counsel

California in-house counsel face board demands, tight deadlines, and the tangled maze of California data privacy laws. For any in-house lawyer, it is clear that the California Privacy Rights Act (CPRA) fines bite hard. However, compliance builds trust with your clients and partners. 

This guide offers clear CPRA legal insights to help in-house counsel stay compliant. Gain practical tools, up-to-date strategies, and a competitive edge in California data privacy.

Why California Data Privacy Laws Demand Your Focus

For any in-house counsel, California’s enhanced privacy laws demand attention because businesses may face fines of up to $7,988 per intentional violation. Recent enforcement actions underscore that this is no paper tiger.

This year, Honda was fined $632,500 for imposing excessive verification demands on consumers exercising their rights. Similarly, Todd Snyder, Inc. faced a $345,178 penalty for failing to honor opt-out requests.

The California Privacy Rights Act (CPRA), effective January 1, 2023 (Cal. Civ. Code § 1798.140), applies to businesses that meet any one of the following criteria:

• Have annual gross revenues exceeding $25 million,
• Buy, sell, or share the personal information of 100,000 or more consumers or households,
• Derive 50% or more of annual revenues from selling or sharing personal information.

To keep in line, once you’ve confirmed whether CPRA applies based on revenue and data thresholds, the next critical step is to map your data flows—an essential move to uncover privacy risks and prevent leaks before regulators do.

CPRA Compliance Priority Matrix

Mastering CPRA Obligations with Consumer Rights at the Core

The California Privacy Rights Act (CPRA) significantly expands consumer privacy rights, granting Californians the ability to:

• Access
• Delete
• Correct
• Limit the use of sensitive personal information (SPI) such as health data or racial information.

Consumers can also opt out of automated decision-making processes, and businesses must respond to such requests within 45 days, with a possible 45-day extension if necessary. 

Verifying consumer identity remains a critical compliance challenge, and enforcement actions such as the 2025 Honda fine highlight the risks of improper verification procedures. To mitigate these risks, the in-house counsel compliance team can advocate for automated, streamlined verification tools that balance security with consumer accessibility.

Key Business Responsibilities under the CPRA

• Posting clear, transparent privacy notices at or before data collection points, detailing categories of personal information collected and consumers’ rights.
• Protecting sensitive personal information through robust security measures.
• Conducting risk assessments and cybersecurity audits, especially for high-risk processing activities, as mandated by the 2024 regulatory amendments.
• Implementing straightforward, user-friendly opt-out mechanisms.
• Forming a dedicated privacy team to manage consumer requests and ensure ongoing compliance.

Taming Automated Decision-Making Technology (ADMT) and Why it Matters

Automated Decision-Making Technology (ADMT), which includes AI and machine learning systems used for decisions such as hiring, lending, or targeted advertising, is a hotspot for California’s privacy regulators. 

The California Privacy Protection Agency (CPPA) proposes comprehensive ADMT regulations currently open for public comment until June 2, 2025. These rules require businesses to provide clear pre-use notices to consumers.

Additionally, a business must grant consumers opt-out rights when ADMT is used to make “significant decisions” affecting consumers, such as eligibility for:

• Financial services
• Housing
• Employment
• Healthcare

Failure to offer these rights, such as a retailer running AI-driven ads without opt-out options, could provoke consumer backlash and regulatory penalties. Furthermore, transparency and consumer control are as crucial as the underlying technology itself.

Steps to Take for ADMT In-house Counsel Compliance 

Proactively addressing these requirements, in-house counsel help their organizations reduce legal risks, enhance consumer trust, and stay ahead of California’s pioneering approach to regulating automated decision-making. 

ADMT: Current vs. Proposed :

Steps to take include:

• Audit your AI systems to identify where ADMT is in use, focusing on decisions that substantially replace human judgment.
• Draft clear, accessible notices explaining how consumer data is used in automated decisions, bundled with existing privacy disclosures to streamline communication.
• Implement one-click opt-out mechanisms to empower consumers to easily refuse ADMT-driven decisions or profiling where applicable.
• Monitor CPPA updates closely as the regulatory framework is still evolving, with recent drafts narrowing the scope of ADMT and refining obligations to balance business feasibility with consumer protections.

Building Corporate Privacy Policies That Work with the CPRA

Your corporate privacy policies form the backbone of CPRA compliance. They must disclose how your business collects, uses, shares, and protects personal information, including sensitive personal information (SPI) such as health or racial data. 

Data security is equally critical. The Ponemon Institute reports that 65% of data breaches in 2024 resulted from misconfigured tools, including popular platforms like Salesforce. Even a single weak setting can lead to significant data spills, exposing your company to regulatory penalties and reputational harm.

How to Maintain Compliance and Consumer Trust

• Revise your privacy policies at least annually.
• Conduct quarterly audits of your data systems and security controls.
• Use resources like CEB Practitioner In-House to streamline policy creation and updates.

Rallying Stakeholders for Success

Under California privacy laws, your business remains liable for vendor errors. A 2024 survey found that 60% of general counsel reported vendor-related privacy issues. For example, your company may face fines due to a vendor’s data breach or penalties for the Video Privacy Protection Act (VPPA) for improper tracking. 

Weak vendor encryption or inadequate controls can expose your business to significant risk. Ensure all vendor contracts include CPRA-compliant data protection clauses.

Empower Your Colleagues

Human error caused 65% of data breaches in 2024, according to Ponemon. A single phishing click can unravel your organization’s entire corporate privacy policies and security posture. Train employees at least twice yearly using realistic scenarios, such as identifying phishing attempts. Regularly review vendor contracts and internal policies. 

Under the CPRA legal guidance, different sectors face unique challenges. So, look into your industry’s key challenges and ensure compliance.

Quick Compliance Checklist

• Update corporate privacy policies annually, incorporating CPRA rights and disclosures.
• Add CPRA-compliant clauses to vendor contracts.
• Train employees biannually on privacy and security best practices.
• Conduct quarterly system audits and risk assessments.
• Use CEB’s templates and training resources for streamlined compliance.

Navigate CPRA Laws with CEB Tools

Litigation and arbitration costs are rising, with mass arbitrations reportedly costing around $3,000 per claimant in complex privacy cases (industry estimates). Strong arbitration clauses can save millions by limiting costly disputes. 

CEB’s practitioner in-house compliance tools offer your team CPRA legal guidance, help you map data flows, train your team, and keep up with and stay ahead of federal and international trends like the GDPR. Schedule a demo today to minimize risk, ensure compliance, and drive better business outcomes.