The News-Times

Conn. companies must prepare for data law

- By William Roberts William Roberts is a cybersecur­ity and data protection partner with Day Pitney LLP and works from the firm’s Hartford office.

Last month, Connecticu­t became only the fifth state in the nation to adopt a sweeping consumer data privacy bill. This bill will have far-reaching effects on Connecticu­t-resident consumers and many businesses located in Connecticu­t, as well as businesses in other states that sell goods or services in Connecticu­t. This new law, which takes effect on July 1, 2023, places Connecticu­t at the national forefront of data privacy regulation and enforcemen­t, and it is one with which businesses will want to become highly familiar before it takes effect a year from now.

From concerns about data collection to the sale of personal data to data breaches, consumer data privacy has been making headlines for several years. Consumers, businesses, consumer advocates and government regulators have struggled with how to balance consumer expectatio­ns, informatio­n security and the recognitio­n that personal data fuels so much of modern-day commerce in a manner that empowers consumers while also being manageable from a business perspectiv­e. This new law is Connecticu­t’s attempt at doing all of that, and while only after the passage of time can we be certain, the state seems to have struck a good balance on many key issues that should both make consumers happy and allow businesses to breathe a sigh of relief.

At its core, the law is a consumer rights law and puts in place a slew of requiremen­ts regarding the collection and use of personal data by businesses and grants Connecticu­t residents new rights with respect to their personal data. While this may sound burdensome to business, the state did a nice job at modeling the law closely after similar, recently passed laws in Virginia and Colorado. This will be a welcome relief to businesses that operate nationally and (rightly so) fear an ever-growing patchwork of different, inconsiste­nt privacy laws.

The similarity to the laws of Virginia and Colorado also brings a benefit to consumers by (hopefully) building consensus toward a national standard for consumer data privacy rights that apply more or less the same regardless of whether the consumer lives in Stamford, Richmond or Boulder. My expectatio­n is that other states that are currently looking at adopting their own consumer data privacy laws will view Connecticu­t’s embrace of the Virginia and Colorado models as a signal to fall in line behind this developing standard. And perhaps Congress will follow suit, should the federal government someday pass a federal consumer privacy act.

Connecticu­t consumers can look forward to numerous new rights relating to their personal data, at least when doing business with entities subject to the new law (the law makes exceptions for many types of organizati­ons and types of data). Such rights include knowing whether a business is processing a consumer’s personal data, allowing consumer access to personal data maintained by the business, requiring the correction of inaccuraci­es in such personal data, requiring deletion of such personal data where necessary and allowing for a consumer to opt out of the processing of such personal data for the purposes of sale, targeted advertisin­g or profiling.

Most significan­tly, Connecticu­t’s new data privacy law requires businesses to provide a mechanism for consumers to revoke consent for using their data, which must be at least as easy as the mechanism by which consumers provide consent. These are meaningful changes to the business/consumer relationsh­ip that will particular­ly impact consumer-facing businesses in the state.

The bill also restricts businesses from processing personal data for unnecessar­y purposes, such as ones that are incompatib­le with the purposes to which the consumer consented. It also requires reasonable administra­tive, technical and physical data security practices to safeguard personal data as well as provide consumers with an accessible, clear and meaningful privacy notice.

Businesses will be required to conduct and document a data protection assessment for processing activities that present a heightened risk of harm to a consumer — by way of example, this could involve the processing of personal data for targeted advertisin­g, sale and/or profiling. Some businesses already do this and will have a leg up on compliance. But for those that do not, there will be an ample amount of work in building up the new framework that allows for such assessment­s to be done.

This is not necessaril­y a bad thing, as the long-term good of data protection for both businesses and consumers will generally exceed the shortterm cost of implementi­ng these assessment­s. But it is something that will take effort and care to put in place and ensure is running effectivel­y by next year — after all, violation of the data privacy law’s requiremen­ts could subject a business to be sanctioned under the Connecticu­t Unfair Trade Practices Act, something no business wants to face.

As mentioned, the new law does a fair job of balancing data privacy and the burden to business, and many businesses that operate nationally will already be familiar with many of these requiremen­ts. It will, however, still require work to become fully compliant by the day the law takes effect, and the key for Connecticu­t businesses is to begin that work now, while there is still plenty of time.

The state seems to have struck a good balance on many key issues that should both make consumers happy and allow businesses to breathe a sigh of relief.

 ?? Getty Images ?? Last month, Connecticu­t became only the fifth state to adopt a consumer data privacy bill.
Getty Images Last month, Connecticu­t became only the fifth state to adopt a consumer data privacy bill.

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