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The use of cookies on a website by a service provider is generally not deemed a 'sale' of personal information by CCPA, as long as which of the following conditions is met?
Answer : D
The California Consumer Privacy Act (CCPA) defines a 'sale' of personal information as any transfer or disclosure of personal information to another business or third party for monetary or other valuable consideration. However, the CCPA also provides some exceptions to this definition, such as:
If the consumer has directed the business to intentionally disclose the personal information or use the personal information to interact with a third party, provided the third party does not also sell the personal information.
If the business transfers the personal information to a service provider that is contractually prohibited from retaining, using, or disclosing the personal information for any purpose other than performing the services specified in the contract with the business.
If the business transfers the personal information to a third party as part of a merger, acquisition, bankruptcy, or other transaction in which the third party assumes control of all or part of the business, provided the information is used or shared consistently with the CCPA.
The use of cookies on a website by a service provider is generally not deemed a sale of personal information by the CCPA, as long as the information collected by the service provider is necessary to perform the services specified in the contract with the business, and the service provider does not further collect, sell, or use the personal information of the consumer except as necessary to perform the business purpose. One of the examples of a valid business purpose is to perform debugging to identify and repair errors that impair existing intended functionality.
Therefore, option D is the correct answer, as it describes a scenario where the use of cookies by a service provider is not a sale of personal information under the CCPA, assuming the service provider complies with the contractual obligations and does not further use or disclose the information.
Option A is incorrect, as it does not describe a valid exception to the definition of a sale. The third party that stores personal information to trigger a response to a consumer's request to opt in is not acting as a service provider, but as a separate entity that may have its own interest in the personal information. The consumer's request to opt in does not necessarily imply that the consumer has directed the business to disclose the personal information to the third party.
Option B is incorrect, as it does not describe a valid exception to the definition of a sale. The analytics cookies placed by the service provider may still constitute a sale of personal information, even if they cannot be linked to a particular consumer of that business. The CCPA defines personal information broadly to include any information that identifies, relates to, describes, is reasonably capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household. Therefore, the analytics cookies may still fall within the scope of personal information, and their use by the service provider may still be a sale, unless one of the exceptions applies.
Option C is incorrect, as it does not describe a valid exception to the definition of a sale. The service provider that retains personal information obtained in the course of providing the services specified in the agreement with the subcontractors is not acting as a service provider to the business, but as a separate entity that may have its own interest in the personal information. The agreement with the subcontractors does not necessarily imply that the business has authorized the service provider to retain, use, or disclose the personal information for any purpose other than performing the services specified in the contract with the business.
[IAPP CIPP/US Study Guide], Chapter 10: California Consumer Privacy Act, pp. 223-226.
Under the Driver's Privacy Protection Act (DPPA), which of the following parties would require consent of an individual in order to obtain his or her Department of Motor Vehicle information?
Answer : D
The Driver's Privacy Protection Act (DPPA) is a federal law that regulates the disclosure of personal information obtained by state departments of motor vehicles (DMVs). The DPPA prohibits DMVs and other entities that receive such information from DMVs from disclosing it to anyone without the express consent of the individual to whom the information pertains, unless the disclosure falls under one of the 14 exceptions listed in the statute.
Some of the exceptions that allow disclosure of personal information from DMV records without consent are:
For use by any government agency, including any court or law enforcement agency, in carrying out its functions, or any private person or entity acting on behalf of a government agency in carrying out its functions.
For use in connection with matters of motor vehicle or driver safety and theft; motor vehicle emissions; motor vehicle product alterations, recalls, or advisories; performance monitoring of motor vehicles, motor vehicle parts and dealers; motor vehicle market research activities, including survey research; and removal of non-owner records from the original owner records of motor vehicle manufacturers.
For use in the normal course of business by a legitimate business or its agents, employees, or contractors, but only to verify the accuracy of personal information submitted by the individual to the business or its agents, employees, or contractors; and if such information as so submitted is not correct or is no longer correct, to obtain the correct information, but only for the purposes of preventing fraud by, pursuing legal remedies against, or recovering on a debt or security interest against, the individual.
For use in connection with any civil, criminal, administrative, or arbitral proceeding in any federal, state, or local court or agency or before any self-regulatory body, including the service of process, investigation in anticipation of litigation, and the execution or enforcement of judgments and orders, or pursuant to an order of a federal, state, or local court.
For use in research activities, and for use in producing statistical reports, so long as the personal information is not published, redisclosed, or used to contact individuals.
For use by any insurer or insurance support organization, or by a self-insured entity, or its agents, employees, or contractors, in connection with claims investigation activities, antifraud activities, rating or underwriting.
For use in providing notice to the owners of towed or impounded vehicles.
For use by any licensed private investigative agency or licensed security service for any purpose permitted under this subsection.
For use by an employer or its agent or insurer to obtain or verify information relating to a holder of a commercial driver's license that is required under chapter 313 of title 49.
For use in connection with the operation of private toll transportation facilities.
For any other use specifically authorized under the law of the state that holds the record, if such use is related to the operation of a motor vehicle or public safety.
None of the exceptions above apply to the use of personal information from DMV records by marketers wishing to distribute bulk materials. Therefore, such use would require the consent of the individual to whom the information pertains, according to the DPPA. Hence, option D is the correct answer.
Option A is incorrect, as law enforcement agencies performing investigations are exempt from the consent requirement under the first exception.
Option B is incorrect, as insurance companies needing to investigate claims are exempt from the consent requirement under the sixth exception.
Option C is incorrect, as attorneys gathering information related to lawsuits are exempt from the consent requirement under the fourth exception.
[IAPP CIPP/US Study Guide], Chapter 8: Federal Privacy Laws, pp. 181-182.
Which of the following practices is NOT a key component of a data ethics framework?
Answer : A
Data governance: the policies, processes, and standards that govern how data is collected, used, stored, and shared within an organization.
Preferability testing: the process of assessing the potential impacts and risks of data-driven solutions on stakeholders, such as customers, employees, and society.
[IAPP CIPP/US Study Guide], Chapter 10, Section 10.4, page 287
[IAPP Glossary], Automated Decision-Making
IAPP Resources, Ethical Data Use and Automated Decision-Making: A Practical Guide
What was unique about the action that the Federal Trade Commission took against B.J.'s Wholesale Club in 2005?
Answer : B
The Federal Trade Commission (FTC) is the primary federal agency that enforces consumer privacy and data security laws in the United States. The FTC has the authority to bring enforcement actions against businesses that engage in unfair or deceptive acts or practices that affect commerce, under Section 5 of the FTC Act. Unfair acts or practices are those that cause or are likely to cause substantial injury to consumers that is not reasonably avoidable by consumers and is not outweighed by countervailing benefits to consumers or competition. Deceptive acts or practices are those that involve a material representation, omission, or practice that is likely to mislead consumers acting reasonably under the circumstances.
The FTC's action against B.J.'s Wholesale Club in 2005 was unique because it was based on matters of fairness rather than deception. The FTC alleged that B.J.'s Wholesale Club, a retailer that operates warehouse stores and gas stations, failed to provide reasonable security for the sensitive information of its customers, such as name, card number, and expiration date, that it collected from the magnetic stripes of credit and debit cards. The FTC claimed that this information was used by unauthorized persons to make millions of dollars of fraudulent purchases. The FTC did not allege that B.J.'s Wholesale Club made any false or misleading statements or omissions about its data security practices, but rather that its failure to take appropriate security measures was an unfair practice that violated Section 5 of the FTC Act. The FTC argued that B.J.'s Wholesale Club's lax security caused or was likely to cause substantial injury to consumers that was not reasonably avoidable by consumers and was not outweighed by any benefits to consumers or competition.
The FTC's action against B.J.'s Wholesale Club was one of the first cases in which the FTC used its unfairness authority to address data security issues, and it set a precedent for future enforcement actions against businesses that fail to protect consumer data. The settlement required B.J.'s Wholesale Club to implement a comprehensive information security program and obtain audits by an independent third-party security professional every other year for 20 years.Reference:
FTC Complaint, Paragraphs 1-23
FTC Agreement Containing Consent Order, Paragraphs 1-9
FTC Analysis of Proposed Consent Order to Aid Public Comment, Pages 1-3
[IAPP CIPP/US Study Guide], Pages 69-70
What is the purpose of a cure provision in a stale data privacy law?
Answer : A
A cure provision in state data privacy laws gives businesses an opportunity to remediate violations of the law within a specified timeframe after receiving notice of the alleged violation. This provision is intended to promote compliance rather than immediately imposing penalties or enforcement actions.
Key Aspects of Cure Provisions:
Notice and Cure Period:
Businesses are given a timeframe (e.g., 30 days) to address the alleged violation before formal enforcement actions are taken by state authorities.
Encouraging Compliance:
Cure provisions incentivize businesses to implement corrective actions and ensure compliance without incurring fines or penalties for minor or first-time violations.
State-Specific Examples:
The California Consumer Privacy Act (CCPA) initially included a 30-day cure provision, though it was later limited under the California Privacy Rights Act (CPRA).
Other state laws, such as Virginia's Consumer Data Protection Act (VCDPA), also include cure provisions.
Explanation of Options:
A. To allow a business a limited timeframe to fix alleged violations before facing enforcement: This is correct. Cure provisions are specifically designed to give businesses an opportunity to address violations before facing enforcement actions.
B. To allow consumers a period of time to discover their data has been mishandled: This describes consumer rights related to data breach notifications, not cure provisions.
C. To allow a state to initiate formal enforcement actions for a fixed time period: Cure provisions delay enforcement actions rather than initiate them.
D. To allow certain provisions of a law to expire after a defined time period: This describes sunset provisions, not cure provisions.
Reference from CIPP/US Materials:
CCPA and CPRA: Discuss the cure provisions and their role in enforcement.
IAPP CIPP/US Certification Textbook: Highlights the purpose and impact of cure provisions in state privacy laws.
