California’s joined the fight for consumer rights.
Recently, the state passed two laws aimed at providing more digital privacy and control.
And if you operate in the digital space, these laws could affect you. Read on to find out how.
The Push For New Consumer Protection Laws
You may have noticed a sudden surge in all things internet privacy related.
You might also have heard of a little thing called the Cambridge Analytica scandal – Facebook’s now infamous data breach heard ‘round the world.
The long and short of it is this: Cambridge Analytica, a political consulting firm based in the United Kingdom, collected the personal information of as many as 87 million Facebook users.
That personal information was used to make 30 million “psychographic” profiles about voters.
When the news broke, it resulted in a scandal that landed Facebook on trial for breach of information.
While Facebook maintained that it wasn’t so, and they didn’t give away passwords and no information was hacked, it still left users with a much greater idea of how widely their information was being used.
And once consumers became aware, a few things hit the fan.
Consumer Protection Law #1: Digital Privacy
When all was said and done, the breach tore open a digital security can of worms.
The fact that companies were collecting information like purchase history, spending habits, and financial history didn’t sit well with the general public.
And now, California’s taken notice.
The first of the new consumer protection laws give consumers more control over how their personal information is distributed online.
Under the new law, consumers have the right to know exactly what information companies are collecting, why the information is being collected, and who they intend to share that information with.
If they so choose, consumers can also tell companies to delete any information they wish, or indicate that certain information can’t be shared – and businesses still have to give them quality service.
And, in a move that should grab Facebook’s attention, it also makes it easier for individual (or groups of) consumers to sue companies in the case of a data breach.
The law isn’t, however, without a few loopholes. For example, tech companies can, “share” data even if a consumer bars them from selling it. And the law allows companies to charge higher prices to consumers who opt out of having their data sold.
Despite that, it’s still a step in the right direction regarding customer control and privacy.
The new law goes into effect in January 2020.
Consumer Protection Laws #2: Digital Control
I think we can all agree that this next law needed to happen.
Granted, not every subscription-based business will initially be pleased, but in terms of customer satisfaction, they’ll gain far more than they lose.
The law goes like this: companies now have to offer a way for customers to unsubscribe from services online.
Because let’s be real, we’ve all encountered the seemingly endless maze of trying to unsubscribe from a newspaper, cable service, or various other digital subscriptions.
There’s always a hard-to-find number to call and busy lines to contend with, and rarely is unsubscribing from a service a seamless process.
But all that’s changing, thanks to the new California law that went into effect on July 1. Along with the more straightforward unsubscribe process, companies will also no longer be able to:
- Make an automatic renewal or continuous service offer at the end of a trial period without clearly stating and explaining the price that will be charged when the trial ends
- Prohibits businesses from charging a consumer’s card for an automatic renewal for a discounted price without clear consent
- If the total does include a discounted or trial price, the business must tell the customers how to cancel (and allow them to cancel) the automatic renewal before being charged full price
The full law (found here) goes into far more detail, but there’s the gist.
And while the law is only in effect for California, it does apply to any company that does business with customers in California – which means it will affect a fair few subscription-based services.
How Will The New Consumer Protection Laws Affect Business?
Potentially, in quite a few ways.
For the law requiring subscription services to include easier opt-out’s, it will require those who don’t already to construct an entirely new feature on their website.
Not to mention the effect it could have on business overall. If you’re opt-out process currently includes multiple hoops for customers to jump through, you’re probably keeping a lot of business based solely on that.
Once customers can easily discontinue service, it’s likely many will do so.
But all in all, it will make customers happy.
Think about it: if you give customers something to complain about, they will. On social media, on review sites, to their friends, etc. And as we well know, bad reviews are bad for business.
So, the point is that this law will prove beneficial in the long run, for both customers and your business.
As for the first law regarding more customer transparency, the good news is, you have some time to prepare. Remember, it goes into effect January 2020.
If it sounds a bit familiar, it’s for good reason: it’s reminiscent of Europe’s recent GDPR regulation.
And while California’s law is not as comprehensive or expansive as the GDPR, it is one of the most comprehensive privacy laws ever introduced in the United States, according to Carnegie Mellon professor Aleecia M. McDonald.
How Marketers Can Prepare for the New Consumer Protection Laws
Though again, not as comprehensive as the GDPR, a lot of the lessons can still be applied.
And hey, with any luck, you’ve already applied many of these tactics to protect against any impending GDPR backlash.
Again, let me emphasize that not all of these may be necessary to protect against the California law. But with all the privacy updates being made, they can hardly help.
For the record, cookies are little digital footprints you place in people’s browsers when they visit your site. It’s what allows them to later serve remarketing ads, for example.
But the thing is, those cookies store information about people. It’s how you identify them across the web.
And while they’re perfectly okay to use, it’s not necessarily perfectly okay to do so without telling your visitors anymore.
It’s an easy solution: simply include a footer or popup when someone visits your site informing them of your cookie use, and ask them to accept. It barely interrupts their browsing experience and covers you for future cookie use.
Next, tell visitors exactly how their information will be used.
This is the big one. If people are giving you information, you have to tell them what you plan to do with it.
If you plan to use it for any automation, share it with third-parties, or use it for your own research, tell them.
And, be prepared to announce any data breaches.
Remember that part of the law that makes it easier for individuals to sue in the event of a data breach?
While there’s not a whole lot you can do to protect against it, you can do your best to be as transparent as possible in case it happens.
I’ll be honest, it won’t guarantee a happy ending. But it will help customers feel like they were being communicated with, rather than kept in the dark about something that could have a major effect.
That honesty and transparency may help the process go smoother, and save any future business you hope to have with those customers.
So the takeaway here is this: the internet’s been held accountable.
People are taking their privacy seriously, and they want as much as control over the information they put out there as possible.
As business owners and marketers, we now have no choice but to oblige.
Even if you aren’t located in or do business with customers in California, it seems fair to say that the push for more consumer protection is real. And it’s likely coming for you.
Best to get ahead of the game.