California adopts tough new privacy legislation

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Under a state law that took effect at the start of this year, California will impose new record-keeping and reporting requirements on companies that share or sell customer information with third parties.

The law dictates that if a company shares personal customer information with other parties for marketing purposes but lacks an opt-in or opt-out privacy policy, it must provide specific information-such as categories of personal information disclosed to third parties, as well as their contact information-to California customers who request it. The law also instructs businesses that deal with California consumers to have a contact point where customers can request information and opt out of the list.

"The purpose of this is to force people to share information only when it's opt in or opt out," said David Straus, legal counsel for American Business Media, "and to make those who don't have privacy policies yet to create one."

While that will not be a problem for most larger trade publishers, which already have privacy policies in place, the law may hit many smaller publishers that have yet to set up subscriber privacy rules.

Straus said ABM is developing generic privacy policies in 2005 to share with its members, and has strongly encouraged publishers in years past to have privacy policies.

"There's always been the overriding threat that the government will impose a privacy policy on us if we don't do it to ourselves," he said. "If they do it to us, it will be much worse than if we do it to ourselves."

Nick Cavnar, VP-circulation and data development at Hanley Wood, said, "Most companies are involved with multiple businesses, so if it's a magazine, it's easy to put the blurb in the magazine saying if you want out, call this number," he said. "But one of the complications is that if someone calls you and says take me off your list at the magazine, do you also need to take them off the lists of all the other businesses you own?"

The California law does stipulate that affiliated companies work the same as unaffiliated companies do, but doesn't define any criteria for different product lines within one company. "It's going to create a problem of tracking it through the different databases," Cavnar said.

Straus said other states may follow California's lead, which could lead to federal legislation. "It may work like the CAN-SPAM law did last year," he said, adding this would be a good thing. "At least then there would be one set of rules rather than a disparate set of rules." M

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