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As with other U.S. states that have enacted their privacy laws, Montana has introduced its Consumer Data Privacy Act (CDPA). Passed unanimously by the House on April 21, 2023, through Senate Bill 384, this legislation is now awaiting Governor Greg Gianforte’s final approval. The CDPA shares similarities with Connecticut’s CTDPA and introduces a new era for organizations, requiring compliance by October 1, 2024. This article gives a brief overview of CDPA’s key features, provisions, and who needs to comply with the new law.

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Who Needs to Comply with CDPA?

1. Material Scope
CDPA’s reach extends to entities conducting business in Montana or offering products/services targeted at Montana residents. Notably, compliance is triggered if an entity:

    • Controls or processes personal data of over 50,000 consumers (excluding data for payment transactions), or;
    • Manages personal data of at least 25,000 consumers, deriving over 25% of gross revenue from data sales.

2. Exemptions
Certain entities enjoy exemptions, including government bodies, non-profit organizations, educational institutions, and those governed by specific federal acts like GLBA, HIPAA, and more. Moreover, the law excludes specific data types, such as medical, FCRA-covered, driver, FERPA, FCA, COPPA, ADA, and employment data.

Definitions of Key Terms

Navigating the CDPA lexicon is integral for a nuanced understanding of its implications:

  1. Affiliate: “Affiliate” denotes a legal entity sharing branding or under common control with another entity.
  2. Biometric Data: “Biometric data” encompasses automatic measurements of biological traits for individual identification.
  3. Consent: “Consent” refers to a consumer’s clear, informed, and unambiguous agreement for personal data processing.
  4. Consumer: A “consumer” is an individual residing in Montana.
  5. Controller: “Controller” is an entity determining the purpose and means of personal data processing.
  6. Dark Pattern: “Dark pattern” involves user interface manipulation affecting autonomy and decision-making.
  7. Personal Data: “Personal data” includes information reasonably linkable to an identified or identifiable individual.
  8. Processor: “Processor” handles personal data on behalf of a controller.
  9. Sensitive Data: “Sensitive data” involves specific categories posing heightened privacy risks.
  10. Third-Party: “Third-party” denotes entities beyond consumers, controllers, processors, or affiliates.

Obligations for Organizations Under CDPA

Comprehensive obligations await organizations navigating the CDPA landscape:

  1. Purpose Limitation: Controllers must restrict personal data collection to what is adequate, relevant, and necessary for intended purposes.
  2. Consent Requirements: Controllers must provide effective mechanisms for consumers to revoke consent, cease processing data promptly upon revocation, and explicitly seek consent for unrelated processing.
  3. Non-discrimination: Controllers are prohibited from discriminating against consumers for exercising rights. However, differential offerings are allowed for opted-out consumers or voluntary program participants.
  4. Privacy Notice Requirements: Controllers must furnish accessible, clear, and meaningful privacy notices, detailing processed data categories, sharing practices, contact information, and avenues for exercising rights.
  5. Security Requirements: Organizations must establish and maintain reasonable administrative, technical, and physical security practices aligned with data volume and nature.
  6. Data Protection Assessment: Data Protection Assessments (DPAs) are mandated for activities posing heightened risks, emphasizing benefits, risks, safeguards, and consumer rights.
  7. De-identified Data Requirements: Controllers possessing de-identified data must ensure non-associability, commit to non-reidentification, and contractually bind recipients to CDPA compliance.

Processor Prowess

Processors step into the spotlight, aiding controllers in DSR responses, security adherence, and providing essential DPA information. Their active involvement contributes significantly to the overall data governance framework, ensuring a harmonious relationship in the processing ecosystem.

Data Subject Rights

Empowering consumers, CDPA grants rights such as access, correction, deletion, portability, opt-out, and appeal. Controllers must respond within 45 days, with a possible 45-day extension for complex requests. This provision amplifies consumer agency, placing control over personal data back into the hands of the individuals it concerns.

CDPA Limitations

CDPA’s scope limitations preserve essential activities, allowing compliance with other regulations, research, contractual obligations, immediate safety actions, and more. Striking a balance between privacy and practicality, these limitations recognize the multifaceted nature of data use in contemporary society.

Regulatory Authority

The Office of the Attorney General of Montana spearheads CDPA enforcement. Legal action is possible if violations persist after a 60-day notice, fostering a corrective window for controllers. This authoritative oversight ensures the teeth of the legislation, holding entities accountable for their data practices.

How an Organization Can Operationalize CDPA

Organizational compliance involves policy establishment, informed consent acquisition, robust security implementations, DSR frameworks, regular risk assessments, employee training, policy updates, and mechanisms for addressing breaches and violations. A holistic approach is imperative, integrating CDPA requirements into an organization’s data-handling ethos.

Wrapping Up

To wrap up, the Montana Consumer Data Privacy Act (CDPA) introduces clear obligations and empowers consumers. With enforcement led by the Office of the Attorney General, CDPA ensures accountability and shapes a responsible digital ecosystem. As the effective date, October 1, 2024, approaches, organizations will need to explore its implications, understand applicability, acknowledge consumer rights, and prepare proactive steps toward compliance. Stay prepared for this transformative legislation, reflecting Montana’s commitment to safeguarding consumer privacy in the digital age.

How Can GetTerms Help

By leveraging GetTerms and adhering to best practices, businesses can ensure data protection, build trust with customers, and avoid legal pitfalls associated with privacy law non-compliance in the United States. Stay informed, update privacy policies, and prioritize data protection for success in the digital age.

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