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Tennessee took a significant leap in safeguarding data privacy by enacting the Tennessee Information Protection Act (TIPA) in May 2023. In this article, we explore TIPA’s unique features, important provisions, and its impact on businesses exploring the world of data.

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A Legislative Landmark

TIPA’s status as a legislative landmark is underscored by its affirmative defense, treble damages provision, and unanimous legislative backing. This section explores the unique aspects that set TIPA apart in the realm of data privacy laws.

  1. Unprecedented Affirmative Defense
    TIPA pioneers an affirmative defense mechanism, unique among state data privacy laws. By aligning with the National Institute of Standards and Technology (NIST) privacy framework, organizations not only demonstrate compliance but also proactively safeguard against potential violations, emphasizing the legislation’s commitment to a forward-looking approach.
  2. Treble Damages as a Deterrent
    Setting itself apart from its counterparts, TIPA empowers Tennessee courts to impose treble damages for willful or knowing violations. This robust punitive measure serves as a formidable deterrent, underscoring the legislation’s determination to curb intentional breaches and protect consumer data.
  3. Unanimous Legislative Backing
    Governor Bill Lee’s signature on TIPA, following unanimous approval in both houses of the State General Assembly, highlights a collective commitment to fortify data privacy within the state. This unanimity signals a united front in recognizing the importance of stringent data protection measures.

Determining Compliance

TIPA sets expansive parameters for determining compliance, covering material scope and exemptions for specific entities. Understanding these aspects is crucial for businesses operating in Tennessee.

  1. Material Scope
    TIPA’s material scope is expansive, encompassing entities conducting business in Tennessee or targeting its residents. To fall within its purview, businesses must surpass $25 million in revenue and meet specific criteria regarding the volume of consumer data processed and revenue derived from such data.
  2. Exemptions Explained
    Beyond its applicability, TIPA provides explicit exemptions for certain entities, including government bodies, financial institutions under the Gramm-Leach-Bliley Act, licensed insurance companies, non-profit organizations, and institutions of higher education. The law also meticulously excludes specific types of data, such as medical, FCRA-covered, driver data, etc.

In-Depth Definitions

TIPA’s strength lies in its precise definitions of key terms. From biometric data to consent, consumer, controller, personal information, processing, processor, and sensitive data, the law provides a robust foundation for nuanced interpretation, ensuring effective application.

Navigating Organizational Obligations

Organizations face multifaceted obligations under TIPA, ensuring data protection aligns with disclosed purposes. From purpose limitations to stringent security measures, each aspect underscores a commitment to robust data management.

  1. Purpose Limitation Clarity
    Beyond the directive on purpose limitation, TIPA mandates that controllers must not process personal information for purposes beyond what is reasonably necessary and compatible without explicit consumer consent. This places a considerable onus on organizations to align data processing with disclosed purposes.
  2. Stringent Security Measures
    The legislation requires controllers to implement not just security measures but “reasonable” administrative, technical, and physical data security practices. The emphasis on reasonableness ensures that security practices align with the specific volume and nature of the personal information being processed.
  3. Non-discrimination Principle
    While controllers are barred from discriminating against consumers for exercising their TIPA rights, the law allows for differentiated offerings, underscoring a balance between consumer protection and business flexibility, especially in the context of opt-outs and loyalty programs.
  4. Consent Requirements Deciphered
    TIPA places explicit constraints on processing sensitive data without consumer consent. This includes meticulous consideration for data concerning known children, requiring adherence to the Children’s Online Privacy Protection Act.
  5. Comprehensive Privacy Notices
    The legislation mandates not just privacy notices but “reasonably accessible, clear, and meaningful” ones. This comprehensive approach ensures that consumers are well-informed about the categories of personal information processed, the purpose of processing, and avenues to exercise their rights under TIPA.
  6. Holistic Data Protection Assessments
    TIPA’s requirement for Data Protection Assessments (DPAs) extends to specific activities, ensuring a comprehensive evaluation of potential risks and benefits. The inclusion of profiling with foreseeable risks reflects a forward-looking approach to emerging data processing challenges.
  7. Adherence to the NIST Framework
    Beyond establishing a privacy program, TIPA introduces an affirmative defense through conformity to the NIST privacy framework. The legislation even accounts for potential revisions to the framework, showcasing a commitment to adaptability in the rapidly evolving field of data privacy.
  8. Handling De-identified Data
    TIPA’s stipulations on de-identified data go beyond mere possession; they ensure that controllers take active measures to prevent re-identification. The contractual obligations imposed on recipients act as an additional layer of safeguarding consumer privacy.

Understanding Data Processor Responsibilities

Processors, often the unsung heroes of data processing, must actively assist controllers in responding to Data Subject Rights (DSR) requests. Their role in adhering to contractual processing terms is crucial for ensuring lawful and ethical data processing.

Empowering Data Subject Rights

TIPA places a strong emphasis on empowering consumers with a comprehensive set of rights. The law recognizes not just the right to access and correction but also the nuanced right to portability, providing consumers with greater control over their personal data.

  1. Timely Response to DSR Requests
    Controllers must not only respond promptly to DSR requests within 45 days but also have the flexibility for a 45-day extension for complex requests. This balancing act ensures both efficiency and thoroughness in addressing consumer requests.
  2. Transparent Denial Process
    In cases of denial, TIPA demands transparency. Denials must be justified within 45 days, with a consumer-friendly appeal process. This dual-layered approach ensures fairness and clarity in handling DSR requests.
  3. Balanced Charging for DSR Requests
    TIPA’s provision for charges in specific instances reflects a balanced approach. While consumers are entitled to two free annual DSR request fulfillments, the law accommodates charges for manifestly unfounded, excessive, or repetitive requests, aligning with principles of reasonableness.

Recognizing Limitations

TIPA acknowledges the practical realities organizations face. The legislation’s recognition of limitations, including compliance with laws, cooperation with law enforcement, and activities related to internal operations, ensures a nuanced and pragmatic approach to data processing.

Authority of the Tennessee Attorney General & Reporter

The Tennessee Attorney General & Reporter (AGR) assumes a pivotal role in TIPA enforcement. The pre-action notice requirement underscores a commitment to due process, providing organizations with an opportunity to rectify violations before facing legal action.

Penalties for Non-compliance

TIPA’s penalties for violations are not just monetary; they are calibrated to consider various factors. The inclusion of treble damages for intentional breaches signals a clear stance against willful violations, ensuring that penalties are commensurate with the severity of the offense.

Operationalizing TIPA Compliance

Operationalizing TIPA compliance necessitates a multifaceted approach. Beyond the structural elements of data protection impact assessments and limited data collection, organizations must actively engage with consumers through transparent consent mechanisms and robust responses to DSR requests. This holistic strategy aligns with the spirit of TIPA, fostering a culture of data responsibility and consumer trust within organizations operating in Tennessee’s dynamic digital landscape.

Wrapping Up

To wrap up, the Tennessee Information Protection Act (TIPA) establishes a strong data privacy framework, emphasizing a collective commitment to privacy. TIPA’s unique provisions, unanimous support, and the role of the Tennessee Attorney General highlight its significance. Clear definitions, stringent security, and transparent privacy notices set high standards for compliance. Adopting TIPA’s comprehensive approach ensures legal adherence and promotes a culture of data responsibility and trust. Navigating TIPA allows businesses to confidently address data challenges in Tennessee, demonstrating dedication to privacy and security.

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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