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Financial Services Law Insights and Observations

Connecticut legislature passes consumer data privacy bill

Privacy/Cyber Risk & Data Security State Issues State Legislation Connecticut Consumer Protection COPPA State Attorney General Enforcement

Privacy, Cyber Risk & Data Security

Recently, the Connecticut legislature passed SB 6, which would enact provisions related to consumer data privacy and online monitoring. Highlights of the bill include:

  • Applicability. The bill will apply to a controller that conducts business in the state or produces products or services for consumer residents that, during the preceding calendar year, “controlled or processed the personal data of not less than seventy-five thousand consumers, excluding personal data controlled or processed solely for the purpose of completing a payment transaction” or “controlled or processed the personal data of not less than twenty-five thousand consumers and derived more than twenty-five per cent of their gross revenue from the sale of personal data.” Certain entities and types of data are exempt from the bill’s requirements, including state governmental entities; nonprofits; higher education institutes; national security associations registered under the Securities Exchange Act of 1934; financial institutions or data subject to federal privacy disclosure requirements; hospitals; certain types of health information subject to federal health privacy laws; consumer reporting agencies, furnishers, and consumer report users of information involving personal data bearing on a consumer’s credit; personal data regulated by certain federal regulations; and air carriers. Additionally, a controller and processor will be considered to be in compliance with the bill’s parental consent obligations provided it complies with verifiable parental consent mechanisms under the Children’s Online Privacy Protection Act.
  • Consumer rights. Under the bill, consumers will be able to, among other things, (i) confirm whether their personal data is being processed and access their data; (ii) correct inaccuracies; (iii) delete their data; (iv) obtain a copy of personal data processed by a controller; and (v) opt out of the processing of their data for targeted advertising, the sale of their data, or profiling to assist solely automated decisions. A consumer may designate another person to serve as his or her authorized agent to opt out of the processing of such consumer’s personal data.
  • Controllers’ and processors’ responsibilities. Under the bill, controllers will be responsible for responding to consumers’ requests within 45 days (an additional 45-day extension may be requested under certain circumstances). Responses to consumers’ requests must be provided free of charge, unless the request is “manifestly unfounded, excessive or repetitive,” in which case a controller may charge a reasonable administrative fee or decline to act on the request (a controller bears the burden of explaining the denial and must also establish an appeals process, including a method through which a consumer may submit a complaint to the state attorney general). Among other things, controllers must “[l]imit the collection of personal data to what is adequate, relevant and reasonably necessary in relation to the purposes for which such data is processed, as disclosed to the consumer” and are required to implement data security protection practices “appropriate to the volume and nature of the personal data at issue” and conduct data protection assessments for processing activities that present a heightened risk of harm to consumers. Controllers may not process personal data in violation of federal and state laws that prohibit unlawful discrimination against consumers and must provide an effective mechanism for consumers to revoke consent that is at least as easy as the method used to provide consent. Controllers must cease processing data within 15 days of receiving a revocation request. The bill also requires controllers to provide privacy notices to consumers disclosing certain information regarding data collection and sharing practices (including sharing with third parties), and if the controller sells a consumer’s personal data to third parties or engages in targeted advertising, the controller must disclose how consumers may exercise their rights under the bill. Controllers also will be prohibited from processing sensitive personal data without first presenting a consumer with the opportunity to opt out. The bill further specifies requirements for processing de-identified data or pseudonymous data. Data processors must adhere to a controller’s instructions and enter into contracts with clearly specified instructions for processing personal data.
  • Private right of action and state attorney general enforcement. The bill explicitly prohibits a private right of action. Instead, it grants the state attorney general exclusive authority to enforce the law. The attorney general may also require a controller to disclose any data protection assessments relevant to an investigation. A violation of the bill’s provisions will constitute an unfair trade practice.
  • Right to cure. Upon discovering a potential violation of the bill, the attorney general (during the period beginning July 1, 2023 through December 31, 2024) must provide a controller or processor written notice of violation. The controller or processor then has 60 days to cure the alleged violation before the attorney general can file suit. Beginning on January 1, 2025, the attorney general, when determining whether to provide a controller or processor the opportunity to cure an alleged violation, may consider the number of violations, the controller/processor’s size and complexity, the nature and extent of the processing activities, the substantial likelihood of public injury, and the safety of persons or property.

If enacted in its current form, the bill would take effect July 1, 2023.

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