Last week the California State Senate and Assembly passed AB 370, a bill to amend the California Online Privacy Protection Act (CalOPPA) that would require operators of commercial websites or “online services” to disclose how the site responds to “do not track” signals sent by web browsers, which in turn will trigger enforceability by federal and state authorities. The amendment is expected to be signed by Governor Jerry Brown. Currently, there is as no agreed upon definition of tracking, sharing, or permitted uses when a DNT preference is expressed. Nor is there agreement on the propriety of devices or user agents (rather than informed consumers) setting DNT signals by default. Any publisher of a web site accessible to California residents should be cautious in how they respond to the California bill when it becomes effective, as discussed in this alert. 

Background on W3C
Since its endorsement in the 2009 FTC Staff Report, “Self-Regulatory Principles for Online Behavioral Advertising” and subsequent legislative proposals, the Do Not Track (DNT) concept gained momentum with the formation of the Tracking Protection Group within the Worldwide Web Consortium (W3C). The W3C group made good progress in creating a proposal for a standard Do Not Track (DNT) protocol for a browser or similar user agent to signal a consumer’s preference not to be tracked across web sites. But the industry, academic and consumer advocacy participants have foundered over the last two years in reaching agreement on what that signal should mean. Although there is general consensus that DNT is intended to restrict the data practices of third-parties (such as advertising networks) rather than first-party web site publishers with whom consumers know they are interacting, there is not yet clear consensus on the business rules for those receiving a DNT signal. Likewise, there is recognition that even without behaviorally targeted advertising, the web relies on collected data for a wide range of permissible activity (such as detecting security risks and fraudulent activity) that must occur even when a user expresses a DNT preference; but the range of permitted activities remains unsettled at W3C. And while DNT emerged as a proposed tool for expressing individual preferences, some user agents and devices in the field have been setting DNT signals by default, even without presenting the clear choice to the consumer. With the recent departure of the group’s co-chair, Peter Swire, to serve as serve as part of a high-level group reviewing US intelligence and communications technologies, quick adoption of a uniform DNT standard seems more challenging than ever.

Background on CalOPPA
Currently, CalOPPA requires a person or business that owns a commercial website or “online service” and collects “personally identifiable information” about California residents to post a conspicuous privacy policy on the website or service that covers the usual fair information practices territory: the categories of personally identifiable info collected; the third parties with whom operator may share the information; any process by which consumers can review and change the collected personally identifiable information; and the process for change.

The Amendment and Possible Responses
AB 370 would add two additional requirements for operators of such websites and online services for under California law:

• Disclose how the website or online service “responds to ‘do not track’ signals or other mechanisms that provide consumers a choice regarding the collection of personally identifiable information about an individual consumer’s online activities over time and across different Web sites or online services;”
• Disclose whether other parties may collect personally identifiable information about an individual consumer’s online activities when a consumer uses the operator’s Web site or service.

Consumer privacy advocates have often cast doubt on self-regulation and call for legislative DNT solutions. California’s amendment does not require honoring a DNT standard, but merely the disclosure of how a website or online service will respond to such a signal. It also would follow the enforcement model for California mobile policies, by which a party will receive 30 days’ advance notice and an opportunity to cure before any enforcement action is taken. But the California approach is nonetheless problematic. 

First, the DNT signal generated under the proposed W3C protocol is supposed to be directed primarily to third parties, not to publishers of the web sites that consumers are browsing. The CalOPPA amendments seem directed to first parties. 

Second, the DNT signal as envisioned by W3C is directed at data gathering practices that go beyond PII. CalOPPA is limited to PII in the narrower sense of data collected online and stored in an “accessible” form that permits the physical or online contacting of a specific individual and other information collected and maintained in combination with such. While the breadth of that definition may be debatable, it may not be as extensive as the de-identified segmenting data that DNT advocates are trying to encompass in DNT.

Third, there is as yet no agreed upon definition of tracking, sharing, and permitted uses when a DNT preference is expressed. Nor is there agreement on the propriety of devices or user agents (rather than informed consumers) setting DNT signals by default. California legislators may see this as a way to “shame” operators into compliance, but this is an odd climate in which to “shame” parties into compliance with an unfinished spec.

Under these circumstances, any publisher of a web site accessible to California residents should be cautious in how they respond to the California bill when it becomes effective. A website that represents it honors DNT signals by not tracking consumers online activities will be held to that vague representation not only in California, but in other states and by the Federal Trade Commission, as well. 

Given that the amendment still permits disclosure by hyperlink to a privacy policy web site publishers might consider simply explaining that because the DNT protocol is not yet finalized or directed to first party web sites, the site’s information collection and disclosure practices, and the choices that it provides to consumers, will continue to operate as described in its policy, whether or not a DNT signal is received.