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On June 3, 2025, the California Senate unanimously passed Senate Bill 690 (SB 690), a bill that seeks to add a “commercial business purposes” exception to the California Invasion of Privacy Act (CIPA).

After multiple readings on the Senate floor, SB 690 passed as amended, and will now proceed to the California State Assembly. SB 690, as originally drafted, was explicitly made retroactive to any cases pending as of January 1, 2026.  The most recent amendments on the Senate floor remove the retroactivity provisions, meaning the bill, if passed by the Assembly and signed by the Governor, will only apply prospectively.  The amendments to remove the retroactive provisions of SB 690 are not unexpected. Retroactive application provisions are traditionally frowned upon by the California legislature and may offend due process principles.

If passed, SB 690 would exempt the use of certain online tracking technologies from violating CIPA, provided they are used for a “commercial business purpose” and comply with existing privacy laws like the California Consumer Privacy Act (CCPA).  SB 690 could significantly impact prospective litigation under CIPA for online business activities.  Indeed, there may be the proverbial “rush to the courthouse” if plaintiffs and plaintiffs’ attorneys begin to feel that passage of SB 690 is forthcoming or likely, now that the bill will proceed to the State Assembly.

Businesses may want to consider engaging their government relations teams or contacting members of the California State Assembly to express their positions on the bill as it now passes to the other chamber of the California legislature.

On May 19, 2025, the California Senate Appropriations Committee, which handles budgetary and financial matters, held a hearing on California Senate Bill 690 (SB 690).  The proposed bill would amend the California Invasion of Privacy Act (CIPA) by adding an exception to the statute which has the effect of permitting use of tracking technologies for “commercial business purposes.”

The Appropriations Committee referred SB 690 to the Suspense File.  Generally, if the cost of a bill meets certain fiscal thresholds, the Appropriations Committee will refer the bill to the Suspense File.  Having met that threshold, SB 690 will now proceed to a vote-only Suspense Hearing to be held on May 23, 2025.  No testimony will be heard during the May 23, 2025 hearing.  SB 690 will then either move on to the Senate Floor, or be held in committee.  While referral to the Suspense File is not necessarily a death knell to SB 690, statistics show that a number of bills die quietly in the Suspense Hearing due, in part, to its non-public process. 

If passed, SB 690 would exempt the use of such online tracking technologies from violating CIPA, provided they are used for a “commercial business purpose” and comply with existing privacy laws like the California Consumer Privacy Act (CCPA).  SB 690 could significantly impact current litigation under CIPA for online business activities. Not only will plaintiffs be far less likely to file new lawsuits alleging violations of CIPA, but SB 690’s provisions are explicitly made retroactive to any cases pending as of January 1, 2026, which could lead to dismissals of ongoing lawsuits, as well.

Businesses may want to consider engaging their government relations teams or contacting members of the Senate Appropriations Committee to express their positions on the bill. 

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This post was originally published to Seyfarth’s Global Privacy Watch blog.

California Senate Bill 690 (SB 690), introduced by Senator Anna Caballero, is continuing to proceed through the California state legislative process. The proposed bill would amend the California Invasion of Privacy Act (CIPA) by adding an exception to the statute which has the effect of permitting use of tracking technologies for “commercial business purposes.” CIPA, enacted in 1967, was originally established to prohibit the unauthorized recording of or eavesdropping on confidential communications, including telephone calls and other forms of electronic communication. However, over recent years CIPA claims in lawsuits have been used to target business’ online use of cookies, pixels, trackers, chatbots, and session replay tools on their websites. 

If passed, SB 690 would exempt the use of such online tracking technologies from violating CIPA, provided they are used for a “commercial business purpose” and comply with existing privacy laws like the California Consumer Privacy Act (CCPA).  SB 690 could significantly impact current litigation under CIPA for online business activities. Not only will plaintiffs be far less likely to file new lawsuits alleging violations of CIPA, but SB 690’s provisions are explicitly made retroactive to any cases pending as of January 1, 2026, which could lead to dismissals of ongoing lawsuits, as well.

On April 29, 2025, the Senate Public Safety Committee unanimously voted to advance SB 690, and it was subsequently re-referred to the Senate Appropriations Committee. A hearing before the Appropriations Committee is currently scheduled for May 19, 2025.

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Seyfarth Shaw is proud to sponsor the 2025 Masters Conference, a premier boutique legal event hosted in cities across the U.S., as well as in Toronto and London. The conference will be held on Tuesday, May 20, 2025, at Seyfarth’s Chicago office and will feature keynote presentations, panel discussions, workshops, and networking opportunities.

Topics will include eDiscovery, Artificial Intelligence, Information and Data Governance, Legal Project Management, Forensics and Investigations, Knowledge Management, and Cybersecurity.

Seyfarth partners Jay Carle, Matthew Christoff, and Jason Priebe will share their insights as featured panelists throughout the day. Additional information about their panel topics is outlined below.

For more information and to register, click here.

Continue Reading Seyfarth to Sponsor and Present at 2025 Masters Conference
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The California Privacy Protection Agency (“CPPA”) has made it abundantly clear: privacy compliance isn’t just about publishing the right disclosures – it’s about whether your systems actually work. On May 6, the agency fined Todd Snyder, Inc. $345,178 for failures that highlight a growing regulatory focus on execution of California Consumer Privacy Act (“CCPA”) compliance. The action sends a powerful message: even well-resourced companies are not insulated from enforcement if they don’t actively test and manage how privacy rights are honored in practice.

Not Just Tools – Working Tools

The action against Todd Snyder was rooted in executional failure. The company had a portal in place for consumer rights requests, but it wasn’t processing opt-out submissions – a failure that lasted for roughly 40 days, according to the CPPA. The cookie banner that should have enabled consumers to opt out of cookie tracking would disappear prematurely, preventing users from completing their requests.

The company further required users to verify their identity before opting out and requested sensitive personal information, such as a photograph of their driver’s license. The CPPA determined this was not only unnecessary, but a violation in itself. The allegations around improper verification reflect concerns raised in a CPPA Enforcement Advisory issued last year, which cautioned businesses against collecting excessive information from consumers asserting their privacy rights.

Continue Reading CPPA Underscores That Businesses Own CCPA Compliance – Even When Privacy Management Tools Fail
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On September 6, 2024, the U.S. Department of Labor (DOL) issued Compliance Assistance Release No. 2024-01, titled “Cybersecurity Guidance Update.” The updated guidance clarifies that the DOL cybersecurity guidance applies to all ERISA-covered plans, and not just retirement plans, but also health and welfare plans. Also, as a direct response to service providers’ concerns, the DOL expanded its 2021 guidance to emphasize that plan sponsors, fiduciaries, recordkeepers, and participants should adopt cybersecurity practices across all employee benefit plans. With cyber risks continually evolving, the update highlights the importance of implementing robust security practices to protect participant information and plan assets.

Background

When the DOL initially issued its cybersecurity guidance in April 2021, it was intended to help ERISA plan sponsors, fiduciaries, service providers, and participants safeguard sensitive data and assets. Some interpreted the guidelines as applicable only to retirement plans and not service providers or recordkeepers, which led to industry calls for clarity. The 2024 Compliance Assistance Release addresses these concerns by confirming that the DOL’s cybersecurity expectations indeed are intended to extend to all ERISA-covered employee benefit plans, including health and welfare plans.

Expanded Guidance Highlights

The updated guidance maintains the original three-part format, emphasizing Tips for Hiring a Service Provider, Cybersecurity Program Best Practices, and Online Security Tips. Here’s a breakdown of these components and key updates from the recent guidance:

1. Tips for Hiring a Service Provider

Plan sponsors and fiduciaries have a critical responsibility when selecting and monitoring service providers to ensure strong cybersecurity practices are in place. The updated DOL guidance advises fiduciaries to thoroughly vet potential providers by asking specific, detailed questions. One key area to examine is insurance coverage. Fiduciaries should be verifying that the prospective provider’s insurance includes coverage for losses resulting from cybersecurity incidents.

In addition, fiduciaries should review the provider’s security history and validation processes. This involves requesting records of past security incidents, recent information security audits, and any evidence of the provider’s compliance with cybersecurity standards. Finally, it is essential to establish clear contractual obligations with service providers. Contracts should contain provisions addressing data confidentiality, timely breach notification, ongoing compliance monitoring, and well-defined incident response protocols.

By specifying these points, the DOL aims to provide plan fiduciaries with concrete criteria for evaluating potential third-party providers, especially those managing sensitive health and welfare data.

2. Cybersecurity Program Best Practices

Educating participants plays a crucial role in reducing cyber risks, and the DOL encourages plan sponsors to empower participants with resources that strengthen their account security. One fundamental aspect of this education involves password management and the use of multi-factor authentication (MFA). The DOL recommends that participants use longer, unique passwords and change them annually. This approach offers a balance, maintaining security without overwhelming users with frequent updates.

Sponsors should also encourage participants to enable MFA wherever possible, as this extra layer of protection makes it significantly harder for unauthorized users to gain access. Additionally, the DOL highlights the importance of cyber threat awareness. Educating employees on recognizing phishing attempts, avoiding free public Wi-Fi when accessing sensitive accounts, and keeping contact information up to date are essential to safeguard against fraud. By understanding and implementing these practices, plan participants can actively contribute to the security of their accounts.

3. Online Security Tips for Participants

The updated guidance underscores the need for a comprehensive cybersecurity framework to protect ERISA plans. A cornerstone of this approach is conducting regular cybersecurity risk assessments. By identifying potential vulnerabilities, plan sponsors and fiduciaries can better understand the specific risks to their data and implement targeted access controls to ensure that only authorized individuals can access sensitive information. Data encryption is also a vital part of the DOL’s recommendations. Encrypting data both in transit and at rest adds a critical layer of defense, protecting information from unauthorized access, even if the data is intercepted or compromised.

These tips further highlight the DOL’s focus on enhanced MFA. Service providers, in particular, are encouraged to implement phishing-resistant MFA, especially for systems exposed to the internet or areas containing highly sensitive data. By deploying these robust authentication methods, ERISA plan administrators can significantly reduce the risk of unauthorized access and bolster overall security. Additionally, the DOL pointed health and welfare plan sponsors to resources from the Department of Health and Human Services (HHS), including the Health Industry Cybersecurity Practices and guidelines tailored for small, medium, and large healthcare organizations.

Takeaways and Action Items for Plan Sponsors and Fiduciaries

The updated guidance reinforces the importance of cybersecurity across all ERISA-covered plans. To adhere to the DOL’s expectations and mitigate cyber risks effectively, plan sponsors and fiduciaries should consider these actions:

  • Evaluate Service Provider Cybersecurity: Conduct due diligence by asking for information on service providers’ cybersecurity policies, audits, and breach history. Include clear cybersecurity terms in contracts and ensure vendors have applicable insurance coverage.
  • Implement Robust Cybersecurity Policies: Ensure your organization’s cybersecurity policies align with DOL guidelines, including regular risk assessments, strong encryption practices, and incident response planning.
  • Educate Participants: Provide ongoing resources to educate plan participants on online security, focusing on best practices like strong passwords, MFA, and phishing awareness.
  • Leverage HHS Resources for Health Plans: For health and welfare plans, use the HHS cybersecurity guidance to align your practices with industry-specific standards.
  • Conduct a Cybersecurity Self-Audit: Consider conducting a self-audit or hiring a cybersecurity expert to assess and improve your cybersecurity practices. Health plans, in particular, should coordinate these audits with HIPAA privacy and security requirements.
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Seyfarth Synopsis: In a significant decision for website operators, the Massachusetts Supreme Judicial Court clarified that tracking users’ web activity does not constitute illegal wiretapping under the state’s Wiretap Act. The court found that person-to-website interactions fall outside the Act’s scope, which focuses on person-to-person communications. However, the court emphasized that other privacy laws could still apply to such tracking practices. This ruling may influence how similar cases proceed nationwide and signals to the Massachusetts legislature that any broader restrictions on web tracking require explicit statutory action.

On Thursday, October 24, 2024, the Massachusetts Supreme Judicial Court ruled that the Massachusetts state wiretap act (“Wiretap Act”) does not prevent a website owner from tracking visitors’ web browsing activity, even without user consent. Plaintiffs have filed numerous similar lawsuits under different state wiretapping laws around the United States. Courts in these cases have largely permitted Plaintiffs to proceed with their claims past the motion to dismiss stage. This decision from the Massachusetts high court could alter that course.

Plaintiff Kathleen Vita alleged that she had accessed and reviewed information on the defendants’ – New England Baptist Hospital and Beth Israel Deaconess Medical Center, Inc. – websites, including doctors’ information, medical symptoms, conditions and procedures. She alleged the defendants collected and shared her browsing history with third parties for advertising purposes without her consent. These third parties include Facebook and Google which obtained the information through tracking software – Meta pixel and Google Analytics – installed on the defendants’ websites. Plaintiff did not allege that any private patient records or messages to nurses or doctors communicated through the website were intercepted or shared.

The Massachusetts Supreme Judicial Court reversed the lower court’s denial of the defendant hospitals’ motion to dismiss. In doing so, the Court looked to the statutory text of the Wiretap Act and legislative intent when the Act passed. The Court focused on the statutory term “communication” and determined that the legislature only intended to prevent the wiretapping of or eavesdropping on person-to-person communications when passing the Act. The conduct Plaintiff alleged did not involve person-to-person communications, but rather an interaction between a person and website, and thus fell outside the purview of the Wiretap Act.

The Court did recognize the legislature’s intent for the law to apply to new and emerging technologies that may not have been contemplated when the law was originally passed in 1968. Thus, the Court noted the wiretapping law could apply to person-to-person communications across a broad technological spectrum, including cell phones, text messaging, internet chats or email, so long as the communication actually involves people communicating with each other. But if the legislature intends for the wiretapping law to prohibit the tracking of a person’s browsing activity or interaction with a website, the Court urged the legislature to pass a law stating so expressly.

Although the Supreme Judicial Court in Massachusetts sided with defendants in determining that website tracking does not violate the Massachusetts state Wiretap Act, it also noted that the activity may violate other privacy laws outside the wiretapping context. Accordingly, businesses in Massachusetts and elsewhere should consider the host of privacy laws when implementing website tracking software. Additionally, it remains to be seen whether the Massachusetts legislature will heed the Court’s directive and pass a law expressly prohibiting website tracking under the Wiretap Act or other statute. Lastly, while this particular case resulted in a positive outcome for businesses utilizing website tracking software, courts in different states around the United States have reached different conclusions under their respective laws.

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Corporations face unprecedented challenges in safeguarding sensitive data and mitigating privacy risks in an era marked by the rapid proliferation of Internet of Things, or IoT, devices.

Recent developments, including federal and state regulators’ heightened focus on privacy enforcement, highlight the importance of proactive risk management, compliance and data governance. As IoT and smart devices continue to hit the marketplace, heightened scrutiny for businesses’ data governance practices follows.

The Federal Trade Commission’s recent technology blog, “Cars & Consumer Data: On Unlawful Collection & Use”[1] underscores the agency’s commitment to enforcing consumer protection laws. Despite their blog’s focus on the car industry, the FTC’s message extends to all businesses, emphasizing its vigilance against illegal — or “unfair and deceptive” — collection, use and disclosure of personal data.

Recent enforcement actions are a stark reminder of the FTC’s proactive stance in safeguarding consumer privacy.

Geolocation data is a prime example of sensitive information subject to enhanced protections under the Federal Trade Commission Act. Much like mobile phones, cars can reveal consumers’ persistent, precise locations, making them susceptible to privacy infringements.

Continue Reading Careful Data Governance Is a Must Amid Enforcement Focus
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On August 2, 2024, Illinois Governor J. B. Pritzker signed legislation reforming Illinois’ Biometric Information Privacy Act (BIPA). Senate Bill 2979 immediately amends BIPA to limit a private entities’ potential liability for collecting or sharing biometric data without consent.

The BIPA amendment followed a call for action  directed at the legislature from the Illinois courts. Previously, the question of damages liability had wound its way through appellate review in Illinois courts. This amendment changes the course of the Illinois Supreme Court interpretation of BIPA claim accrual, which had held that each unlawful collection or disclosure constituted a new BIPA claim but that damages were discretionary.

Now, with the passage of SB 2979, a private entity that collects or otherwise acquires biometric data in more than one instance for the same person commits only one violation of the Act. Additionally, a private entity that discloses biometric data from the same person to the same recipient commits only one violation of the Act, regardless of the number of times that data is disclosed. As a result, individuals are only entitled to a single recovery of statutory damages.

This reform has potential to reduce the top end liability private entities may face when it comes to BIPA claims.  However, many BIPA litigators are of the opinion that a single instance of harm was already “built in” to settlement valuations in prior cases, and that this new legislation will not do much to alter the approximate average valuation of $ 1500 per person that most plaintiff lawyers are putting on class settlement demands in BIPA lawsuits.  Additionally, even a single instance of alleged harm involving tens of thousands of employees or customers can still amount to significant damage claims. Businesses are still well-advised to be wary before deploying any biometric collection device or mechanism in Illinois without legal advice about appropriate consent and legal compliance obligations.

The European Union (EU)’s government organizations are just like any another entity trying to function in a world where global companies and even government entities are reliant on digital platforms for messaging and collaboration. For years, there has been debate about how platforms like Microsoft 365, formerly Office 365, could be deployed in a way that complies with the GDPR processing and transfer restrictions. And it turns out that even the European Commission (EC) itself can apparently get it wrong. In a surprising turn of events earlier this month, the European Data Protection Supervisor (EDPS) concluded its nearly three year investigation into the Commission’s own deployment and use of Microsoft 365, signaling a pivotal moment in the conversation about the GDPR privacy and security requirements for cloud-based messaging and document collaboration platforms.

The Catalyst for Change

The EDPS’s investigation, spurred by the well-known Irish DPC case initiated by Maximillian Schrems (C-311/18), widely referred to as the “Schrems II” case, and as part of the 2022 Coordinated Enforcement Action of the European Data Protection Board (EDPB), unearthed several critical issues with the Commission’s deployment of Microsoft 365. These findings reportedly involve the EC’s failure to ensure that personal data transferred outside the EU/EEA is afforded protection equivalent to that within the EU/EEA and a lack of specificity in contracts between the Commission and Microsoft regarding the types of personal data collected and the purposes for its collection.  Those contractual terms, and accompanying GDPR safeguards and commitments are of course the same terms that every other global company is using with Microsoft, posted on the Microsoft website and generally not open for negotiation or discussion.

The EDPS’s Verdict

The resolution to the findings is as unprecedented as the investigation itself. The EDPS issued the EC a reprimand and imposed corrective measures demanding the suspension of all data flows from the use of Microsoft 365 to Microsoft and its affiliates and sub-processors outside the EU/EEA not covered by an adequacy decision, effective December 9, 2024. Additionally, the Commission must demonstrate its compliance with Regulation (EU) 2018/1725, specifically regarding purpose limitation, data transfers outside the EU/EEA, and unauthorized data disclosures by the same date.

This decision, the first of its kind, raises important questions about the future of data protection enforcement within the EU – and the use and deployment of any cloud-based platform like Microsoft 365 by any company established in the EU. What mechanisms will be or can be employed to ensure compliance? How will this affect the technical and logistical operations of the European Commission and potentially other EU institutions and bodies as they transition data flows to new servers?

A Roadmap for Compliance

Despite the challenges and short term confusion this decision presents, it also offers a silver lining. The decision serves as a vital roadmap for compliance, setting a precedent for the level of transparency and security required in data processing and transfer activities. This move by the EDPS reinforces the EU’s stance on the importance of data protection, signaling to institutions, companies, and individuals alike that safeguarding personal data is paramount and non-negotiable.

The Path Forward

As we reflect on this decision, it is clear that the implications extend far beyond the confines of the European Commission and Microsoft 365. This decision serves as another wake-up call to all entities operating within the EU’s jurisdiction, emphasizing the need for stringent data protection measures and the importance of reevaluating current data handling practices. The fact that the EC itself is on the receiving end is a surprise, but plenty of other companies with operations in the EU know they are doing the exact same things that the EC just got reprimanded for doing.

Looking ahead, the decision by the EDPS is not just about compliance; it’s about setting a global standard for data protection that companies can understand and predictably follow. As we move forward, institutions and companies should take heed of the path to compliance outlined by the decision. Businesses can no longer assume things are safe by relying on the size and popularity of the Microsoft 365 ecosphere, and the contentment that everyone else is doing the same thing. This decision rocked the boat for everyone. If the EC themselves can get this wrong, what chance is there for the rest of us?