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February 17th, 2022
Calif. AG Sets Sights on Loyalty Programs’ Privacy Pitfalls
Privacy & Data Security Group Chair Daniel M. Goldberg was quoted in the article, “Calif. AG Sets Sights on Loyalty Programs' Privacy Pitfalls” published by Law360. The article discusses the pressure businesses are facing to comply with the California Consumer Privacy Act requirement that companies offering loyalty programs explain to consumers how they’re profiting from the personal data they collect. The state's attorney general recently sent warning letters to a number of major corporations that offer loyalty rewards, and is making the issue a priority. Daniel explained that the challenges for brands include the difficulty of valuing customer data in relation to the benefits the companies receive – for example, because the value of free hotel rooms or flights can fluctuate many companies “say we're not going to address it right now because we don't know how to address it, or we don't want to address it because that could disclose trade secrets that give our competitors an advantage."
Daniel added that: "What's interesting is that the notices didn't talk about deficiencies in the notice but rather a lack of notice completely, and that's low-hanging fruit that [a] regulator [can] walk into a store or go onto a website and check out." The takeaway? companies “need to understand that this is something the AG's office is looking at very closely, and it's no longer an issue that companies can avoid addressing."
Read the article here. (Behind paywall)
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