Privacy Rights Discrimination and Loyalty Programs

The freedom from discrimination after exercising one’s privacy rights is one of CCPA’s four core rights (see CCPA Privacy Policy Requirements—Explain the Core Rights). 

Discrimination generally

Discrimination is defined as treating a consumer who exercises her or his CCPA rights differently from other consumers. Discrimination can take a number of different forms, including charging higher prices, responding more slowly to support requests, or providing lower quality or less featureful goods or services. Even implying that you will or may take a discriminatory action if a consumer exercises their privacy rights is a prohibited form of discrimination. In other words, you should not undertake any activity that tends to discourage consumers from exercising their CCPA privacy rights. 

Implementing loyalty or frequent shopper programs

Notwithstanding CCPA’S prohibition against discimination, the law recognizes as legitimate the well-established custom of providing discounts or other incentives to consumers who join loyalty programs, even if membership in those programs requires consumers to share and not to opt out of the sale of personal information. 

CCPA not only permits businesses to maintain loyalty programs, but also freemium business models and even paying consumers a financial incentive for the use of their information, as long as in each case these programs follow certain rules. The key consideration for all of these programs is that any difference in pricing or services, or any payments offered, must be reasonably related to the value of the consumer’s information to your business. 

To determine the value of the consumer’s information, consider factors such as:

  1. The average value of similar information in any available marketplaces; 
  2. How collecting, selling or deleting the information impacts your revenue; and/or 
  3. Your expenses related to collecting the information and providing your program.

If you cannot estimate the value of the consumer’s information in good-faith, or you cannot show that your program features are reasonably related that value, you may not offer the program.

For any incentive program, you must disclose certain information to consumers before they opt into a program (a brief summary with a deep link to a relevant portion of your privacy policy is sufficient): 

  1. Explain your price or service differences, or the payments you provide, in exchange for the collection and retention and/or sale of consumer data. 
  2. Explain all of the program terms, including how to opt in and out of the program
  3. Provide your estimate of the value of the consumer’s data, how you calculated it, and how that value relates to your program features. 
CCPA vs. COPPA: Working with Children’s Information
CCPA Compliance Workshop Agenda