The Nevada Privacy Law Is No CCPA, but Beware of Noncompliance

02 October 2019 Innovative Technology Insights Blog

This week, on October 1, 2019, the Nevada State Privacy law goes into effect. Nevada residents can look forward to a limited right to opt out of sales of personal information. Businesses subject to both laws will be pleased to find that the new Nevada law shares similar obligations to the California Consumer Privacy Act (CCPA). 

The good news for businesses subject to both laws is that the Nevada privacy law is substantially narrower in scope in comparison to the California privacy law. 

Businesses who provide goods or services to Nevada citizens and who operate an internet website will be subject to the new Nevada law if the business collects and maintains personal information of Nevada citizens. 

However, the Nevada law narrowly defines the term sale. Under the law sales are exchanges of personal information for monetary consideration by the online operator to a person for the person to license or sell the personal information to additional persons. Unlike CCPA where a disclosure can be deemed a sale, the Nevada law requires an exchange of monetary consideration and a subsequent sale of that personal information must be intended by the parties.

Under the Nevada law there are a substantial number of exemptions including broad exemptions for financial institutions subject to Gramm-Leach-Bliley Act (GLBA), entities that are subject to the Health Insurance Portability and Accountability Act, manufacturers and servicers of motor vehicles, and service providers of the business. The Nevada law also exempts out a number of business activities, such as: disclosures to a service provider, disclosures for the purposes of providing products or services requested by the consumer, disclosures for purposes that are consistent with a consumer’s reasonable expectations in light of the context of the collection of that information, disclosures to affiliates, and disclosures as part of a merger, acquisition, bankruptcy or other transfer of assets. Businesses who are subject to both the Nevada law and CCPA should pay careful attention to the differences between the exemptions if the business is subject to GLBA.

For most businesses, the exemption for disclosures to service providers and affiliates will exclude most disclosures from the opt-out requirements. As such, this law has a very narrow application to most businesses, providing consumers with a narrowly tailored opt-out of sales to persons who will further sell that data (generally known in the industry as data brokers). 

Under the law, businesses have minimal obligations for compliance. A business must post a privacy notice on its website, designate a contact method for consumers to opt-out, reasonably authenticate the identity of the consumer to verify the request, comply with a Consumer’s opt out of sales request, and respond to a consumer’s opt out request. Unlike CCPA, the Nevada law does not have any new or uncommon notice requirements; however, a violation of the notice requirement may now result in a regulatory action by the Nevada Attorney General as discussed below. The consumers opt-out applies to both data already held by the business and data that is collected after the opt-out request is submitted. A business has a generous 60 days to respond to the consumer’s request to opt-out, extendable by an addition 30 days if reasonably necessary.

Generally, most businesses subject to both laws have implemented or are preparing procedures for CCPA. A business subject to both laws may use the same procedures for Nevada residents that it uses for California residents; however, a business who does so is providing more rights to a Nevada consumer than the law requires. In particular, the opt-out procedures for a California resident must prevent all sales of personal information; whereas, for consumers in Nevada the opt-out procedures should be tailored to prevent sales to data brokers. Businesses may operationalize the distinct opt-out processes with technical solutions that flag the individual’s account as either not eligible for any sales or as not eligible for sales to data brokers. The 60 days a business has to respond to a consumer’s opt out allows sufficient time to implement the technical solutions for compliance with both laws. 

For businesses who are only subject to the Nevada law, it is not too late to implement procedures for compliance with the new law. With minimal compliance obligations and sixty days to respond to your first opt-out request, businesses have ample time to implement the required procedures to remain in compliance with the new law.

While the Nevada law does not provide consumers with a private right of action, it also does not contain a 30 day right to cure. With violations resulting in injunctions on activities or fines of $5000 for each violation of the act, businesses should not delay in implementing requirements to ensure its compliance with the act. 

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