March 2024

1. Governing Texts

1.1. Key acts, regulations, directives, bills

The Consumer Data Privacy Act ('the Act') is set to be codified within Chapter 14 of Title 30 of the Montana Code Annotated and was signed by the Governor of Montana on May 18, 2023. The Act will enter into effect on October 1, 2024.

1.2. Guidelines

No further information.

1.3. Case law

No further information.

2. Scope of Application

2.1. Personal scope

The Act is applicable to persons that conduct business in Montana or produce products or services that are targeted to Montana residents and (Section 3 of the Act):

• control or process the personal data of not less than 50,000 consumers, excluding personal data controlled or processed solely for the purpose of completing a payment transaction; or
• control or process the personal data of not less than 25,000 consumers and derive more than 25% of gross revenue from the sale of personal data.

However, the Act clarifies that any state agency, body, authority, board, bureau, commission, district, or political subdivision of the state, financial institutions, affiliates of financial institutions governed by the Gramm-Leach-Bliley Act of 1999 ('GLBA'), associations registered under the Securities Exchange Act of 1934 ('SEA'), and entities subject to the Health Insurance Portability and Accountability Act of 1996 ('HIPAA') are not subject to the Act. In addition, non-profit organizations and institutions of higher education also fall out of the Act's scope (Section 4(1) of the Act).

2.2. Territorial scope

The Act is applicable to persons that conduct business in Montana or produce products or services that are targeted to residents of Montana (Section 3 of the Act).

2.3. Material scope

Certain types of information are exempt under the Act, including (Section 4(2) of the Act):

• protected health information under HIPAA;
• information derived from any of the healthcare-related information mentioned above, including information deidentified in accordance with the requirements for deidentification pursuant to the privacy regulations of HIPAA;
• the collection, maintenance, disclosure, sale, communication, or use of any personal information bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living by a consumer reporting agency, furnisher, or user that provides information for use in a consumer report and by a user of a consumer report, but only to the extent that the activity is regulated by, and authorized under, the Fair Credit Reporting Act of 1970 ('FCRA');
• data processed or maintained:
  • by an individual applying to, employed by, or acting as an agent or independent contractor of a controller, processor, or third party to the extent that the data is collected and used within the context of that role;
  • that is necessary to retain to administer benefits for another individual relating to the individual who is the subject of the information under HIPAA and is used for the purposes of administering the benefits; or
  • as the emergency contact information of an individual and used for emergency contact purposes; and/or
• personal data regulated by the Family Educational Rights and Privacy Act of 1974 ('FERPA').

Furthermore, the Act does not apply to a person's processing of personal data during the person's personal or household activities (Section 11(5)(b) of the Act).

3. Data Protection Authority | Regulatory Authority 

3.1. Main regulator for data protection

The Montana Attorney General ('AG') is the regulator within Montana.

3.2. Main powers, duties and responsibilities

In accordance with Section 12(1) of the Act, the AG will have exclusive authority to enforce the Act.

4. Key Definitions

Data controller: is defined as an individual or legal entity that, alone or jointly with others, determines the purpose and means of processing personal data (Section 2(8) of the Act).

Data processor: is defined as an individual or legal entity that processes personal data on behalf of a controller (Section 2(18) of the Act).

Personal data: is defined as any information that is linked or reasonably linkable to an identified or identifiable individual, with the exclusion of deidentified data or publicly available information (Section 2(15) of the Act).

Sensitive data: is defined as a category of personal data that includes (Section 2(24) of the Act):

• data revealing racial or ethnic origin, religious beliefs, a mental or physical health condition or diagnosis, information about a person's sex life, sexual orientation, or citizenship or immigration status;
• the processing of genetic or biometric data for the purpose of uniquely identifying an individual;
• personal data collected from a known child; or
• precise geolocation data.

Health data: The Act does not provide a definition for 'health data'. However, 'protected health information' has the same meaning as provided in the HIPAA. 

Biometric data: is defined as data generated by automatic measurements of an individual's biological characteristics, such as a fingerprint, a voiceprint, eye retinas, irises, or other unique biological patterns or characteristics that are used to identify a specific individual (Section 2(3) of the Act). The term does not include (Section 2(3) of the Act):

• a digital or physical photograph;
• an audio or video recording; or
• any data generated from a digital or physical photograph or an audio or video recording, unless that data is generated to identify a specific individual.

Pseudonymization: The Act defines 'pseudonymous data' as personal data that cannot be attributed to a specific individual without the use of additional information, provided the additional information is kept separately and is subject to appropriate technical and organizational measures to ensure that the personal data is not attributed to an identified or identifiable individual (Section 2(21) of the Act).

Data subject: The Act does not provide a definition for 'data subject' however 'consumer' is defined as an individual who is a resident of Montana, excluding individuals acting in a commercial or employment context or as an employee, owner, director, officer, or contractor of a company, partnership, sole proprietorship, non-profit, or government agency whose communications or transactions with the controller occur solely within the context of that individual's role with the company, partnership, sole proprietorship, non-profit, or government agency (Section 2(6) of the Act).

5. Legal Bases

The Act notes that personal data processed by a controller for a purpose authorized under Section 11 of the Act may be processed to the extent that such processing is (Section 11(6) of the Act):

• reasonably necessary and proportionate to the purposes listed in this section;
• adequate, relevant, and limited to what is necessary in relation to the specific purposes listed in this section;
• personal data is collected, used, or retained pursuant to Section 11(2) of the Act considering the nature and purpose of the collection, use, or retention; and
• subject to reasonable administrative, technical, and physical measures to protect the confidentiality, integrity, and accessibility of personal data and to reduce reasonably foreseeable risks of harm to consumers relating to the collection, use, or retention of personal data.

5.1. Consent

The Act outlines that subject to the provisions of the Act, a controller must not process personal data for purposes that are neither reasonably necessary for, nor compatible with, the disclosed purposes for which the personal data is processed unless the controller obtains the consumer's consent (Section 7(2)(a) of the Act). 

In addition, the controller must provide an effective mechanism for a consumer to revoke their consent that is at least as easy as the mechanism by which the consumer provided the consumer's consent and on the revocation of the consent, cease to process the personal data as soon as practicable, but not later than 45 days after the receipt of the request (Section 7(1)(c) of the Act).

In this regard, 'consent' is defined as a clear affirmative act signifying a consumer's freely given, specific, informed, and unambiguous agreement to allow the processing of personal data relating to the consumer. The term may include a written statement, a statement by electronic means, or any other unambiguous affirmative action (Section 2(5)(a) of the Act). The term 'consent' does not include:

• acceptance of a general or broad terms of use or similar document that contains descriptions of personal data processing along with other, unrelated information;
• hovering over, muting, pausing, or closing a given piece of content; or
• agreement obtained through the use of dark patterns.

5.2. Contract with the data subject

The Act provides that nothing provided within may restrict a controller or processor's ability to provide products or services specifically requested by a consumer, perform a contract to which the consumer is a party, including fulfilling the terms of a written warranty, or take steps at the request of the consumer before entering into a contract (Section 11(1)(e) to (g) of the Act).

5.3. Legal obligations

The Act also provides that nothing provided within may restrict the ability of controllers or processors to (Section 11(1) (a) to (d) of the Act):

• comply with federal, state, or municipal ordinances or regulations;
• comply with a civil, criminal, or regulatory inquiry, investigation, subpoena, or summons by federal, state, municipal, or other governmental authorities;
• cooperate with law enforcement agencies concerning conduct or activity that the controller or processor reasonably and in good faith believes may violate federal, state, or municipal ordinances or regulations; or
• investigate, establish, exercise, prepare for, or defend legal claims.

5.4. Interests of the data subject

The Act provides that nothing provided within may restrict the ability of controllers or processors to take immediate steps to protect an interest that is essential for the life or physical safety of the consumer or another individual, and where the processing cannot be manifestly based on another legal basis (Section 11(1)(h) of the Act).

5.5. Public interest

The Act provides that nothing provided within may restrict the ability of controllers or processors to engage in public or peer-reviewed scientific or statistical research in the public interest that adheres to all other applicable ethics and privacy laws and is approved, monitored, and governed by an institutional review board, or similar independent oversight entities, that determine the following (Section 11(1)(j) of the Act):

• if the deletion of the information is likely to provide substantial benefits that do not exclusively accrue to the controller;
• the expected benefits of the research outweigh the privacy risks; and
• if the controller has implemented reasonable safeguards to mitigate privacy risks associated with research, including any risks associated with re-identification.

5.6. Legitimate interests of the data controller

The Act does not explicitly address the legitimate interest of the controller.

However, the Act provides that nothing within may restrict the ability of controllers or processors to (Section 11(1)(i) and (k) of the Act):

• prevent, detect, protect against, or respond to security incidents, identity theft, fraud, harassment, malicious or deceptive activities, or any illegal activity;
• preserve the integrity or security of systems, or investigate, report, or prosecute those responsible for any of these actions; and
• assist another controller, processor, or third party with any obligation under the Act.

Additionally, the Act provides that the obligations imposed on a controller or processor under its provisions will not restrict the controller's or processor's ability to collect, use, or retain personal data for internal use to (Section 11(2) of the Act):

• conduct internal research to develop, improve, or repair products, services, or technology;
• effectuate a product recall;
• identify and repair technical errors that impair existing or intended functionality; or
• perform internal operations that are reasonably aligned with the expectations of the consumer or reasonably anticipated based on the consumer's existing relationship with the controller or are otherwise compatible with processing data in furtherance of the provision of a product or service specifically requested by a consumer or the performance of a contract to which the consumer is a party.

5.7. Legal bases in other instances

The obligations imposed on controllers or processors will not apply where compliance by the controller or processor would violate an evidentiary privilege under the laws of the state. In addition, nothing with the  Act should be construed to prevent a controller or processor from providing personal data concerning a consumer to a person covered by an evidentiary privilege under the laws of the state as part of a privileged communication (Section 11(1)(A)(3) of the Act).

6. Principles

The Act specifies that controllers must limit the collection of personal data to what is adequate, relevant, and reasonably necessary in relation to the purposes for which such data is processed, as disclosed to the consumer (Section 7(1)(a) of the Act). Additionally, and as mentioned above in the section on consent as a legal basis, except as otherwise provided in the Act, controllers must not process personal data for purposes that are neither reasonably necessary for, nor compatible with, the disclosed purposes for which the personal data is processed unless the consumer's consent is obtained (Section 7(2)(a) of the Act).

Furthermore, controllers must establish, implement, and maintain reasonable administrative, technical, and physical data security practices to protect the confidentiality, integrity, and accessibility of personal data appropriate to the volume and nature of the personal data at issue (Section 7(1)(b) of the Act).

7. Controller and Processor Obligations

De-identified data and pseudonymous data

In particular, the Act specifies that a controller processing de-identified data must (Section 10 (1) of the Act):

• take reasonable measures to ensure the data cannot be associated with an individual;
• publicly commit to maintaining and using de-identified data without attempting to re-identify the data; and
• contractually obligate recipients of the de-identified data to comply with all provisions of the Act.

However, the Act clarifies that it must not be construed to require a controller or processor to (Section 10 (2) of the Act):

• re-identify de-identified data or pseudonymous data;
• maintain data in the identifiable form; or
• collect, obtain, retain, or access any data or technology to be capable of associating an authenticated consumer request with personal data.

Furthermore, a controller that discloses pseudonymous data or deidentified data must exercise reasonable oversight to monitor compliance with any contractual commitments to which the pseudonymous data or deidentified data is subject and take appropriate steps to address any breaches of those contractual commitments (Section 10(5) of the Act).

7.1. Data processing notification

Not applicable.

7.2. Data transfers

The Act does not specifically address data transfers, but defines the 'sale of personal data' as the means the exchange of personal data for monetary or other valuable consideration by the controller to a third party, noting that this does not include (Section 1(23) of the Act):

• the disclosure of personal data to a third party for the purposes of providing a product or service requested by the consumer;
• the disclosure or transfer of personal data to an affiliate of the controller;
• the disclosure of personal data in which the consumer directs the controller to disclose the personal data or intentionally uses the controller to interact with a third party; the disclosure of personal data that the consumer:
  • intentionally made available to the public via a channel of mass media;
  • did not restrict to a specific audience; or
• the disclosure or transfer of personal data to a third party as an asset that is part of a merger, acquisition, bankruptcy, or other transaction, or a proposed merger, acquisition, bankruptcy, or other transaction in which the third party assumes control of all or part of the controller's assets.

Furthermore, the Act stipulates that a controller or processor that discloses personal data to a processor or third-party controller in accordance with the Act shall not be deemed to have violated the same if the processor or third-party controller that receives and processes such personal data violates said sections, provided, at the time the disclosing controller or processor disclosed such personal data, the disclosing controller or processor did not have actual knowledge that the receiving processor or third-party controller would violate the Act. In addition, a third-party controller or processor receiving personal data from a controller or processor in compliance with Act is likewise not in violation of said sections for the transgressions of the controller or processor from which such third-party controller or processor receives such personal data.

7.3. Data processing records

Not applicable.

7.4. Data protection impact assessment

The Act requires controllers to conduct and document DPAs for each of the controller's processing activities that present a heightened risk of harm to a consumer. For the purposes of the Act, processing that presents a heightened risk of harm to a consumer includes (Section 9(1) of the Act):

• the processing of personal data for targeted advertising;
• the sale of personal data;
• the processing of personal data for purposes of profiling, if such profiling presents a reasonably foreseeable risk of:
  • unfair or deceptive treatment of, or unlawful disparate impact on, consumers;
  • financial, physical, or reputational injury to consumers;
  • a physical or other forms of intrusion on the solitude or seclusion or the private affairs or concerns of consumers in which the intrusion would be offensive to a reasonable person; or
  • other substantial injuries to consumers; and
• the processing of sensitive data.

Importantly, the Act specifies that this requirement is applicable to processing activities created or generated after January 1, 2025, and does not apply retrospectively (Section 9(6) of the Act).

Method

A single DPA may address a comparable set of processing operations that include similar activities (Section 9(4) of the Act). With regard to the manner in which DPAs must be conducted, the Act outlines that DPAs must identify and weigh the benefits that may flow, directly and indirectly, from the processing to the controller, the consumer, other stakeholders, and the public against the potential risks to the rights of the consumer associated with the processing as mitigated by safeguards that may be employed by the controller to reduce these risks (Section 9(2)(a) of the Act). In this regard, the use of deidentified data and the reasonable expectations of consumers, as well as the context of the processing and the relationship between the controller and the consumer whose personal data will be processed shall be factored into this assessment (Section 9(2)(b) of the Act).

A DPA conducted by a controller for the purpose of compliance with other laws or regulations may be used to comply with this section if the assessment has a reasonably comparable scope and effect to the data protection assessment that would otherwise be conducted pursuant to the Act (Section 9(5) of the Act).

AG powers

The AG may request a controller disclose a DPA that is relevant to an investigation it is conducting. Upon receipt of such a request, the controller must make the DPA available to the AG. The AG may also evaluate the DPA for a controller's compliance with the responsibilities set forth in the Act. Nevertheless, the Act confirms that DPAs are confidential and exempt from disclosure under the Freedom of Information Act of 1966 (Section 9(3) of the Act).

7.5. Data protection officer appointment

The Act does not address the appointment of data protection officers.

7.6. Data breach notification

The Act only states that data processors must adhere to the instructions of a controller and assist them in meeting their obligations under the Act, including, considering the nature of processing and the information available to the processor, by assisting the controller in meeting the controller's obligations in relation to the security of processing the personal data, and in relation to the notification of a breach of security of the system of the processor to meet the controller's obligations (Section 8(1)(b) of the Act).

For further information see Montana – Data Breach.

7.7. Data retention

The Act does not expressly address data retention requirements.

7.8. Children's data

The Act classifies personal data collection from a known child as 'sensitive data' (Section 2(24)(c) of the Act) and further notes that in the case of a known child, controllers must process sensitive data in accordance with the Children's Online Privacy Protection Act of 1998 ('COPPA') (Section 7(2)(b) of the Act).

In addition, the Act provides that a controller may not process the personal data of a consumer for the purposes of targeted advertising or sell the consumer's personal data without the consumer's consent when a controller has actual knowledge that the consumer is at least 13 years of age but younger than 16 years of age.

Additionally, the Act provides that a known child's parent or legal guardian may invoke consumer rights on behalf of the known child regarding processing personal data belonging to the child (Section 5(3)(b) of the Act).

7.9. Special categories of personal data

Regarding sensitive data, controllers must not process sensitive data concerning a consumer without obtaining the consumer's consent (Section 7(2)(b) of the Act).

7.10. Controller and processor contracts

The Act provides that a contract between a controller and a processor must govern the processor's data processing procedures with respect to processing performed on behalf of the controller. In particular, such a contract must be binding and clearly set forth instructions for processing data, the nature and purpose of processing, the type of data subject to processing, the duration of the processing, and the rights and obligations of both parties (Section 8(2) of the Act). Controller processor contracts under the Act must (Section 8(2) (a) to (e) of the Act):

• ensure that each person processing personal data is subject to a duty of confidentiality with respect to the data;
• at the controller's direction, delete or return all personal data to the controller as requested at the end of the provision of services, unless retention of the personal data is required by law;
• upon the reasonable request of the controller, make available to the controller all information in the processor's possession necessary to demonstrate the processor's compliance with the obligations under the Act;
• allow, and cooperate with, reasonable assessments by the controller or their designated assessor - alternatively, the processor may arrange for a qualified and independent assessor to conduct the assessment of its policies and technical and organizational measures, which must be reported to the controller upon request; and
• engage any subcontractor or agent pursuant to a written contract that requires the subcontractor to meet the duties of the processor with respect to personal data.

Additionally, the Act notes that processors must adhere to the instructions of controllers and assist the same in meeting their obligations under the Act, which includes the following (Section 8 (1) of the Act):

• fulfill the controller's obligation to respond to consumer rights requests, considering the nature of processing and the information available to the processor by appropriate technical and organizational measures as much as reasonably practicable;
• assist the controller in meeting their obligations in relation to the security of processing the personal data and to the notification of a breach of security of the system of the processor, considering the nature of processing and the information available to the processor; and
• provide the necessary information to enable the controller to conduct and document DPAs.

In determining whether a person is acting as a controller or processor with respect to specific processing of data, the Act explains that it is a fact-based determination that depends upon the context in which personal data is to be processed. To this end, a processor that continues to adhere to a controller's instructions with respect to the specific processing of personal data remains a processor (Section 8(4) of the Act).

Importantly, the Act clarifies that none of its provisions can be construed to relieve a controller or a processor from the liabilities imposed on the controller or processor by virtue of its role in the processing relationship (Section 8(3) of the Act).

Furthermore, with regard to the processing of de-identified or pseudonymous data, a controller that discloses any such data must exercise reasonable oversight to monitor compliance with any contractual commitments to which the pseudonymous data or de-identified data is subject and must take appropriate steps to address any breaches of those contractual commitments (Section 10(5) of the Act).

8. Data Subject Rights

The Act establishes consumer rights that may be exercised by a secure and reliable means established by the controller and are described to the consumer in the controller's privacy notice (Section 5(2) of the Act). These rights can also be invoked by a known child's parent or legal guardian on behalf of the known child regarding the processing of personal data (Section 5(3)(b) of the Act). Notably, consumers may designate an authorized agent to exercise the consumer's right to opt out of the processing of their personal data, where such right is provided for by the Act, on behalf of the same consumer (Section 5(3)(a) of the Act).

A controller must not discriminate against a consumer for exercising any of the consumer rights, including denying goods or services, charging different prices or rates for goods or services, or providing a different level of quality of goods or services to the consumer. This should not be construed to require a controller to provide a product or service that requires the personal data of a consumer that the controller does not collect or maintain or prohibit a controller from offering a different price, rate, level, quality, or selection of goods or services to a consumer, including offering goods or services for no fee, if the consumer has exercised their right to opt-out or the offering is in connection with a consumer's voluntary participation in a bona fide loyalty, rewards, premium features, discounts, or club card program (§§7(2)(e) and 7(3) of the Act).

Timeline

In line with the above, the Act establishes provisions for complying with consumer rights requests, providing that controllers must respond to consumers without undue delay, and in any case no later than 45 days after receipt of a request (Section 5(4) of the Act). The timeframe for a response may be extended by an additional 45 days when reasonably necessary, considering the complexity and number of consumer requests. However, in such cases, the consumer must be informed of the extension within the original 45-day timeframe, together with the reason for the extension (Section 5(4) of the Act). Equally, the Act stipulates that controllers must inform data subjects without undue delay when declining to take action within the same timeframe, along with the reason for declining to take action, and instructions on how to appeal the decision (Section 5(4) of the Act).

Importantly, the Act stipulates that the controller is responsible for establishing a process for a consumer to appeal refusals within a reasonable period after the consumer receives such a decision from the controller (Section 5(5) of the Act).

Fees

In relation to the charging of fees, the Act establishes that information provided in response to a consumer request must be provided by a controller, free of charge, once for each consumer during any 12-month period. If requests from a consumer are manifestly unfounded, excessive, technically infeasible, or repetitive, the controller may charge the consumer a reasonable fee to cover the administrative costs of complying with the request or decline to act on the request. However, the controller bears the burden of demonstrating the manifestly unfounded, excessive, technically infeasible, or repetitive nature of the request (Section 10(4)(d) of the Act).

Authentication

Where a controller is unable to authenticate a request to exercise any of the rights afforded using commercially reasonable efforts, the controller may not be required to comply with a request but must provide notice to the consumer that the controller is unable to authenticate the request until the consumer provides additional information reasonably necessary to authenticate the consumer and the request. A controller may not be required to authenticate an opt-out request but may deny an opt-out request if the controller has a good faith, reasonable, and documented belief that the request is fraudulent. If a controller denies an opt-out request because the controller believes the request is fraudulent, they should send a notice to the person who made the request disclosing that they believe the request is fraudulent and will not comply with the request.

Exceptions

Furthermore, a controller or processor is not required to comply with an authenticated consumer rights request, where the conditions below are met (Section 10(3) of the Act):

• the controller is not reasonably capable of associating the request with the personal data or it would be unreasonably burdensome for the controller to associate the request with the personal data;
• the controller does not use the personal data to recognize or respond to the specific consumer who is the subject of the personal data, or associate the personal data with other personal data about the same specific consumer; and
• the controller does not sell the personal data to any third party or otherwise voluntarily disclose the personal data to any third party other than a processor, except as otherwise permitted by the Act.

The Act highlights that the consumer rights afforded under the same may not apply to pseudonymous data in cases in which the controller is able to demonstrate that any information necessary to identify the consumer is kept separately and is subject to effective technical and organizational controls that prevent the controller from accessing the information (Section 10(4) of the Act).

8.1. Right to be informed

The Act outlines that controllers must provide consumers with a reasonably accessible, clear, and meaningful privacy notice that includes (Section 7(5) of the Act):

• the categories of personal data processed by the controller;
• the purpose for processing personal data;
• how consumers may exercise their consumer rights under the Act, including how a consumer may appeal a controller's decision with regard to the consumer's request;
• an active e-mail address or other mechanisms that the consumer may use to contact the controller;
• the categories of personal data that the controller shares with third parties, if any; and
• the categories of third parties, if any, with whom the controller shares personal data.

Specifically, the Act specifies that controllers must establish and describe in a privacy notice one or more secure and reliable means for consumers to submit a request to exercise their consumer rights pursuant to the Act. Such means must take into account (Section 7(6) of the Act):

• the ways in which consumers normally interact with the controller;
• the need for the secure and reliable communication of such requests; and
• the ability of the controller to authenticate the identity of the consumer making the request.

In addition, where a controller sells personal data to third parties or processes personal data for targeted advertising, the controller must clearly and conspicuously disclose the processing, as well as the way a consumer may exercise the right to opt out of the processing (Section 7(4) of the Act).

8.2. Right to access

The Act provides consumers with the right to confirm whether a controller is processing the consumer's personal data and accessing the consumer's personal data unless such confirmation or access would require the controller to reveal a trade secret (Section 5(1)(a) of the Act).

8.3. Right to rectification

The Act provides consumers with the right to correct inaccuracies in their personal data, considering the nature of the personal data and the purposes of the processing of the consumer's personal data (Section 5(1)(b) of the Act).

8.4. Right to erasure

The Act provides consumers with the right to delete their personal data (Section 5(1)(c) of the Act).

Furthermore, in relation to personal data obtained from a source other than the consumer, the Act states that any controller that has obtained such data will be deemed in compliance with the consumer's request to delete the consumer's data if that controller retains a record of the deletion request and the minimum data necessary for the purpose of ensuring the consumer's personal data remains deleted from the controller's records and does not use the retained data for any other purpose pursuant to the provisions of the Act (Section 5(4)(e)(i) of the Act).

8.5. Right to object/opt-out

The Act provides consumers with the right to opt out of the processing of personal data for the purposes of targeted advertising, the sale of their personal data, or profiling in furtherance of solely automated decisions that produce legal or similarly significant effects concerning the consumer (Section 5(1)(e) of the Act).

Authorized agents

Interestingly, the Act introduces a provision pursuant to which a consumer may designate another person to serve as their authorized agent acting on the consumer's behalf to opt out of the processing of the consumer's personal data (Section 6(1) of the Act). The Act specifies that the designation of the authorized agent may be done by way of a technology indicating the consumer's intent to opt out of the processing of their personal data. Controllers receiving an opt-out request from an authorized agent must comply with it if they are able to verify, with commercially reasonable effort, the identity of the consumer and the authorized agent's authority to act on their behalf (Section 6(2) of the Act).

Methods

On opt-out methods which may be employed, the Act provides that they must possess certain characteristics, among which, for instance, the fact that they must (Section 6(3) of the Act):

• provide a clear and conspicuous link on the controller's internet website to the web page that enables a consumer, or their authorized agent, to opt out of the targeted advertising or sale of the consumer's personal data; and
• no later than January 1, 2025, allow a consumer to opt out of any processing of personal data for targeted advertising, or any sale of personal data through an opt-out preference signal sent with the consumer's consent, to the controller by a platform, technology, or mechanism that:
  • may not unfairly disadvantage another controller;
  • may not make use of a default setting, but require the consumer to make an affirmative, freely given, and unambiguous choice to opt out of any processing of a customer's personal data;
  • must be consumer-friendly and easy to use by the average consumer;
  • must be consistent with any federal or state law or regulation; and
  • must allow the controller to accurately determine whether the consumer is a resident of the state and whether the consumer has made a legitimate request to opt out of any sale of a consumer's personal data or targeted advertising.

8.6. Right to data portability

The Act provides for the right to obtain a copy of the consumer's personal data previously provided by the consumer to the controller in a portable and, to the extent technically feasible, readily usable format that allows the consumer to transmit the personal data to another controller without hindrance when the processing is carried out by automated means, provided the controller is not required to reveal any trade secret (Section 5(1)(d) of the Act).

8.7. Right not to be subject to automated decision-making

The Act does not expressly provide for the right not to be subject to automated decision-making, however, it defines 'profiling' as any form of automated processing performed on personal data to evaluate, analyze, or predict personal aspects related to an identified or identifiable individual's economic situation, health, personal preferences, interests, reliability, behavior, location, or movements (Section 2(19) of the Act).

As such, as far as automated decision-making falls within the definition of 'profiling', consumers have the right to opt out of such a processing activity as mentioned in the section on the right to opt-out above.

8.8. Other rights

No further information.

9. Penalties

The Act outlines that the AG has exclusive authority to enforce the Act's provisions (Section 12(1) of the Act).

Notably, the AG must issue a notice of violation to the controller, before initiating any action for a violation of the Act until April 1, 2026. If the controller fails to correct the violation within 60 days of receipt of the notice of violation, the AG may bring an action pursuant to the Act. Instead, if within the 60-day period, the controller corrects the noticed violation and provides the AG with an express written statement that the alleged violations have been corrected and that no such further violations will occur, no action can be initiated against the controller (Section 12(2) of the Act).

Crucially, the Act clarifies that nothing within the Act may be construed as providing the basis for, or be subject to, a private right of action for violations under the Act or any other law (Section 12(3) of the Act).

9.1 Enforcement decisions

Not applicable.