United States: Less Than A Month To Go Until Nevada Privacy Law Effective Date

As discussed in our previous blog post on the topic, Nevada's amendments to its privacy law are set to go into effect Oct. 1, 2019. Less comprehensive in scope than the much-heralded CCPA, the Nevada privacy law amendment has received significantly less attention than its California counterpart. Even so, the new Nevada privacy law presents its own compliance challenges that companies shouldn't overlook in the CCPA compliance scramble.

To see a countdown clock and find resources on how to prepare for Nevada's SB 220 and the CCPA, see our U.S. Consumer Privacy Resource Center.

Inconsistencies and Compliance Challenges

The amended Nevada privacy law establishes a requirement that "operators" of internet websites or online services set up a procedure whereby Nevada residents are given the opportunity to opt out of data sales. Specifically, organizations must establish a "designated request address"—which can be a toll-free phone number, email address, or internet website—where Nevada residents may submit requests to opt out of data sales. Companies must cease the sale of a Nevada resident's data upon receipt of a "verified request," defined as a "request submitted by a consumer ... for which an operator can reasonably verify the authenticity of the request and the identity of the consumer using commercially reasonable means."

Under the statute, "sale" is defined as "the exchange of covered information for monetary consideration by the operator to a person for the person to license or sell the covered information to additional persons." This definition is narrowly tailored to encompass only data transfers for monetary value wherein the parties contemplate additional downstream transfers of the data for monetary value. Additionally, several types of data transfers are exempted from the definition of sale, including:

  1. The disclosure of covered information by an operator to a person who processes the covered information on behalf of the operator;
  2. The disclosure of covered information by an operator to a person with whom the consumer has a direct relationship for the purposes of providing a product or service requested by the consumer;
  3. The disclosure of covered information by an operator to a person for purposes which are consistent with the reasonable expectations of a consumer, considering the context in which the consumer provided the covered information to the operator;
  4. The disclosure of covered information to a person who is an affiliate ... of the operator; or
  5. The disclosure or transfer of covered information to a person as an asset that is part of a merger, acquisition, bankruptcy or other transaction in which the person assumes control of all or part of the assets of the operator.

Presumably, if a company effectively notifies an individual about a data transfer, that transfer should be within "the reasonable expectations of [the] consumer." The Federal Trade Commission standard for effective notices and disclosures is "clear, conspicuous and proximate." A pre-collection notice at the point of collection would likely meet the standard. Disclosures in privacy policies are somewhat more suspect, especially if the nature of the disclosure would be unexpected and the disclosure is buried in hard-to-read text. That said, a privacy notice may be an effective way to avoid much of the potential coverage of the new law.

Thus, given the narrow definition of the term sale and the breadth of the exceptions, many organizations may not actually "sell" data as defined by the Nevada privacy law. However, the obligation to establish a designated request address where consumers can submit opt-out requests and have their identities verified through commercially reasonable means is not contingent on the fact that the company actually sells consumer data. Thus, under the plain language of the statute, organizations appear to be obligated to establish a designated request address and an identity verification procedure for opt-out requests, even if they are not currently selling data. There are lobbying efforts ongoing with the Nevada Legislature and Attorney General to try to get a clarification that the opt-out should only apply if there are actual sales, not merely a future potential for sales. In the meantime, there remains the verification requirement. Presumably, whether an identity verification method is commercially reasonable would depend on the sensitivity of the data and the nature of the collection and sharing. Thus, organizations that do not currently sell data appear to be placed in an untenable position by the statute: establish an opt-out procedure and identity verification method for hypothetical future data transfers or be out of compliance with the plain language of the statute.

Potential Solutions

Organizations seeking a solution to these compliance challenges are not without options. Companies that do not sell Nevada resident data arguably have statutory support for the proposition that they cannot establish a commercially reasonable identity verification method for types of sales that do not currently exist, and are not even contemplated, because the type of data that might be subject to hypothetical future sales is not knowable and therefore the standard for verification cannot be reasonably determined. A company would seem to have a good faith basis for taking the position that the most reasonable method of complying with opt-out obligations for currently nonexistent, hypothetical future sales of an unknown nature would be to notify consumers that it does not currently sell covered information as defined under the Nevada act, but that the consumer may register an email address to which identity verification instructions will be delivered if the company begins selling covered information, as defined by the act, in the future. It should be noted that this approach will still require companies to maintain a list of consumers who have decided to exercise their do-not-sell rights under the Nevada law. It is also advised that it be made clear to registrants that they must notify the company in a certain way if their email address changes, and that other records will not be searched. Further, if considering this approach, beware that, unlike other provisions of the Nevada online privacy law, the new do-not-sell provisions do not require the Attorney General to give notice and an opportunity to cure before commencing an enforcement action for civil penalties.

Conclusion

Each organization must consider its specific data collection, use and transfer practices to determine what approach will make the most sense to comply with the new Nevada requirements. Moreover, companies should review their online privacy policies to determine what additional disclosures should be made and should publish a designated request address. Though the statute does not permit a private right of action for violations of the do-not-sell requirements, the Nevada Attorney General is empowered to bring enforcement actions, with penalties of up to $5,000 and potential injunctive relief for alleged violations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions