Virginia’s Data Privacy Milestone: The VCDPA
The Virginia Consumer Data Protection Act (VCDPA), took effect on January 1, 2023, and follows the defunct Washington Privacy Act model. The VCDPA establishes rules for data handling and provides Virginians with greater control over their personal information.
What You Need to Know About Virginia’s Privacy Law
The VCDPA applies to you if your business:
- Is for-profit and conducts business in or provides commercial products or services that are targeted to residents (“consumers”) in Virginia, and
- Either annually controls or processes the personal information of:
- 100,000 residents; or
- At least 25,000 consumers and derives over 50% of gross revenue from the sale of personal information.
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The VCDPA exempts both certain data types and certain entities entirely. In addition, like almost every other state data privacy law, the VCDPA does not apply to individuals acting in an employment or commercial (B2B) context.
Exempt Data: The VCDPA exempts many different types of data from coverage under the law. Below is a list of some of the more commonly held data types that are exempt under the law. For a complete list, refer to the law or reach out to us at Red Clover Advisors, we would be happy to help you understand how your various data types effect your privacy obligations.
- Protected Health Information (PHI) under HIPAA
- Various federally and internationally protected health and patient information, including that protected by the Common Rule, human subject data, and more.
- Various forms of credit data regulated by the FCRA
- Data covered by a wide variety of other federal laws including FERPA data, FCA data and DPPA data.
Exempt Entities: The CTDPA also exempts many different types of entities from coverage under the law. Below is a list of some of the more commonly relevant entity types that are exempt. For a complete list, refer to the law or reach out to us at Red Clover Advisors, we would be happy to help you understand how your entity classification effect’s your privacy obligations.
- The state government and its various entities;
- GLBA covered entities;
- HIPAA covered entities;
- Non-profits; and
- Higher education institutions;
- Update their privacy notices to reflect the data collection purposes.
- Assess and, if necessary, obtain consent for processing sensitive personal data.
- Establish processes to respond to consumer rights requests effectively.
- Conduct Data Protection Assessments for certain types of data processing activities.
- Ensure that vendor contracts align with VCDPA requirements.
Key Components of Colorado’s Data Privacy Law
Personal information, called “Personal data” in the VCDPA, means any information that is linked or reasonably linkable to an identified or identifiable natural person. “Personal data” does not include de-identified data or publicly available information.
Where a controller processes de-identified data, the VCDPA requires them to take reasonable measures to ensure the data cannot be associated with an individual; publicly commit to maintaining such data without an attempt to re-identify it; and contractually obligate any recipients of the data to comply with the VCDPA.
Virginia exempts pseudonymous data where the controller can show it keeps information that would allow the data to be re-identified separate and subject to technical and organizational controls that prevent its access for use for re-identification.
Virginia definition of sensitive personal information consists of:
- Racial or ethnic origin;
- Religious beliefs;
- Mental or physical condition;
- Sexual orientation;
- Citizenship or immigration status
- Personal Data from a known child;
- Precise geolocation data;
- Genetic or biometric data.
In a word: Yes!
Parental consent is required to process personal information from a known child (under 13) in accordance with COPPA.
Under the VCDPA, a privacy notice must include (among other requirements):
- The categories of personal information processed;
- The purpose for processing personal information;
- Whether you sell or share personal information;
- The categories of third parties with which personal information is shared;
- The categories of personal information shared with third parties;
- The methods for a consumer to exercise their rights (see below) and appeal a decision on their rights request.
Virginia defines “sale” as: Exchange of personal information for monetary consideration by the controller to a third party.
There are limits on the definition of “sale” to ensure that certain business functions are not unintentionally impeded by this law. Examples of activities deemed not to be a sale include: the disclosure of personal data to provide a product or service requested by the consumer, the disclosure of personal data that had been intentionally made available to the public via a channel of mass media, and the disclosure of personal data as part of a merger or bankruptcy. For more, see the statue.
Like most state data privacy laws, the attorney general (AG) is the sole enforcement authority. Under the VCDPA, the AG may bring an enforcement action after providing a 30-day notice and an opportunity for the business to cure the alleged violation(s). The AG may seek injunctive relief (the company must stop certain behaviors) and/or civil penalties, with fines up to $7,500 per violation.
Privacy Rights
The privacy rights created under VCDPA generally align with those provided under other state laws. If the VCDPA applies to your business, you must allow consumers to:
- Right to know whether a business is processing your personal information;
- Right to access personal information;
- Right to correct inaccuracies in personal information;
- Right to delete personal information;
- Right to obtain a copy of personal information (data portability); and
- Right to opt out of the sale of personal information, processing for targeted advertising, or profiling in furtherance of automated decisions that produce legal or similarly significant effects.
The VCDPA requires that businesses respond to privacy rights requests within 45 days of receipt of the request, with a permissible 45-day extension in limited circumstances. Responses must be provided free of charge twice annually. Businesses may deny a rights request in certain circumstances. When a business denies a request, the business must notify the consumer within the 45-day timeframe and provide the reason for the denial as well as instructions for how to appeal the decision.
The appeal process must be conspicuously available to the consumer and similar to the process for submitting requests. Businesses must respond to appeals within 60 days. If the appeal is denied, the controller shall also provide the consumer with an online mechanism, if available, or other method through which the consumer may contact the AG to submit a complaint.
Data Protection Assessments (also known as Privacy Impact Assessments aka PIAs)
The VCDPA requires that businesses conduct data protection or privacy impact assessments in certain circumstances, including:
- Processing for targeted advertising;
- Processing sensitive personal information;
- Selling personal information;
- Processing for the purposes of profiling in certain circumstances;
- Any processing activities involving personal information that present a heightened risk of harm to consumers.
Vendor Contracts
Virginia requires controllers to enter into a contract that dictates how a processor (also called service provider or vendor) may process personal information the controller shares with it. Contracts must have instructions for processing the personal information, the nature and purpose of the processing, the type of data that is subject to processing, the duration of processing, and the rights and obligations of both parties.
In addition, the contract must require that the processor:
- Ensure that each person who processes personal information is subject to a duty of confidentiality;
- Delete or return all Personal Data at the controller’s direction or when it has completed the services, unless retention of the personal information is required by law;
- Make available all information necessary to demonstrate the processor’s compliance with its obligations;
- Allow and cooperate with audits by the controller, or an independent auditor to review its policies and practices, and provide a report of the assessment to the controller; and
- Pass along the same obligations to any subcontractors in a written contract.
Data Privacy is Just Good Business
Managing privacy compliance with all these new state privacy laws popping up in the U.S., might seem like a daunting task. But just because the task appears daunting, it doesn’t mean that it’s impossible to handle.
You don’t have to go at it alone! With the right support, you can make data privacy measures a sustainable part of your daily operations. That’s where Red Clover Advisors comes in – to deliver practical, actionable, business-friendly privacy strategies to help you achieve data privacy compliance and establish yourself as a consumer-friendly privacy champion that customers will appreciate.
