The Virginia Consumer Data Protection Act
What You Need to Know About Virginia’s Privacy Law
The VCDPA applies to for-profit entities that:
- Conduct business in or provide commercial products or services that are targeted to residents of Virginia (consumers), and
- Annually controls or processes the personal information of either:
- 100,000 residents; or
- At least 25,000 consumers and derives at least 50% of gross revenue from the sale of personal information.
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Exempt Entities: Exempt entities include:
- State government entities;
- GLBA-covered entities;
- HIPAA-covered entities and business associates;
- Non-profits; and
- Higher education institutions.
Exempt Data: The VCDPA exempts a long list of personal information, including but not limited to:
- Protected Health Information 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; and
- Data covered by a wide variety of other federal laws including Fair Credit Reporting Act; and
- Data covered by a wide variety of other federal laws including the Family Educational Rights and Privacy Act, Farm Credit Act, and Driver’s Privacy Protection Act.
Exempt Use Cases: The VCDPA is not applicable in some circumstances, such as:
- Processing PI in an employment or commercial (B2B) context;
- Processing PI for emergency contact purposes; and
- Processing PI of another individual in relation to the provision of benefits.
In addition, the VCDPA specifies that its law should not be construed to restrict a business’s collection, use, or retention of PI for:
- Conducting internal research for development, improvement, and repair of products, services, and technology (R&D);
- Product recalls;
- Identifying and repairing technical errors that impair existing or intended functionality; and
- Performing internal operations.
Key Components of Colorado’s Data Privacy Law
The VCDPA covers “personal data,” also called personal information or PI, which Virginia has defined as any information that is linked or reasonably linkable to an identified or identifiable natural person. The definition exempts de-identified and information made publicly available by government records, the media, or the consumer.
Virginia definition of sensitive PI consists of:
- Racial or ethnic origin;
- Religious beliefs;
- Mental or physical diagnosis;
- Sexual orientation;
- Citizenship or immigration status;
- PI from a known child;
- Precise geolocation data;
- Genetic or biometric data for the purpose of identification.
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.
Additionally, Virginia exempts pseudonymous data from access, correction, and deletion rights requests 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 use for re-identification.
In a word: Yes!
Parental consent is required to process personal information from a known child (under 13) in accordance with COPPA.
Consent is also required for secondary use of information that is not necessary or compatible with the purpose for collection and hasn’t been noticed to the consumer.
Under the VCDPA, a privacy notice must include (among other requirements):
- The categories of PI processed;
- The purpose for processing PI;
- Categories of PI shared with third parties;
- Categories of third parties with which PI is shared;
- The categories of PI shared with third parties;
- Description of targeted advertising and selling activities including a procedure for opting out of the processing for these purposes; and
- The methods for a consumer to exercise their rights (see below) and appeal a decision on their rights request.
Virginia defines “sale” as the 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 PI to provide a product or service requested by the consumer, the disclosure of PI to an affiliate, disclosure of PI intentionally made public, and the disclosure of PI as part of a merger or bankruptcy.
Virginia’s Attorney General (AG) is the sole enforcement authority for VCDPA. Under the law, 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 plus attorney’s fees, investigative costs, and any other relief the court determines appropriate.
Privacy Rights
If VCDPA applies to your business, you must provide the following privacy rights to consumers:
- Right to know whether a business is processing your PI;
- Right to access PI;
- Right to correct inaccuracies in PI;
- Right to delete PI about them;
- Right to obtain a copy of PI (data portability); and
- Right to opt out of the sale of personal information, processing for targeted advertising, or profiling in furtherance of 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, including inability to verify the identity of a requestor. 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 appeals process must be conspicuously available to consumers and similar to the process for submitting an initial privacy rights request. Businesses must respond to appeals within 60 days of receipt and, if denying an appeal, must provide the consumer with a method (online if available) to file a complaint with the attorney general.
Universal Opt Out
The VCDPA does not require that controllers recognize universal opt-out signals. Universal opt-out, or global privacy control, is a technical standard that enables users to automatically communicate their privacy preferences, such as opting out of the sale of their personal information, to websites through their web browsers or other technologies.
Privacy Impact Assessments
The VCDPA requires that businesses conduct data protection or privacy impact assessments in certain high-risk processing.
The VCDPA requires assessments for activities created or generated after January 1, 2023, that present a heightened risk of harm, specifically including:
- Processing for targeted advertising;
- Processing sensitive PI;
- Selling PI;
- Profiling that presents a ‘reasonably foreseeable risk’ of:
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- Unfair or deceptive treatment or unlawful disparate impact on consumers;
- Financial, physical, or reputational injury to consumers;
- Physical or other intrusion on the solitude or seclusion, or private affairs or concerns, which would be offensive to a reasonable person; or
- Other substantial injury.
Vendor Contracts
Virginia requires controllers to have a contract in place with vendors that dictates obligations with respect to processing PI. Contracts must include:
- Instructions for processing PI;
- The nature and purpose of processing;
- Type of data that is subject to processing;
- The duration of processing;
- A duty of confidentiality for individuals who process the PI;
- Obligation to delete or return all PI at the controller’s direction or when it has completed the services, unless retention of the PI is required by law;
- Obligation to make available all information necessary to demonstrate the vendor’s compliance with its obligations;
- Compliance with audits by the controller or independent auditor and to provide a report of the assessment to the controller; and
- Pass along obligations to any subcontractor in a written contract.
Data Minimization
The VCDPA limits the collection of PI “to what is adequate, relevant, and reasonably necessary in relation to the purposes for which such data is processed, as disclosed to the consumer.” Where processing is not necessary or compatible with the purpose for collection, organizations must obtain consumers’ consent for the processing.
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.
