CCPA penalties and fines: What are the consequences of noncompliance?

Resources / Blog / CCPA penalties and fines: What are the consequences of noncompliance?
Published by Usercentrics
9 mins to read
Jan 13, 2025

The California Consumer Privacy Act (CCPA), enacted in 2020, was the first and is one of the strictest data privacy laws in the US. Noncompliance can result in hefty fines, which can harm a company’s revenue and reputation.

The California Consumer Privacy Act (CCPA) has reshaped the way businesses operating in California handle consumer data since its enactment in 2020. Designed to give California residents more control over their personal information, the CCPA has serious consequences for companies that fail to comply. Penalties can range from USD 2,663 to USD 7,988 per violation (adjusted biannually to the Consumer Price Index), and if businesses neglect their obligations, fines can add up quickly.

Whether it’s by failing to respond to consumer rights requests or mishandling sensitive data, there are several ways businesses can fall short of compliance. With new requirements introduced under the California Privacy Rights Act (CPRA), which amended the CCPA, diligent CCPA compliance is crucial for any company that collects or shares personal data of California residents.

What is the California Consumer Privacy Act (CCPA)?

The California Consumer Privacy Act (CCPA) was a groundbreaking privacy law that grants California residents several rights and increased control over their personal information.

It applies to businesses that meet certain thresholds, such as gross annual revenues of over USD 26,625,000, handling data for 50,000 or more consumers, households, or devices (updated to 100,000 under the CPRA), or deriving 50 percent or more of annual revenue from selling personal information. 

California residents can request detailed information about how their personal data is used and shared. Businesses, in turn, must ensure compliance by implementing policies and procedures to meet these requirements.

Do you know the ins and outs of the California Consumer Privacy Act? The CCPA includes important consumer rights and business obligations.

Who is subject to CCPA penalties?

CCPA penalties apply to companies headquartered inside or outside California if they process California residents’ data, meet the CCPA thresholds, and have violated the law’s requirements. Additionally, service providers and third-party vendors may face consequences for CCPA noncompliance if their actions contribute to violations by a qualified business.

Organizations of all sizes and industries, from tech giants to small retailers, are subject to the law’s requirements if they process data belonging to California residents. Noncompliance risks are significant, particularly for businesses that rely heavily on consumer data for operations or marketing.

Types of CCPA violations

CCPA violations can take various forms, each with its own set of legal and financial consequences. Common violations include:

  • Failure to provide required notices: Businesses must inform consumers about their data collection practices. Failing to provide clear and accessible privacy notices is a common violation.
  • Ignoring consumer rights requests: Under the CCPA, consumers have the right to request access to their data, have their data deleted, or opt out of data sales. Failure to honor these requests is a significant violation.
  • Inadequate data security: Companies must implement reasonable security measures to protect personal information. A lack of adequate safeguards can lead to data breaches and noncompliance.
  • Selling personal information without consent: Selling personal data without obtaining proper consumer consent (like for data belonging to minors) where required is another serious violation.

These violations often stem from issues like poor data governance, outdated systems, or insufficient staff training. Any of these breaches can result in significant penalties — both financial and reputational — which means compliance should be a top priority for businesses.

Penalties for violating the CCPA

The California Attorney General and the California Privacy Protection Agency (CPPA) are responsible for enforcing California’s privacy laws, including the CCPA as amended by the California Privacy Rights Act (CPRA).

Civil penalties for violating the CCPA range from USD 2,663 to USD 7,988 per violation. Each affected person’s data can be considered a separate violation, so fines can escalate quickly. For instance, a violation, like a data breach, affecting thousands of customers at a company, could lead to fines in the millions.

Consumers also have a limited right to take legal action if they are impacted by a violation like a data breach, such as when encrypted personal data is disclosed. They can sue businesses for:

  • Compensation: USD 107 to USD 799 per person, per incident, or reimbursement for actual damages caused.
  • Court orders: Injunctions or declaratory relief to prevent further violations or clarify legal obligations.
  • Additional remedies: Any other relief the court deems reasonable.

It’s worth noting that the CPRA eliminated the 30-day cure period that was previously applied under the CCPA. Allowing a cure period, or opportunity to correct a violation without penalties, can still happen, but is only at the authorities’ discretion. This can mean increased enforcement faster for companies in violation of the law.

How big are CCPA fines for noncompliance?

The financial impact of CCPA fines depends on the scale and nature of the violation. For example, a data breach affecting 1,000 individuals could result in fines exceeding USD 2.5 million. Similarly, failing to address consumer requests in a timely manner can result in penalties that accumulate rapidly.

Examples of companies fined under CCPA

Several high-profile cases exemplify the risks of noncompliance with the CCPA.

French beauty retailer Sephora became the first company to face a significant fine under the CCPA in 2022. The beauty retailer agreed to pay USD 1.2 million to settle allegations that it failed to disclose the sale of consumer data and did not offer a proper mechanism for consumers to opt out of these sales. In addition to the fine, Sephora was required to update its privacy policies and implement stronger data handling practices. This case demonstrates the CCPA’s emphasis on transparency and consumer control over their personal information.

Another notable case involved American food ordering and delivery company DoorDash, which faced a fine of USD 375,000 in 2024. The company was found to have violated the CCPA by sharing its customers’ personal information with other businesses as part of a marketing cooperative in exchange for advertising opportunities. 

This enforcement action highlighted the CPRA’s key requirement to obtain explicit consent before sharing consumer data. The CCPA enabled consumers to opt out of the sale of their data, and the CPRA added the rights to also opt out of sharing of data, targeted advertising, or profiling.

CPRA penalties: Updates you need to know

The California Privacy Rights Act (CPRA) amended the CCPA, and introduced expanded enforcement mechanisms and higher standards for data protection. A key change is the establishment of the California Privacy Protection Agency (CPPA), which oversees compliance and enforcement. In addition to being able to opt out of sharing, targeted advertising, or profiling, consumers now have the right to limit the use of their sensitive personal information, such as biometric or health data. 

The CPRA also imposes stricter requirements for contracts with third-party vendors and increases scrutiny towards businesses that share data. These changes necessitate updates to compliance frameworks to mitigate new risks.

Reasons for penalties under CCPA and CPRA

Penalties under the CCPA and CPRA typically stem from a failure to meet the privacy requirements of these laws. Whether it’s by failing to respond to consumer requests, mishandling sensitive data, or lacking proper security measures, each violation reflects a company’s failure to meet the CCPA/CPRA standards for consumer protection and data privacy.

Below are some of the main reasons businesses are typically penalized under the CCPA and CPRA.

CCPA penalties

Under the CCPA, businesses can face penalties for several key violations, including:

  • Failure to honor consumer rights requests: Also called data subject access requests (DSAR), not responding to consumer requests for access to, deletion of, or opting out of data sales is one of the most common infractions.
  • Lack of transparency: Businesses must disclose how they collect, use, and sell personal data. Failing to provide clear and accessible privacy notices can result in significant penalties.
  • Inadequate data security: Companies are required to implement reasonable measures to protect personal data. Additionally, in the event of a breach, there are requirements for adequate response. Failure to meet these requirements, especially in the event of a data breach, can lead to significant enforcement actions.

CPRA penalties

The CPRA, which came into effect in January 2023, builds on the foundation laid by the CCPA and introduces stricter requirements. Businesses can face penalties for:

  • Mishandling sensitive personal information: The CPRA imposes additional safeguards for sensitive data, such as health and financial information. Mishandling or failing to properly protect this data can lead to significant fines.
  • Failure to comply with new consumer rights: The CPRA introduced the right to correct inaccurate personal information, to obtain a copy of one’s data (portability), and to access information about automated decision-making and opt out of its use. Not supporting these rights can result in penalties.
  • Not meeting vendor contract requirements: The CPRA requires businesses to have more stringent data protection contracts with third-party vendors. Failure to comply with these contract requirements is grounds for enforcement.

These updates reflect a shift toward more rigorous data privacy practices, which, along with a dedicated agency for enforcement, require many businesses to adopt a more proactive approach to compliance.

Comparing CCPA fines to GDPR penalties

While both the CCPA and the General Data Protection Regulation (GDPR) aim to protect consumer privacy, their penalties differ significantly.

The GDPR stipulates fines of up to EUR 20 million or 4 percent of annual global turnover, whichever is higher, which is a more severe financial deterrent than the CCPA’s USD 7,500 per violation. Additionally, the GDPR applies to organizations worldwide if they process data from EU residents, making its scope broader than the CCPA, which focuses only on California residents.

However, the CCPA’s enforcement has gained momentum, particularly with the CPRA’s enhanced scope and penalties. While the GDPR is often regarded as the gold standard for privacy regulations, the evolving landscape of US privacy laws demonstrates an increasing focus on consumer rights and data accountability.

The CCPA/CPRA and the GDPR are landmark data privacy regulations that impact organizations worldwide. Here are the differences you need to know and how to comply.

Strategies to avoid CCPA penalties

Updates to the CCPA have made its requirements stricter. Here are practical tips organizations can use to help maintain compliance and avoid fines.

Implement comprehensive data mapping

Compliance begins with understanding the data your business collects, processes, and shares. Create a detailed inventory of personal information, including where it is stored, how it is used, and who has access. Regularly update this inventory to account for changes in business operations or data practices.

Enhance transparency with clear privacy notices

Make privacy policies and notices detailed and easy to understand. Clearly inform consumers about what data you collect, how it is used, what their rights are under the CCPA, and how to exercise them. Transparency builds trust and helps avoid misunderstandings that could lead to violations.

Strengthen data security measures

Implement security protocols to protect personal information from unauthorized access, breaches, and misuse. These protocols may include encryption, access controls, and regular security audits. Also securely delete, anonymize, or return data that is no longer needed. Data can’t be accessed in a breach if a company no longer holds it. Adequate data protection reduces the likelihood of incidents that could result in penalties or lawsuits.

Train employees on compliance requirements

Educate your staff about CCPA regulations and their role in maintaining compliance, especially with relevant policies and examples for your business for clarity. Regular training sessions can help employees recognize risks as well as manage consumer requests quickly and appropriately to avoid accidental violations and uphold best practices.

Conduct regular compliance audits

Perform periodic reviews of your compliance efforts to identify and address potential gaps. These audits should evaluate your data practices, security measures, and consumer rights management for alignment with CCPA and CPRA requirements.

CCPA and CPRA compliance are required for companies doing business with residents of California. We’ve compiled a compliance checklist to help you protect your business.

Managing privacy compliance can be complex, and it’s important to avoid costly CCPA penalties and damage to your company’s operations and reputation. Implementing the right tools to manage consumer consent, track data usage, and maintain transparency is key to avoiding penalties.

A solution like Usercentrics Consent Management Platform (CMP) can help your business meet CCPA requirements. By providing the required notification and opt-out link and streamlining consent collection, companies can more easily navigate compliance challenges.

For companies looking to stay ahead of privacy compliance requirements and reduce the risk of CCPA penalties, using Usercentrics solutions can be an effective step toward meeting legal obligations and protecting customer relationships.

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