Clifford Chance

On July 18, 2023, Oregon governor Tina Kotek signed the Oregon Consumer Data Privacy Act (the Oregon Consumer Data Privacy Act or OCDPA), making Oregon the twelfth state in the U.S. to enact comprehensive data privacy legislation. The OCDPA will take effect on July 1, 2024. The OCDPA joins other U.S. state data privacy laws that are either in effect or will soon come into force (together with the OCDPA, the "State Data Privacy Laws"). This article summarizes key provisions of the OCDPA.

Scope and Applicability

The OCDPA applies to persons that conduct business in Oregon or provide products or services to residents of Oregon and that meet certain thresholds during a calendar year as follows: (i) control or process personal data of at least 100,000 Oregon consumers, other than personal data controlled or processed solely for the purpose of completing a payment transaction; or (ii) control or process personal data of at least 25,000 Oregon consumers and derive over twenty-five percent (25%) of their annual gross revenue from the sale of personal data.

In contrast to most other State Data Privacy Laws, the OCDPA applies to persons that "provide" products or services to residents of Oregon (versus entities that "target" products or services at a state's consumers under other State Data Privacy Laws), which likely makes the law's scope broader. Additionally, the first prong of the OCDPA's applicability threshold also excludes persons that process personal data of Oregon consumers solely for the purpose of completing a payment transaction, likely exempting many brick-and-mortar stores that only collect payment data. Notably, the OCDPA applies to most non-profit companies that satisfy the scope thresholds—a marked shift from most other State Date Privacy Laws. As a potential concession to the fact that non-profits are outside the scope of most other State Data Privacy Laws, the OCDPA delays enforcement for such non-profit entities for an additional year, with applicable obligations and requirements coming into effect on July 1, 2025.

On the other hand, the OCDPA is similar to most other State Data Privacy Laws with respect to certain exemptions and exclusions. For example, the OCDPA only applies to personal data collected from Oregon residents and, like most State Data Privacy Laws other than the California Consumer Privacy Act and California Privacy Rights Act, expressly excludes personal data collected or processed from individuals acting in an employment or commercial context (e.g., business-to-business activities). The OCDPA also includes exemptions in line with most other State Data Privacy Laws, such as for state public corporations or organizations, and any information or data regulated by certain other privacy laws, including the Health Insurance Portability and Accountability Act and the Gramm-Leach-Bliley Act.

Controller and Processor Regime

The OCDPA, like certain other State Data Privacy Laws, contains the regulatory framework of the European Union's General Data Protection Regulation, which distinguishes roles and responsibilities between controllers and processors. The OCDPA defines a "controller" as a person that, alone or jointly with others, determines the purpose and means of processing personal data; and a "processor" as an entity that processes personal data on behalf of a controller.

The OCDPA requires controllers to provide consumers with a reasonably accessible, clear, and meaningful privacy notice, which, among other things, discloses:

• the categories of personal data (including sensitive data) processed by the controller and the purpose of such processing
• the categories of personal data and third parties with whom the controller shares personal data and how such third parties may process such data
• any processing activities for the purpose of targeted advertising 
• how consumers may contact the controller and exercise their privacy rights, including the appeals process. 

Controllers may only process personal data that is "adequate, relevant and reasonably necessary" for certain specified purposes. Controllers are also required to implement safeguards to protect the confidentiality, integrity, and accessibility of personal data and to reduce reasonably foreseeable risks of harm to consumers.

Similar to certain other State Data Privacy Laws, the OCDPA requires that controllers conduct and document data protection assessments for certain processing activities, such as targeted advertising, processing sensitive data, selling personal data, or using personal data for certain profiling purposes. A data protection assessment must identify and weigh the benefits of the processing activity with potential risks to consumers (as mitigated by the safeguards employed by the controller related to such risks). Data protection assessment obligations under the OCDPA apply to activities created or generated after July 1, 2024 (i.e., the statute's effective date) and are not retroactive. Controllers may also use data protection assessments created pursuant to other laws with similar requirements, including other relevant State Date Privacy Laws, for OCDPA compliance purposes.

Like most other State Data Privacy Laws, the OCDPA requires controllers and processors to enter into a written contract, which governs the processor's data processing procedures performed on behalf of the controller. These contractual provisions must clearly set out instructions for the processing of applicable data, describe the type of data subject to and the duration, nature, and purpose of such processing, and specify the rights and obligations of each party. Processors must be subject to a duty of confidentiality with respect to the applicable data and enter into subcontracts with sub-processors to ensure similar protections. Processors are also required to assist controllers with complying with applicable obligations under the OCDPA (e.g., responding to consumer rights requests and completing data protection assessments) and adopt reasonable administrative, technical, and physical safeguards to protect personal data. 

Consumer Rights and Requests

The OCDPA provides a variety of individual consumer rights that align with those found in most other State Data Privacy Laws. These rights provide consumers with a right to access, correct, delete, and obtain a copy of their personal data, and to opt-out of the selling of personal data and/or sharing of personal data for targeted advertising.

The OCDPA permits parents and guardians to exercise rights on behalf of their children (defined as individuals under the age of thirteen (13)). Children's data must be processed in accordance with the Children's Online Privacy Protection Act, 15 U.S.C. § 6501 et seq. (COPPA), which requires consent from parents or guardians.

The OCDPA also grants consumers certain rights with respect to other "sensitive data." The OCDPA's definition of "sensitive data" is similar to definitions seen in most other State Data Privacy Laws, which encompass a consumer's racial or ethnic origin, religious beliefs, mental or physical health diagnosis, sexual orientation, status as transgender or non-binary, citizenship or immigration status, status as a victim of crime, genetic or biometric data, children's data, and precise geolocation data. Similar to certain other State Data Privacy Laws, like the Virginia Consumer Data Protection Act, the OCDPA provides an "opt-in" regime with respect to the processing of sensitive data where controllers may not process a consumer's sensitive data "without first obtaining the consumer's consent" (or in accordance with COPPA if the "sensitive data" is children's data).

Right to Appeal

Under the OCDPA, a controller must respond to a consumer's request to exercise a right within forty-five (45) days of receipt of such request. A controller can extend the response period by an additional forty-five (45) days when reasonably necessary and in consideration of the complexity and number of consumer requests received within the initial forty-five (45) day period by providing notice and an explanation to the consumer. Like most other State Data Privacy Laws, if the controller denies a consumer's request, the controller must explain the justification for the denial and include instructions for appeal that are conspicuously available and similar to the process for submitting consumer rights requests. Within forty-five (45) days of receipt of an appeal request, a controller must inform the consumer of any action taken or not taken in response to the appeal. If the appeal is denied, the controller must provide the consumer with information on how to contact the Oregon Attorney General to submit a complaint.

Selling Personal Data

The OCDPA defines the "sale" of personal data as "the exchange of personal data for monetary or other valuable consideration by the controller to a third party." The OCDPA also provides exceptions to the "sale" of personal data in line with other State Data Privacy Laws, including a controller's disclosure of personal data (i) to a processor; (ii) to an affiliate or third party for purposes of providing a product or service requested by the consumer; (iii) for the purpose of a proposed or completed merger, acquisition, bankruptcy, or similar transaction; (iv) at the direction of a consumer or disclosure of personal data that the consumer intentionally made available to the general public and did not restrict to a specific audience.

As noted above, controllers must provide consumers with the ability to opt-out of the selling of their personal data. Similar to the Connecticut Data Privacy Act and Colorado Privacy Act, controllers must provide an opt-out method that uses a preference signal sent with the consumer's consent to the controller by January 1, 2026. Such an opt-out method may not unfairly disadvantage another controller, must be consumer-friendly and easy to use, and may not use a default setting (i.e., the opt-out mechanism must require that the consumer make an affirmative, voluntary, and unambiguous choice to opt-out).

Targeted Advertising

The OCDPA defines "targeted advertising" as "advertising that is selected for display to a consumer on the basis of personal data obtained from that consumer's activities over time and across one or more nonaffiliated websites or online applications and is used to predict the consumer's preferences or interests." Like most other State Data Privacy Laws, the OCDPA expressly excludes certain activities from the definition of "targeted advertising," such as advertisements based on:

• activities within a controller's own websites or online applications
• the context of a consumer's current search query or visit to a website or online application
• the consumer's request for information or feedback
• processing that measures or reports the performance, reach, or frequency of an advertisement. 

The OCDPA also imposes the same opt-out method requirements on controllers in connection with targeted advertising as it does with respect to with respect to the sale of personal data.

Deidentified and Pseudonymous Data

The OCDPA generally defines "deidentified data" as data that cannot reasonably be linked to an identified or identifiable individual and such data is expressly excluded from the definition of "personal data." Notably, in contrast to most other State Data Privacy Laws the OCDPA does not define or specifically discuss "pseudonymous" data.

Similar to certain other State Data Privacy Laws, the OCDPA requires that controllers in possession of deidentified data take reasonable measures to ensure that such data cannot be associated with an individual and contractually obligate any recipients of deidentified data to comply with all applicable provisions of the OCDPA. Additionally, like some other State Data Privacy Laws, such as the Virginia Consumer Data Protection Act, Utah Consumer Privacy Act, and Connecticut Data Privacy Act, the OCDPA requires controllers to "publicly commit" not to re-identify deidentified data. The OCDPA requires controllers that disclose deidentified data to exercise reasonable oversight to monitor compliance with any contractual commitments with third parties related to such deidentified data (including avoiding attempts to re-identify such data) and to take appropriate actions to address any breaches of such contractual commitments.

Enforcement and Penalties

In contrast to the California Consumer Privacy Act and California Privacy Rights Act, the OCDPA does not provide consumers with a private right of action and is not enforced by a dedicated privacy agency. Rather, the OCDPA is enforced by the Oregon Attorney General. Under the OCDPA, the Oregon Attorney General, prior to initiating an action, must first determine if a violation can be cured. If so, the Oregon Attorney General must send notice to the controller of the violation and provide thirty (30) days to cure the violation. If uncured, the Oregon Attorney General may initiate an action against the violator and recover up to $7,500 in civil penalties per violation. The right to cure provision sunsets on January 1, 2026.