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    Business Owners And Employers Beware: CCPA/CPRA Implications Of Using Generative AI Applications

    As the use of artificial intelligence for routine tasks becomes more widespread, businesses need to be aware of the privacy implications of using these tools.

    The California Consumer Privacy Act, CCPA, is a statute enacted to protect the consumer privacy rights of California residents. It gives consumers more control over how their personal information is collected, shared, and sold by private businesses. The California Consumer Privacy Act, CPRA, has a similar function in enhancing consumer privacy rights protected by the CCPA. Businesses (and employers) which fall within the scope of these Acts must provide compliant disclosure notices and methods for consumers and employees to opt out of the use and sharing of personal information. Businesses that fail to comply with California’s consumer-oriented privacy laws can face hefty civil penalties as well as private legal action.

    To function, generative AI applications, such as chatbots, need to compile massive amounts of data. Generative AI works by using machine learning to improve itself. Therefore, information collected by the chatbot is automatically archived for an indefinite period of time. When users input information, there is no way to know how it is going to be used. As such, businesses that use these tools may inadvertently disclose commercially sensitive data or personal information of clients, consumers, or employees without their authorization and place that information into the public domain. For that reason, businesses should exercise extreme caution to avoid disclosing such information without consent.

    If businesses elect to use generative AI platforms, they should consult with legal counsel to ensure that if they fall under the purview of California’s privacy laws, specifically the CCPA and CPRA, they are properly disclosing such use to their clients, consumers, and employees, obtaining their authorization before doing so, and providing opportunities for opt out, removal, etc. Hunt Ortmann has prepared CCPA/CPRA disclosures and notices and drafted compliance forms for business/employer use.

    Hunt Ortmann’s Employment Law Group is here to answer your questions and help your business navigate the complexities of California’s privacy laws and the use of new technology.

    AUTHORS

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    JoLynn M. Scharrer

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