Honda’s $632K CCPA Lesson: What Every Business Must Learn
- East West General Counsel
- Mar 18
- 4 min read
Introduction
The recent enforcement action by the California Privacy Protection Agency (CPPA) against American Honda Motor Co. serves as a critical reminder of the importance of compliance with the California Consumer Privacy Act (CCPA). This case highlights key areas of regulatory scrutiny and underscores the need for businesses to adopt practical legal strategies to ensure compliance with data privacy laws. This article examines the CPPA’s findings, Honda’s settlement terms, and the broader implications for companies processing consumer personal information.
The CPPA’s Findings Against Honda
The CPPA’s enforcement action against Honda arose from its ongoing investigation into connected vehicle manufacturers. The agency alleged that Honda violated the CCPA’s privacy provisions in several ways, leading to a $632,500 fine and required remediation. The primary allegations included:
1. Excessive Consumer Verification Requirements
Honda allegedly required California consumers to provide an unnecessary amount of personal information when exercising their privacy rights. Notably, Honda requested excessive details for opt-out requests, even though the law does not require verification for such requests. The CPPA found that Honda’s verification process placed an undue burden on consumers, in violation of CCPA regulations.
2. Lack of Symmetry in Opt-Out and Opt-In Processes
Under Section 7004(a)(2) of the CCPA Regulations, businesses must offer consumers equal and symmetrical choices when opting in or out of data processing activities. The CPPA determined that Honda made it more difficult for consumers to opt out of the sale or sharing of their personal information than to opt back in. Specifically, opting out required multiple steps, whereas opting in could be completed in a single step.
3. Barriers to Authorized Agent Requests
The CPPA alleged that Honda created unnecessary obstacles for consumers who wished to use authorized agents to submit privacy rights requests on their behalf. While verification requirements may apply to certain consumer rights, the CPPA maintained that Honda improperly required additional direct confirmation from consumers when processing opt-out requests.
4. Failure to Execute Required Contracts with Ad Tech Providers
Honda allegedly failed to execute CCPA-compliant contracts with third-party advertising technology partners who received consumer personal information. The CCPA mandates that businesses enter into specific agreements with service providers and third parties that process or receive personal data. Honda’s failure to do so constituted a regulatory violation.
Settlement Terms and Corrective Actions
In response to the CPPA’s findings, Honda agreed to take several remedial steps within a set timeframe. The key terms of the settlement include:
Payment of a $632,500 fine to resolve the allegations.
Implementation of a streamlined process for consumers to submit privacy rights requests.
Consultation with a user experience (UX) designer to evaluate and improve the privacy request process.
Training of employees on CCPA compliance to prevent future violations.
Modification of Honda’s contracting procedures to ensure compliance with the CCPA when engaging with third-party data recipients.
Enhancements to Honda’s cookie preference management, including the addition of a “Reject All” button to create symmetry in choice with the existing “Allow All” button.
Public disclosure of aggregated statistics regarding consumer privacy requests for a minimum of five years.
Broader Implications for Businesses
The CPPA’s enforcement priorities in this case provide a roadmap for other businesses subject to the CCPA. Companies should take proactive steps to align their privacy practices with regulatory expectations to avoid potential enforcement actions. Key takeaways include:
Minimize Data Collection for Verification: Request only the information necessary to locate an individual in company records, particularly for opt-out and data-limiting requests. Do not impose excessive identity verification requirements where they are not legally mandated.
Ensure Symmetry in Privacy Choices: Businesses should review their opt-in and opt-out mechanisms to ensure they require the same level of effort for consumers. Cookie banners and preference centers must provide equal access to privacy-protective options.
Simplify Authorized Agent Requests: Companies should not require additional direct confirmation from consumers for authorized agent submissions related to opt-out or data-limiting requests.
Review Contracts with Third-Party Data Recipients: Businesses must maintain CCPA-compliant contracts with all external entities receiving consumer personal data. This includes advertising technology partners, data processors, and third-party service providers.
Apply Global Privacy Control (GPC) to Known Consumers: Companies should ensure that GPC signals are honored for all consumers who have previously interacted with their platforms.
Conclusion
The CPPA’s enforcement action against Honda demonstrates the agency’s commitment to strict enforcement of consumer privacy rights. This case serves as a cautionary tale for businesses that process consumer data, highlighting the need for strong compliance frameworks, practical legal strategies, and thorough contract management. Companies should conduct internal audits of their CCPA compliance efforts to identify and rectify potential vulnerabilities before they attract regulatory scrutiny.
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