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AB-846 Customer loyalty programs.(2019-2020)



Current Version: 05/20/19 - Amended Assembly        


AB846:v95#DOCUMENT

Amended  IN  Assembly  May 20, 2019
Amended  IN  Assembly  April 30, 2019
Amended  IN  Assembly  April 12, 2019
Amended  IN  Assembly  March 25, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill No. 846


Introduced by Assembly Members Burke, Low, and Mullin
(Coauthors: Assembly Members Aguiar-Curry, Bigelow, Bonta, Fong, and Blanca Rubio)
(Coauthors: Senators Morrell and Portantino)

February 20, 2019


An act to amend Section 1798.125 of the Civil Code, relating to consumer privacy. An act to add Section 1798.126 to the Civil Code, relating to consumer privacy.


LEGISLATIVE COUNSEL'S DIGEST


AB 846, as amended, Burke. Customer loyalty programs.
Existing law, the California Consumer Privacy Act of 2018, beginning on January 1, 2020, grants a consumer various rights with regard to personal information relating to that consumer that is held by a business. Among these rights, the act allows a consumer to opt out of having the consumer’s personal information sold to third parties by a business, and the act requires a business that sells a consumer’s personal information to third parties to give that consumer notice, as specified. The act prohibits a business from discriminating against the consumer for exercising any of the consumer’s rights under the act, except that a business may offer a different price, rate, level, or quality of goods or services to a consumer if the differential treatment is reasonably related to value provided to the consumer by the consumer’s data.
The act authorizes a business to enter a consumer into a financial incentive program only if the consumer affirmatively consents, subject to revocation at any time by the consumer, to the material terms of the incentive program, and the act requires a business that offers a financial incentive to a consumer to notify the consumer of the financial incentive, as specified.
The act further prohibits a business from using a financial incentive practice that is unjust, unreasonable, coercive, or usurious in nature.
This bill would, instead, prohibit a business from discriminating against the consumer, by charging higher prices or providing a lower level of goods or services, for exercising any of the consumer’s rights under the act, except if the differential treatment would prohibit the act from being construed to prohibit a business from offering a different price, rate, level, or quality of goods or services to a consumer if the offering is in connection with a consumer’s voluntary participation in a loyalty, rewards, premium features, discount, or club card program, as defined, or is in connection with the offering is for a specific good or service whose functionality is directly related to the collection, use, or sale of the consumer’s data. The bill would prohibit a business from offering loyalty, rewards, premium features, discounts, or club card programs that are unjust, unreasonable, coercive, or usurious in nature.

The bill would also strike an inconsistent cross-reference as well as the consent and notification provisions related to a financial incentive program, as described above.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares that California consumers enjoy the benefits and convenience of customer loyalty programs. Studies show all of the following:
(a) Eighty percent of adults belong to some type of customer loyalty program.
(b) Customer loyalty program membership increased by 15 percent between 2015 and 2017.
(c) Eighty-seven percent of customer loyalty program members say they are open to sharing personal information about their activity and behavior in order to receive more personalized rewards.

SEC. 2.

 Section 1798.126 is added to the Civil Code, to read:

1798.126.
 (a) This title shall not be construed to prohibit a business from offering a different price, rate, level, or quality of goods or services to a consumer, including offering its goods or services for no fee, if either of the following is true:
(1) The offering is in connection with a consumer’s voluntary participation in a loyalty, rewards, premium features, discounts, or club card program.
(2) The offering is for a specific good or service whose functionality is directly related to the collection, use, or sale of the consumer’s data.
(b) A business shall not offer loyalty, rewards, premium features, discounts, or club card programs that are unjust, unreasonable, coercive, or usurious in nature.
(c) As used in this section, “loyalty, rewards, premium features, discounts, or club card program” includes an offering to one or more consumers of lower prices or rates for goods or services or a higher level or quality of goods or services, including through the use of discounts or other benefits, or a program through which consumers earn points, rewards, credits, incentives, gift cards or certificates, coupons, or access to sales or discounts on a priority or exclusive basis.

SECTION 1.Section 1798.125 of the Civil Code is amended to read:
1798.125.

(a)(1)A business shall not discriminate against a consumer because the consumer exercised any of the consumer’s rights under this title, including, but not limited to, by:

(A)Denying goods or services to the consumer.

(B)Charging higher prices or rates for goods or services, including through the use of discounts or other benefits or imposing penalties.

(C)Providing a lower level or quality of goods or services to the consumer.

(D)Suggesting that the consumer will receive a different price or rate for goods or services or a different level or quality of goods or services.

(2)Except as provided in paragraph (3), nothing in this subdivision prohibits a business from offering a different price, rate, level, or quality of goods or services to a consumer, including offering its goods or services for no fee, if any of the following are true:

(A)The offering is in connection with a consumer’s voluntary participation in a loyalty, rewards, premium features, discount, or club card program.

(B)The offering is for a specific good or service whose functionality is directly related to the collection, use, or sale of the consumer’s data.

(3)A business shall not offer a different price, rate, level, or quality of goods or services that is unjust, unreasonable, coercive, or usurious.

(b)As used in this section, “loyalty, rewards, premium features, discount, or club card program” includes an offering to one or more consumers of lower prices or rates for goods or services or a higher level or quality of goods or services, including through the use of discounts or other benefits, or a program through which consumers earn points, rewards, credits, incentives, gift cards, or certificates, coupons, or access to sales or discounts on a priority or exclusive basis.