California, September 1, 2025
News Summary
The California Senate has unanimously passed Senate Bill 690, aimed at reducing the frequency of lawsuits stemming from the California Invasion of Privacy Act (CIPA). With businesses facing increased legal challenges due to online tracking technologies, SB 690 seeks to exempt certain commercial uses from CIPA liabilities. This legislation, introduced by Senator Anna Caballero, is designed to alleviate the burden of costly lawsuits on small to medium-sized enterprises. The bill awaits further consideration in the Assembly.
California businesses are grappling with an increase in lawsuits stemming from the California Invasion of Privacy Act (CIPA), particularly due to the heightened usage of online tracking technologies such as cookies, Google Analytics, Meta Pixel, and LinkedIn Insight. In response, the California Senate has unanimously passed Senate Bill 690 (SB 690), designed to limit the abuse of CIPA lawsuits against online businesses.
The legislation, introduced by California State Senator Anna Caballero on February 24, 2025, gained approval from the Senate on June 3, 2025, with a unanimous vote of 35-0. The bill is currently awaiting further debate in the Assembly. If enacted, SB 690 would exempt specific commercial uses of cookies and tracking technologies from CIPA liability, effectively reducing the risk of lawsuits targeting small to medium-sized businesses.
Currently, lawyers argue that online tracking technologies violate CIPA by unlawfully intercepting electronic communications between websites and their visitors. This includes capturing clicks and keystrokes, leading to class-action claims against businesses. The potential for substantial statutory damages—$5,000 per website visit—encourages settlements, with demands ranging from $50,000 to $200,000. Many small to mid-sized businesses find that settling these claims is often more financially viable than engaging in litigation.
A recent court ruling in Torres v. Prudential Financial, Inc. has shifted some CIPA liability expectations. The U.S. District Court for the Northern District of California determined that proof is required to show that a party actually read or attempted to read a user’s communication while it was in transit. Simply collecting data through tracking technologies does not constitute a violation of CIPA.
SB 690 aims to enhance legal clarity for businesses contending with CIPA lawsuits by assisting them in focusing on compliance with privacy statutes instead of continuously defending against expensive litigation. The bill aligns its definition of “commercial business purpose” with existing frameworks such as the California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA).
Notably, SB 690 does not include a retroactive provision, meaning it will not affect any ongoing cases and will apply solely to future claims once it passes in the Assembly. The overarching goal of the bill is to create a more balanced approach to privacy enforcement, reducing the burden of predatory litigation practices on businesses.
As CIPA lawsuits continue to disrupt California’s business landscape, the passage of SB 690 represents a significant legislative effort to protect businesses and foster a more sustainable online environment.
Background on CIPA and Current Lawsuits
The California Invasion of Privacy Act is primarily a wiretap statute, established to prevent the unauthorized interception of electronic communications. CIPA mandates consent for any interception of electronic communications. Increasingly, however, attorneys are leveraging this law in relation to online tracking, which they claim constitutes an unlawful invasion of privacy. These lawsuits have primarily targeted smaller enterprises rather than technology providers, avoiding high legal costs and setting potential detrimental precedents regarding the applicability of CIPA.
Legal Implications of SB 690
The passing of SB 690 stands to fundamentally alter the litigation landscape for California businesses. By addressing the prevalent issue of privacy infringement through online tracking mechanisms, the bill aims to provide relief from costly legal battles that disproportionately affect smaller businesses. This legislative measure is a direct response to the rising frequency of class-action lawsuits that rely on CIPA, aiming to safeguard enterprises while still respecting consumer privacy standards.
FAQ Section
1. What is SB 690?
SB 690 is a bill passed by the California Senate that aims to limit the abuse of lawsuits arising under the California Invasion of Privacy Act (CIPA) by exempting certain uses of online tracking technologies from liability.
2. How does SB 690 affect businesses?
The bill is intended to provide legal protection to businesses using cookies and tracking technologies for commercial purposes, reducing their exposure to costly CIPA lawsuits.
3. What are the potential penalties under CIPA?
Under CIPA, businesses can face up to $5,000 in statutory damages for each website visit if found in violation, leading to settlement demands that can range from $50,000 to $200,000.
4. Will SB 690 apply retroactively?
No, SB 690 does not include a retroactive provision. It will apply to new cases moving forward but not affect any ongoing lawsuits.
5. What is the significance of the court ruling in Torres v. Prudential Financial, Inc.?
The ruling clarified that merely collecting data through tracking does not constitute a CIPA violation unless it can be proven that the communications were read while in transit.
Key Features Overview
| Feature | Details |
|---|---|
| Legislation Title | Senate Bill 690 (SB 690) |
| American Business Impact | Exempts certain uses of tracking technologies from CIPA liability |
| Current Status | Passed Senate, awaiting Assembly consideration |
| Potential Damages under CIPA | $5,000 per website visit |
| Legal Precedent | Requires proof of reading communications for CIPA violation |
| Retroactive Provision | Not applicable; future claims only |
Deeper Dive: News & Info About This Topic
- CD & F: Navigating CIPA and Recent Court Decisions
- JD Supra: Federal Judge Denies CIPA Lawsuit
- National Law Review: California SB 690 Passes
- Google Search: California Invasion of Privacy Act
- Encyclopedia Britannica: Privacy Law
Author: STAFF HERE HOLLYWOOD
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