California, September 1, 2025
News Summary
On June 3, 2025, the California Senate unanimously passed Senate Bill 690 (SB 690), aimed at alleviating the financial burdens on small and medium-sized businesses facing class-action lawsuits under the California Invasion of Privacy Act (CIPA). The bill aims to limit liability for the use of online tracking technologies such as cookies while providing clearer legal guidelines for businesses. If approved in the Assembly, SB 690 would foster a more business-friendly environment, ensuring companies can focus on compliance rather than costly litigation.
California lawmakers have taken a significant step toward addressing the increase of lawsuits filed against online businesses under the California Invasion of Privacy Act (CIPA). On June 3, 2025, the California Senate unanimously passed Senate Bill 690 (SB 690) with a 35-0 vote. This legislation aims to mitigate the financial burdens faced by small and medium-sized businesses that have been targeted by class-action lawsuits related to online tracking technologies.
The rise in lawsuits stems from the interpretation of CIPA, a wiretap statute designed to prevent the interception of electronic communications without consent. Lawyers assert that the use of online tracking technologies, such as cookies, Meta Pixel, Google Analytics, and LinkedIn Insight, constitutes a violation of this law. They argue that these tools intercept communications between websites and their visitors, including every click and keystroke.
Unfortunately, the legal landscape surrounding CIPA has favored these lawsuits, creating a troubling situation for many businesses. Instead of pursuing technology providers responsible for creating tracking technologies, attorneys are focusing on small and medium-sized enterprises. This strategy circumvents expensive litigation and minimizes the potential risk of setting legal precedents that could affect the broader applicability of CIPA.
Class-action claims can be severe, allowing for statutory damages of roughly $5,000 per website visit. As a result, settlement demands often land between $50,000 and $200,000. For many smaller businesses, opting to settle is frequently more financially feasible than entering into prolonged litigation. This has cultivated an environment where settling out of court has become the norm, often driven by the overwhelming costs associated with defending against these lawsuits.
Recent judicial decisions, such as a summary judgment delivered by the U.S. District Court for the Northern District of California, have, however, begun to redefine the scope of CIPA liability. The ruling in the case of Torres v. Prudential Financial, Inc. clarified that merely collecting data does not violate CIPA if the tracking provider does not actively read or attempt to read communications while in transit.
Recognizing the distress these lawsuits have caused businesses, Senator Anna Caballero introduced SB 690 on February 24, 2025. The bill seeks to limit the misuse of CIPA lawsuits, particularly regarding the use of cookies and similar tracking technologies.
Moving forward, SB 690 aims to exempt specific commercial uses of cookies from CIPA liability. This would prevent private lawsuits relating to the processing of personal information for revenue generation purposes. By aligning the definition of “commercial business purpose” with the provisions of the California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA), SB 690 aims to foster a more business-friendly legal environment.
If approved in the Assembly, SB 690 would enhance legal certainty for businesses entangled in CIPA litigation, allowing them to concentrate on compliance with existing privacy laws instead of battling costly lawsuits. It is essential to note that the bill has removed its retroactive provision, meaning it will not impact pending cases; it will only apply prospectively once passed.
In summary, the legislature’s intent with SB 690 is to harmonize California’s complex privacy laws while alleviating the burdens imposed by predatory litigation tactics that have emerged recently. As California continues to shape privacy legislation, the outcomes of these changes may set the tone for future regulations related to digital privacy and data protection in other jurisdictions.
FAQ
What is SB 690?
SB 690 is a California Senate bill aimed at reducing abusive lawsuits against online businesses related to the California Invasion of Privacy Act (CIPA). It seeks to limit liability related to online tracking technologies.
Why are businesses being targeted under CIPA?
Businesses have been targeted because lawyers argue that tracking technologies like cookies violate CIPA by intercepting communications between websites and their users without consent.
What are the potential financial implications for businesses?
The financial implications are significant, as class-action claims can result in statutory damages of $5,000 per website visit, leading to settlement demands ranging from $50,000 to $200,000, which can be financially crippling for small businesses.
What does the passage of SB 690 mean for businesses?
If passed, SB 690 would provide exemptions for commercial uses of cookies and tracking technologies and would help restore legal certainty for online businesses by reducing the potential for CIPA lawsuits.
| Feature | Details |
|---|---|
| Legislation Name | Senate Bill 690 (SB 690) |
| Passed By | California Senate |
| Vote Count | 35-0 |
| Focus | Abolishing abusive CIPA lawsuits |
| Key Exemptions | Clarifies commercial use of cookies and tracking technologies |
| Impact on Businesses | Reduces CIPA litigation and costs |
| Effective Date | Prospective application upon passing in Assembly |
Deeper Dive: News & Info About This Topic
- National Law Review: California SB 690 Passes Senate
- JD Supra: Federal Judge Denies CIPA Lawsuit
- Daily Journal: The Beginning of the End for CIPA Litigation
- Adweek: Lawsuits Against Trade Desk and Consumer Privacy Laws
- Wikipedia: California Invasion of Privacy Act
Author: Anaheim Staff Writer
Anaheim Staff Writer The Anaheim Staff Writer represents the experienced team at HEREAnaheim.com, your go-to source for actionable local news and information in Anaheim, Orange County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as major conventions at the Anaheim Convention Center, including NAMM and VidCon, exciting games at Angel Stadium and Honda Center, and developments at Disneyland Resort Our coverage extends to key organizations like the Anaheim Chamber of Commerce and Visit Anaheim, plus leading businesses in hospitality, entertainment, and innovation that power the local economy As part of the broader HERE network, including HERECostaMesa.com, HEREHuntingtonBeach.com, HERESantaAna.com, and HERELosAngeles.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
