Understanding the Minnesota Consumer Data Privacy Act (MCDPA): What Small and Medium Businesses Need to Know

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On May 24, 2024, Governor Walz signed the Minnesota Consumer Data Privacy Act (MCDPA) into law, introducing new privacy requirements for businesses operating in or targeting consumers in Minnesota. If your small or medium-sized business controls or processes personal data of 100,000 or more Minnesota consumers annually or derives over 25 percent of its revenue from the sale of personal data while handling data for at least 25,000 consumers, you will need to comply with this legislation by July 1, 2025

Key requirements include allowing consumers to access, correct, and delete their personal data and providing options to opt out of data sales, targeted advertising, and profiling. Additionally, technology providers contracting with public education agencies are specifically covered under the MCDPA, broadening its applicability.

To ensure compliance, your business must implement several measures. These measures include creating clear privacy notices, establishing processes for handling consumer data requests within 45 days, and conducting data privacy assessments for activities like targeted advertising and sensitive data processing. You’ll also need to document and maintain privacy policies, ensure contracts with data processors meet MCDPA standards, and provide mechanisms for consumers to revoke consent for data processing. The Minnesota Attorney General enforces the MCDPA, with potential penalties of up to $7,500 per violation, emphasizing the importance of early and thorough compliance efforts.

What Your Business Needs to Do from a Digital Marketing Perspective

1. Update Privacy Policies and Notices:

Your website and digital platforms must display a comprehensive privacy notice that includes all MCDPA-required disclosures. This notice should inform consumers about the categories of personal data you process, the purposes for processing, and how they can exercise their rights. For instance, an e-commerce site should state that it collects customer names, addresses, and purchase histories for order fulfillment and marketing purposes. Regularly review and update this notice to reflect any changes in your data practices.

2. Implement Opt-Out Mechanisms:

Provide easy-to-use mechanisms for consumers to opt out of the sale of their personal data, targeted advertising, and profiling. For example, an online clothing retailer could include a “Your Privacy Choices” link in the website footer, leading to a page where users can manage their privacy settings, such as opting out of email marketing or targeted ads based on their browsing behavior.

3. Enhance Data Handling Processes:

Develop robust processes for responding to consumer data requests within the mandated 45-day period. This includes confirming data processing activities, correcting inaccuracies, and deleting personal data upon request. For example, a healthcare provider must be able to promptly respond to a patient’s request to access their medical records or correct any errors in their personal information. Ensure your team is trained to handle these requests efficiently and securely.

4. Conduct Data Privacy Assessments:

Perform regular data privacy assessments, especially for high-risk processing activities like targeted advertising and handling sensitive data. If your business uses data analytics to personalize advertising campaigns, conduct assessments to weigh the benefits against the potential risks to consumer privacy. These assessments should analyze the benefits and potential risks of data processing, helping you make informed decisions that protect consumer privacy.

5. Secure Data Collection and Storage:

Implement strong administrative, technical, and physical security measures to protect the personal data you collect and process. For example, a financial services firm should use encryption to protect customer data stored in its databases and ensure that only authorized personnel can access sensitive information. Maintain an inventory of the personal data you handle, and ensure data minimization by collecting only what is necessary for your business purposes.

6. Review and Update Contracts:

Ensure all contracts with data processors comply with MCDPA requirements. These contracts should clearly outline the nature and purpose of data processing, the types of personal data involved, and the obligations of both parties. For example, if your business outsources email marketing to a third-party service provider, the contract should specify how customer email addresses will be used and protected. Review and update existing contracts as necessary.

7. Train Your Team:

Provide comprehensive training for your staff on the MCDPA and your company’s privacy policies. Ensure everyone understands their roles and responsibilities in protecting consumer data and complying with privacy regulations. For example, train your customer service team to recognize and properly handle consumer requests for data access or deletion.

8. Prepare for Audits and Assessments:

Be prepared for potential audits and assessments by the Minnesota Attorney General’s office. Keep detailed records of your data processing activities, consumer requests, and privacy assessments for at least 24 months. For instance, an online subscription service should document all consumer data access requests and how they were addressed. Regularly review your compliance measures to ensure they are up-to-date and effective.

Technical Implementation Strategies

1. Integrate Privacy Notices into Your Digital Platforms:

Leverage your content management system (CMS) to easily update and display privacy notices across your website and digital properties. Ensure these notices are accessible and clearly communicated to users at key interaction points, such as account creation and checkout processes.

Integrating the right tools is crucial to ensure your website complies with the Minnesota Consumer Data Privacy Act (MCDPA). Here are five recommended WordPress plugins that will help you manage data privacy and meet the requirements of the MCDPA:

WP GDPR Compliance

This versatile plugin automates GDPR-related tasks, which align closely with MCDPA standards. It adds necessary consent checkboxes to your WordPress site, such as comments and registration forms. Additionally, it supports the ‘Right to be Forgotten,’ allowing users to anonymize their data. This helps ensure that personal data handling is in line with privacy regulations.

Complianz | GDPR/CCPA Cookie Consent

Complianz simplifies the management of cookie consent and privacy policies. It is designed to ensure compliance with multiple privacy regulations, including GDPR and CCPA, making it suitable for MCDPA requirements as well. The plugin features automated cookie scans and can tailor its settings based on your users’ geographic location, ensuring specific compliance requirements are met.

GDPR Framework

Created to make GDPR compliance straightforward, this plugin also supports the foundational privacy tasks required by the MCDPA. It enables users to easily access and delete their data and helps you establish and maintain a compliant privacy policy. The GDPR Framework is especially useful for simplifying complex legal compliance into actionable steps for WordPress site managers.

iubenda – Cookie and Consent Solution for the GDPR & ePrivacy

Iubenda provides comprehensive solutions for managing cookie policies and obtaining necessary user consent. Its features include customizable cookie banners and the ability to block scripts until consent is granted. This plugin is ideal for aligning with both GDPR and MCDPA mandates, particularly in handling user consent in a legally compliant manner.

CookieYes | GDPR Cookie Consent & Compliance Notice

CookieYes specializes in cookie management and GDPR compliance, which are essential under the MCDPA as well. It offers robust features such as auto-blocking of non-consented cookies and customization of consent notices, ensuring that your website adheres to legal standards for user privacy and data protection.

2. Develop Automated Opt-Out Tools:

Utilize automated tools and plugins to manage opt-out requests efficiently. For example, incorporate a preference management system that allows users to easily opt out of data sharing and targeted advertising. This system should be integrated with your CRM and marketing automation platforms to ensure real-time updates and compliance.

3. Implement Data Request Handling Systems:

Use help desk software or customer relationship management (CRM) systems to track and manage consumer data requests. Create workflows to route these requests to the appropriate teams, ensuring timely and accurate responses. For example, a ticketing system can help track the status of each request and ensure it is addressed within the 45-day window.

4. Conduct Privacy Impact Assessments (PIAs):

Utilize privacy management software to conduct and document data privacy assessments. These tools can help you identify and mitigate risks associated with data processing activities, ensuring compliance with the MCDPA. They can also automate the assessment process, making it easier to maintain thorough and up-to-date records.

5. Strengthen Data Security Measures:

Implement robust cybersecurity measures such as encryption, firewalls, and intrusion detection systems to protect personal data. Use data loss prevention (DLP) tools to monitor and control the flow of sensitive information within your organization. Regularly conduct security audits and vulnerability assessments to identify and address potential threats.

6. Update Contracts with Digital Tools:

Utilize contract management software to review, update, and store contracts with data processors. Ensure these contracts comply with MCDPA requirements and can be easily accessed and audited. For instance, you can set automated reminders for contract renewals and reviews to ensure ongoing compliance.

7. Provide Ongoing Training through Digital Platforms:

Use e-learning platforms to deliver regular training sessions on data privacy and MCDPA compliance. Develop interactive modules and assessments to ensure your team understands their responsibilities. Track training completion and effectiveness through learning management systems (LMS) to ensure all employees are up-to-date.

8. Maintain Compliance Records:

Use document management systems to store and organize compliance records, including data processing activities, consumer requests, and privacy assessments. Ensure these records are easily accessible for audits and regularly updated to reflect any changes in your data practices.

Achieve MCDPA Compliance

Navigating the new MCDPA requirements may seem daunting, but taking proactive steps now will help your business avoid penalties and build trust with your consumers. At Romain Berg, we specialize in helping businesses like yours implement the technical aspects of effective compliance strategies. By updating your privacy policies, implementing robust data handling processes, and training your team, you can ensure compliance and protect the privacy rights of Minnesota residents. Your lawyer can help you better understand the application of MCDPA to your business. Contact us today to learn how we can support your business with the technical implementations needed to navigate the complexities of the Minnesota Consumer Data Privacy Act.

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