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§ 7050. Service Providers and Contractors.

ARTICLE 4. SERVICE PROVIDERS, CONTRACTORS, AND THIRD PARTIES

(a) A service provider or contractor shall not retain, use, or disclose personal information collected pursuant to its written contract with the business except:

(1) For the specific business purpose(s) set forth in the written contract between the business and the service provider or contractor that is required by the CCPA and these regulations.

(2) To retain and employ another service provider or contractor as a subcontractor, where the subcontractor meets the requirements for a service provider or contractor under the CCPA and these regulations.

(3) For internal use by the service provider or contractor to build or improve the quality of the services it is providing to the business, even if this business purpose is not specified in the written contract required by the CCPA and these regulations, provided that the service provider or contractor does not use the personal information to perform services on behalf of another person. Illustrative examples follow.

(A) An email marketing service provider can send emails on a business’s behalf using the business’s customer email list. The service provider could analyze those customers’ interactions with the marketing emails to improve its services and offer those improved services to everyone. But the service provider cannot use the original email list to send marketing emails on behalf of another business.

(B) A shipping service provider that delivers businesses’ products to their customers may use the addresses received from their business clients and their experience delivering to those addresses to identify faulty or incomplete addresses, and thus, improve their delivery services. However, the shipping service provider cannot compile the addresses received from one business to send advertisements on behalf of another business, or compile addresses received from businesses to sell to data brokers.

(4) To prevent, detect, or investigate data security incidents or protect against malicious, deceptive, fraudulent or illegal activity, even if this business purpose is not specified in the written contract required by the CCPA and these regulations.

(5) For the purposes enumerated in Civil Code section 1798.145, subdivisions (a)(1) through (a)(7).

(b) A service provider or contractor cannot contract with a business to provide cross-context behavioral advertising. Pursuant to Civil Code section 1798.140, subdivision (e)(6), a service provider or contractor may contract with a business to provide advertising and marketing services, but the service provider or contractor shall not combine the personal information of consumers who have opted-out of the sale/sharing that the service provider or contractor receives from, or on behalf of, the business with personal information that the service provider or contractor receives from, or on behalf of, another person or collects from its own interaction with consumers. A person who contracts with a business to provide cross-context behavioral advertising is a third party and not a service provider or contractor with respect to cross-context behavioral advertising services. Illustrative examples follow.

(1) Business S, a clothing company, hires a social media company as a service provider for the purpose of providing Business S’s advertisements on the social media company’s platform. The social media company can serve Business S by providing non-personalized advertising services on its platform based on aggregated or demographic information (e.g., advertisements to women, 18-30 years old, that live in Los Angeles). However, it cannot use a list of customer email addresses provided by Business S to identify users on the social media company’s platform to serve advertisements to them.

(2) Business T, a company that sells cookware, hires an advertising company as a service provider for the purpose of advertising its services. The advertising agency can serve Business T by providing contextual advertising services, such as placing advertisements for Business T’s products on websites that post recipes and other cooking tips.

(c) If a service provider or contractor receives a request made pursuant to the CCPA directly from the consumer, the service provider or contractor shall either act on behalf of the business in accordance with the business’s instructions for responding to the request or inform the consumer that the request cannot be acted upon because the request has been sent to a service provider or contractor.

(d) A service provider or contractor that is a business shall comply with the CCPA and these regulations with regard to any personal information that it collects, maintains, or sells outside of its role as a service provider or contractor.

(e) A person who does not have a contract that complies with section 7051, subsection (a), is not a service provider or a contractor under the CCPA. For example, a business’s disclosure of personal information to a person who does not have a contract that complies with section 7051, subsection (a), may be considered a sale or sharing of personal information for which the business must provide the consumer with the right to opt-out of sale/sharing.

(f) A service provider or a contractor shall comply with the terms of the contract required by the CCPA and these regulations.

(g) Whether an entity that provides services to a nonbusiness must comply with a consumer’s CCPA request depends upon whether the entity is a “business,” as defined by Civil Code section 1798.140, subdivision (d).

Note: Authority cited: Section 1798.185, Civil Code. Reference: Sections 1798.100, 1798.105, 1798.106, 1798.110, 1798.115, 1798.120, 1798.121, 1798.130, 1798.135, 1798.140 and 1798.185, Civil Code.