California Passes Senate Bill 690 to Protect Small Businesses

California, September 1, 2025

News Summary

California’s Senate has unanimously approved Senate Bill 690, aimed at limiting abusive lawsuits against small and medium-sized businesses under the California Invasion of Privacy Act (CIPA). The bill seeks to exempt certain uses of online tracking technologies from liability, providing clarity and support to enterprises facing costly litigation. If enacted, SB 690 will remove retroactive provisions and align with existing privacy laws, ultimately fostering a healthier legal landscape for businesses operating online.

California is taking legislative action to combat a surge in lawsuits under the California Invasion of Privacy Act (CIPA) directed predominantly at small and medium-sized businesses. The California Senate has unanimously passed Senate Bill 690 (SB 690) with a 35-0 vote on June 3, 2025, aimed at curbing abusive litigation practices related to online tracking technologies, such as cookies and analytics tools.

Businesses across the state are currently facing an increasing wave of class-action lawsuits, largely driven by attorneys asserting that various online tracking technologies intercept electronic communications without proper consent. As a wiretap statute, CIPA mandates explicit consent for the interception of electronic communications, and these challenges are primarily targeting small business entities rather than the technology providers themselves. This trend poses a severe financial threat to smaller enterprises, with statutory damages under CIPA potentially amounting to $5,000 for each website visit, leading to settlement demands as high as $200,000.

To mitigate the adverse effects on businesses and bring legal clarity, SB 690 seeks to exempt certain commercial uses of cookies and similar tracking technologies from CIPA liability. The legislation aligns with existing California privacy laws, including the California Consumer Privacy Act (CCPA) and the California Privacy Rights Act (CPRA), aiming to facilitate a more business-friendly legal environment. Importantly, SB 690 will not have retroactive effects and will only apply to future claims if it successfully passes through the Assembly.

In a context that highlights the pressing need for reform, a recent ruling in the U.S. District Court for the Northern District of California outlined the necessity for proof that a party read or attempted to read user communications during transit to establish liability under CIPA. The ruling in Torres v. Prudential Financial, Inc. indicated that merely collecting data does not automatically equate to a violation of CIPA, providing some legal precedent that favors businesses in this regard.

Senator Anna Caballero, who introduced SB 690 on February 24, 2025, aims to protect businesses from what has been characterized as predatory litigation practices, enabling them to redirect their efforts toward compliance with privacy statutes rather than grappling with costly legal defenses. The intention of the bill is not only to restore legal certainty but to harmonize California’s privacy regulations comprehensively.

Understanding the Impact of SB 690 on California Businesses

If passed, SB 690 is predicted to substantially reduce the legal burdens on California businesses concerning online data practices. The bill seeks to address the loopholes that have allowed for rampant litigation targeting smaller players in the market, providing them with a clearer understanding of their rights and responsibilities under privacy laws. The successful implementation of this legislation could potentially reshape the landscape of online business operations within California.

Key Features of SB 690

• Exempts specific commercial uses of cookies and similar technology from CIPA liability.
• Aligns the definition of “commercial business purpose” with existing privacy laws, CCPA and CPRA.
• Aims to eliminate many CIPA claims that are brought forward in the context of online business activities.
• Removes retroactive provisions to apply only prospectively to future cases.
• Intends to harmonize California’s privacy laws to provide better legal protection for businesses.

Conclusion

The passing of SB 690 marks a significant step towards recalibrating California’s approach to online privacy issues and protecting businesses from exploitative litigation under CIPA. It reflects state lawmakers’ commitment to fostering a conducive environment for businesses while ensuring compliance with privacy principles.

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Deeper Dive: News & Info About This Topic

• National Law Review: California SB 690 Passes
• CDF Labor Law: Navigating CIPA
• WilmerHale: Year in Review – Web Tracking Litigation
• Daily Journal: End of CIPA Litigation?
• Google Search: California Invasion of Privacy Act

Author: here-intlog