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How your data are shared and sold could be California's marquee ballot battle in 2018

How your data are shared and sold could be California's marquee ballot battle in 2018
In September, a data breach at Equifax exposed the personal information of thousands of customers. A proposed California ballot measure would make major incidents subject to legal action and possible financial penalties. (Smith Collection/Gado / Getty Images)

There are pretty strong odds that California voters soon will be hearing a lot about how consumer data are bought and sold — products purchased, medical information, even religious affiliations — and are asked to do something about it.

The man behind the effort to start that conversation is a San Francisco real estate developer who started thinking a lot about the issue after a cocktail party conversation with a tech engineer.

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"He said, 'If people just knew how much we knew about them, they'd be really worried,'" Alastair Mactaggart recalled of that chat with the engineer.

Some two years later, Mactaggart is poised to spend enough of his own money to ask Californians to consider a sweeping 2018 ballot measure that could shift the balance of power over data sharing to consumers and punish businesses that don't toe the line.

The initiative that he's introduced, now being circulated for voter signatures, would make two major changes to California law and perhaps set a powerful precedent in the national debate over consumer privacy.

First, the proposal would require significant new disclosure from companies that collect, buy or share the personal information of Californians. It would generally allow consumers to "opt out" once they know who's using their information while banning these large businesses from charging a higher price to those who make that choice.

Second, the ballot measure would give new power to prosecutors and average Californians to file civil lawsuits after a data breach or for selling personal information once a customer says "no" to sharing. "Consumers would not have to prove that they suffered harm as a result of the violation to be awarded damages," a state fiscal analysis found.

It doesn't take a political insider to realize the business world sees things differently and is preparing to fight back should the initiative qualify for the ballot.

"Very few people are experts on what the consequences would be," said Allan Zaremberg, president of the California Chamber of Commerce. He wonders what would happen to state agencies or schools that share data, or whether a nonprofit credit union might be exempt from the new rules but a commercial bank would not be.

"The economy in California depends on data sharing," Zaremberg said.

Mactaggart, with no real political track record outside of donations to candidates, says he doesn't think the state will be hurt by the change. And he's got a pretty good inkling of what's coming if the privacy proposition makes the ballot. "This is the wealthiest industry in the world that we're trying to regulate," he said.

A more limited consumer privacy proposal stalled during the final hours of the Legislature's session this year. And it's possible, under relatively new state initiative rules designed to allow for more compromise between lawmakers and activists, that a costly ballot box fight could be avoided.

At the outset, this has all the markings of a huge campaign in an election year where the list of statewide propositions almost certainly will be smaller than the long list of measures in 2016. Like so many epic ballot battles, one side will insist that change is long overdue and the other will counter that the change could lead to unintended consequences. And failing a compromise, the only ones who can sort all of that out, of course, will be the voters.

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