Workforce Bulletin

On November 8, 2024, the California Privacy Protection Agency (the “Agency” or the “CPPA”) Board met to discuss and commence formal rulemaking on several regulatory subjects, including California Consumer Privacy Act (“CCPA”) updates (“CCPA Updates”) and Automated Decisionmaking Technology (ADMT). Shortly thereafter, on November 22, 2024, the CPPA published several rulemaking documents for public review and comment that recently ended February 19, 2025. If adopted, these proposed regulations will make California the next state to regulate AI at a broad and comprehensive scale, in line with Colorado’s SB 24-205, which contains similar sweeping consumer AI protections. Upon consideration of review and comments received, the CPPA Board will decide whether to adopt or further modify the regulations at a future Board meeting.  This post summarizes the proposed ADMT regulations, that businesses should review closely and be prepared to act to ensure future compliance.

Article 11 of the proposed ADMT regulations outlines actions intended to increase transparency and consumers’ rights related to the application of ADMT. The proposed rules define ADMT as “any technology that processes personal information and uses computation to execute a decision, replace human decisionmaking, or substantially facilitate human decisionmaking.” The regulations further define ADMT as a technology that includes software or programs, uses the output of technology as a key factor in a human’s decisionmaking (including scoring or ranking), and includes profiling. ADMT does not include technologies that do not execute a decision, replace human decisionmaking, or substantially facilitate human decisionmaking (this includes web hosting, domain registration, networking, caching, website-loading, data storage, firewalls, anti-virus, anti-malware, spam and robocall-filtering, spellchecking, calculators, databases, spreadsheets, or similar technologies). The proposed ADMT regulations will require businesses to notify consumers about their use of ADMT, along with their rationale for its implementation. Businesses also would have to provide explanations on ADMT output in addition to a process for consumers to request to opt-out from such ADMT use.

Almost a decade ago, in September 2014, California was the first state in the nation to enact legislation prohibiting non-disparagement clauses that aimed to prevent consumers from writing negative reviews of a business. Popularly referred to as the “Yelp Bill,” AB 2365 was codified at California Civil Code Section 1670.8, which prohibits businesses from threatening or otherwise requiring consumers, in a contract or proposed contract for sale or lease of consumer goods, to waive their right to make any statement—positive or negative—regarding the business or ...