This article was co-authored by Lucas Walshesenior consultant in digital analysis at fifty-five years old.
Legal teams are increasingly asking marketing teams to weigh in on the California Invasion of Privacy Act (CIPA), a little-known California privacy law dating to 1967 that has resurfaced in disputes over digital tracking. Many businesses struggle to understand the challenges or adapt.
While your legal team determines compliance, you play a key role in explaining how your data collection works, the tools you use, and the business impact of potential changes. These conversations help ensure that privacy-focused solutions meet legal obligations while limiting marketing impacts.
What is CIPA?
CIPA is a Cold War-era law enacted in 1967. The law was intended to punish “eavesdropping on private communications” (California Penal Code §630). At the time, this primarily meant combating wiretapping and other similar privacy-invasive techniques.
The law uses obscure and somewhat outdated terms like “pen register” (“a device or process that records or decodes numbering, routing, addressing, or signaling information transmitted by an instrument or facility from which a wire or electronic communication is transmitted, but not the contents of a communication (…)”) and “track and trace device” (“a device or process that captures incoming electronic or other impulses that identify the original number or other numbering, routing, addressing or signaling information (…)”). The wording reflects the time in which the law was enacted, and many lawyers say it makes law enforcement more difficult today.
Violators face civil penalties of up to $5,000 per violation per day (or three times the plaintiff’s actual damages, whichever is greater). Everyone has a private right of action and can take action against companies that have invaded their privacy. Class actions are also possible.
Like the CCPA/CPRA, CIPA is a California state law, but its practical impact may extend beyond state lines. Businesses located outside of California may still fall under CIPA when their activities involve communications with California residents.
Why CIPA is becoming a hot spot for US marketers
CIPA saw relatively little use when lawmakers enacted it. But it makes a surprise return in the digital age. Some Internet users are suing websites that collected data during their visits, claiming that CIPA also applies to digital tracking. To oversimplify, common tracking mechanisms (beacons, SDKs, pixels, fingerprints, cookies, session replay, etc.) amount to intercepting traffic and are therefore illegal under CIPA. Because anyone can bring a private action, many U.S. companies now face CIPA-related complaints.
Initially, most marketers and specialist lawyers rejected the argument that CIPA covers digital tracking. The online advertising trade association, IAB, has even published a defense toolkit detailing how advertisers can counter CIPA’s allegations.
But more and more companies started to set up after first decisions denied the motions to dismiss and suggested that those claims might have some merit. To our knowledge, no final decision exists. The situation therefore remains unclear.
How Marketers Need to Adapt
More and more legal departments are asking their marketing teams to implement new tools to improve compliance.
Your #1 priority should be to maintain constant and open communication with your legal department. They are responsible for interpreting the law and determining its compliance. But that doesn’t mean you have to stay inactive.
Your team should provide the technical and business information your legal department needs to make informed decisions, including what data is critical to your operations, how you collect it, what tools you use, and how you can customize their configuration.
The most basic option, requested by many of our clients’ legal departments, is to block tracking until users consent to cookies or tracking, ensuring that consent is given before any alleged CIPA-type interception. However, this means losing a significant amount of data, as consent rates typically range from 60% to 80% with opt-in or opt-out banners.
Other solutions are emerging to minimize data loss. One of them is server-side tracking, where data is sent through an intermediary server. Some early decisions, notably Smith v. Rack Room Shoes Inc.suggest that CIPA would not apply in this case. You should bring this option and others, like Google Tag Gateway, to your legal department to evaluate how they can help you.
Keep in mind, however, that compliance with CIPA does not eliminate the need to comply with CCPA. Certain requirements may also apply simultaneously. For example, cookie banners must meet all CCPA requirements, including symmetry.
The best strategy is to invest in a broader data collection plan, paying particular attention to zero-party data (data provided voluntarily by customers) and first-party data (data you own), as they provide the highest quality and are the least vulnerable to challenges.
Third-party data is among the most vulnerable to legal challenges and technical limitations. Rethinking how you collect and activate data will help minimize CIPA-related impacts and support long-term sustainable performance.
Data Governance Should Be a Marketing Priority
The unexpected re-emergence of CIPA has created uncertainty among U.S. legal departments that make compliance decisions, but marketers provide the business and technical context, from explaining technical tools to evaluating data collection strategies.
A strong partnership between legal and marketing departments helps your business navigate legal uncertainty while allowing MOps to operate with as few restrictions as possible.
CIPA also points out that data governance is now a key element of marketing operations. Well-planned data governance improves data availability across the organization and supports long-term enablement and growth. Conversely, poor data governance can create legal risk and erode customer trust after public incidents such as data breaches.
Data governance is at the center of any long-term marketing strategy.
Note: We are not legal professionals. We will leave the legal analysis to lawyers and attorneys, and nothing in this article constitutes legal advice.
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