California has long been at the forefront of data privacy regulation in the United States, and the latest updates from the California Privacy Protection Agency (CPPA) continue that trend. In this blog, we break down the 2025 rules adopted under the California Consumer Privacy Act (CCPA), which significantly expand obligations for businesses that process personal data or use automated decision-making technologies.

These new regulations are not just incremental adjustments — they signal a growing regulatory focus on transparency, algorithmic accountability, and cybersecurity. Businesses of all sizes will need to reassess their internal governance processes, technology stacks, and third-party vendor relationships to prepare for enforcement in the coming years.

Key Updates: What Has Changed

1. Automated Decision-Making Technology (ADMT) Oversight

The new rules broaden the definition of automated decision-making technology to include everything from AI and machine learning systems to simpler tools that influence significant consumer decisions. Businesses will need to:

• Provide clear disclosures when ADMT is used to make decisions impacting consumers.
• Offer consumers the ability to opt out of automated decision-making.
• Create a process for consumers to appeal decisions and request human review.
  Organizations must also conduct risk assessments before deploying ADMT, document their findings, and keep detailed records of decision-making processes.

2. Cybersecurity Audits

Large enterprises and, eventually, smaller businesses will be required to undergo regular cybersecurity audits. These audits must include documentation of policies, incident response plans, and technical controls. The roll-out will be phased based on company revenue, with the largest organizations beginning compliance in 2028 and smaller ones following by 2030.

3. Annual Risk Assessment Attestations

Businesses conducting high-risk data processing must complete risk assessments and submit an annual attestation confirming they have been performed. These attestations are designed to hold businesses accountable for regularly reviewing the risks of their data processing practices.

4. Clarifications for the Insurance Sector

The CPPA has provided additional guidance on how CCPA obligations apply to insurance companies, particularly around data processing and sharing practices. Insurers should review their compliance programs to ensure alignment with these clarifications.

Implementation Timeline & Important Dates

The new regulations will roll out over several years. Rules related to automated decision-making will become effective on January 1, 2027. Cybersecurity audit requirements and annual risk assessment attestations will begin in 2028, with compliance dates staggered by business size.

This phased approach provides lead time, but businesses should start planning early—especially if they rely heavily on automated decision systems or handle large volumes of personal data.

Implications for Businesses

The expanded regulations introduce a higher compliance burden and will require significant operational changes for many organizations. Some of the most critical implications include:

• Greater Transparency Requirements – Businesses must explain how they use data and automated decision systems, making privacy policies more detailed and consumer-friendly.
• Increased Liability and Enforcement Risk – Failure to comply could result in penalties and reputational damage.
• Stronger Vendor Management – Companies must ensure third-party partners meet these new obligations, particularly around ADMT and cybersecurity.
• Need for Cross-Functional Coordination – Privacy, legal, IT, security, and product teams will need to collaborate closely to achieve compliance.

Steps to Prepare

To stay ahead of the new rules, businesses should begin taking the following steps now:

1. Map Automated Decision Systems – Document all technologies that fall under the ADMT definition, including their inputs, outputs, and potential impacts on consumers.
2. Conduct Preliminary Risk Assessments – Evaluate potential risks related to data processing and automated decision-making to inform future reporting and attestations.
3. Strengthen Cybersecurity Practices – Review policies, access controls, and incident response plans to prepare for upcoming audit requirements.
4. Update Privacy Notices and Consumer Rights Processes – Ensure you have procedures for disclosures, opt-outs, and appeals in place well before enforcement begins.
5. Review Vendor Contracts – Add provisions requiring vendors to support compliance efforts, share information, and maintain appropriate safeguards.
6. Educate Internal Teams – Train key stakeholders to understand the new regulatory expectations and their role in compliance.

Conclusion

The CPPA’s newly adopted regulations mark a turning point in privacy compliance, signaling a future where businesses will be held to higher standards of transparency, accountability, and security. While the effective dates may seem distant, the preparation required is substantial—particularly for organizations that rely on automated decision systems or manage complex data ecosystems.

Taking action now will not only reduce the risk of regulatory penalties but also build consumer trust at a time when privacy expectations are higher than ever. Businesses that move early will be better positioned to comply efficiently, avoid costly last-minute overhauls, and demonstrate leadership in responsible data practices.