California Privacy Agency Issues Landmark Fine Over Cookie Opt-Outs
A $632,500 penalty highlights growing scrutiny of ad tech privacy practices
In July 2025, the California Privacy Protection Agency (CPPA) imposed a $632,500 civil penalty on a company for violations of the California Consumer Privacy Act (CCPA) and its updated regulatory framework. This case is being widely viewed as a landmark moment in U.S. state-level privacy enforcement, with significant implications for brands, publishers, and ad tech intermediaries.
What Happened
According to reporting from the National Law Review1, the company was penalized for multiple compliance failures under the CPPA’s oversight:
Confusing Opt-Out Flows: Consumers who attempted to decline targeted advertising were forced through unclear or burdensome verification steps, a direct violation of state rules requiring accessible opt-outs.
Improper Vendor Relationships: Contracts with ad tech partners did not adequately govern how personal information could be used or shared, leaving gaps in accountability.
Asymmetric Consent Design: Cookie banners and consent management tools (CMPs) presented acceptance more prominently than rejection, echoing so-called “dark patterns” already under EU scrutiny.
Failure to Honor Privacy Rights: Requests to opt out of the sale or sharing of personal information were either delayed or not honored at all.
Why It Matters
This is the first major enforcement action by the CPPA since it assumed direct oversight of privacy regulation in California. The size of the fine, while not massive compared to European GDPR penalties, signals a willingness to actively audit and punish misaligned practices.
Three broader lessons stand out:
Privacy UX is Now Regulated
It’s no longer enough to provide a checkbox or a hidden link. Regulators are scrutinizing the user experience; whether opt-outs are genuinely accessible, and whether consent flows are free from coercion.Vendor Contracts Are Critical
Ad tech ecosystems rely on chains of data sharing, but the CPPA is making clear that primary businesses are responsible for ensuring their vendors are legally bound to respect consumer rights.Compliance is an Ongoing Obligation
Privacy rights (opt-out, correction, deletion) aren’t “set it and forget it.” Regulators expect companies to demonstrate they can respond quickly and consistently, not just put up policy pages.
Implications for Ad Tech
For advertisers, publishers, and intermediaries operating in California (or serving California residents), the ruling reinforces several practical takeaways:
Audit Consent Management Platforms (CMPs): Ensure that cookie banners are balanced and compliant, not nudging users toward acceptance.
Review Vendor Agreements: Contracts should explicitly outline data handling practices and obligations under CCPA/CPRA.
Prepare for Audits: Document internal processes for how privacy rights requests are handled, and test these flows as rigorously as you would a sales funnel.
Watch for Expansion: Other U.S. states with privacy laws - like Colorado, Virginia, and Connecticut - may follow California’s lead in moving from guidelines to penalties.
The Bigger Picture
The CPPA’s fine is part of a global trend where regulators are narrowing the gap between written law and actual enforcement. Just as European regulators have penalized companies for cookie consent design, U.S. enforcement is now focusing on the details of how privacy is operationalized.
For the ad tech industry, this means compliance can no longer be treated as a legal afterthought, it is becoming a competitive differentiator. Companies that design transparent, user-friendly privacy experiences are likely to avoid fines, build trust, and strengthen long-term customer relationships.