Five Data Privacy Questions For Businesses to Consider In 2026

What businesses should review to stay compliant with U.S. data privacy laws in 2026.

Businesses preparing for 2026 should review five core data privacy risks:

• Whether their privacy policy accurately reflects real data practices
• Which state and federal privacy laws apply to their business
• Whether they sell or share personal data for targeted advertising
• Whether their website uses third-party tracking or chat tools
• How artificial intelligence features affect personal data use

Regular privacy audits can reduce legal risk and protect against, regulatory scrutiny, penalties, and reputational harm.

As we head into 2026, it's more important than ever for businesses to reexamine the ways they handle personal data (also referred to as personal information). The U.S. data privacy legal landscape continues to evolve at a rapid pace, with more and more U.S. states passing comprehensive data privacy laws. As of January 1, 2026, nineteen states have enacted comprehensive data privacy laws (the first was California with the California Consumer Privacy Act back in 2018). 

States are actively enforcing these laws. California, Colorado, and Connecticut recently announced a joint investigative sweep regarding their respective data privacy laws, and a growing number of states have joined a privacy consortium through which states can share information and investigations with each other. 

Beyond these comprehensive data privacy laws, there are many sector-specific privacy laws at the state and federal level governing specific types of information, such as health information and financial information. These laws reflect the growing expectation of data privacy among consumers, who are increasingly aware of their rights. With this in mind, here are five key data privacy questions for businesses to consider as we head into 2026.

Question 1: Is your business’s privacy policy accurate?

Short answer: Your privacy policy must accurately reflect how your business collects, uses, and shares personal data. Inaccurate policies can trigger regulatory fines and lawsuits.

Privacy policies are legally required to be accurate under a myriad of state and federal laws. An inaccurate privacy policy can expose businesses to significant fines and seriously damage relationships with customers.

Among recent enforcement actions: 

• The California Privacy Protection Agency fined Tractor Supply Company $1.35 million for violations of the CCPA, including failure to have a sufficient privacy policy for job applicants.
• The Connecticut Attorney General fined TicketNetwork $85,000 for a deficient privacy policy.
• The Texas attorney general fined Google $1.375 billion (with a B!) for failing to properly disclose the personal data Google was collecting from consumers.

The lesson is clear: simply posting a privacy policy is not enough. Businesses must actively ensure their privacy policies are accurate.

Question 2 – Is your business subject to specific state or federal data privacy laws?

Short answer: Data privacy laws impose varying requirements, so your business should ensure it complies with the laws that actually apply.

Each privacy law (whether state or federal) has its own thresholds for applicability. For example, the CCPA only applies to businesses that meet certain thresholds relating to revenue and processing of personal data. Other laws only apply to specific types of personal data, such as health information under HIPAA. Connecticut’s privacy law applies so long as the business processes “sensitive” personal data. Businesses should review the thresholds for each state and federal data privacy law to determine which ones apply to their operations. 

Although these laws have significant overlap in terms of obligations, the laws are far from identical, and some states have unique requirements that businesses must navigate carefully. These laws impose obligations that go far beyond having an accurate privacy policy. Among other things, they require consumer opt-out mechanisms (more on that below), amendments to vendor contracts, and periodic impact assessments. So, it’s important to know which specific laws apply to your business, and not just assume that compliance with one law means compliance with others.

Question 3 – Does your business sell or share personal data for targeted advertising? 

Short Answer: If your business sells personal data or shares personal data so that it can be used for targeted advertising, you may be required to give consumers the right to opt out of your selling and sharing of their personal data.

Businesses subject to the CCPA and other similar state privacy laws have specific notice and opt-out requirements if they sell personal data or share personal data for targeted advertising. These requirements are very specific. For example, the CCPA requires an opt out link with specific language to be displayed on the business’s website. In addition, several state privacy laws require the business to recognize opt out requests submitted via Global Privacy Controls, also known as “GPCs”. The Connecticut attorney general provides a helpful introduction to GPCs at this website. 

These laws can also pick up activities that at first blush may not seem like sharing for targeted advertising. For example, if a business uses the Meta Pixel, and Meta is able to use the information collected from the business’s website to generate targeted advertisements for specific consumers, this kind of sharing is exactly what is regulated by those laws.

California, Colorado, and Connecticut recently launched a joint enforcement effort targeting noncompliance with GPC requirements. The three-state coalition is now contacting businesses suspected of violating this requirement and requesting that those businesses cure noncompliance. California’s $1.35 million fine of Tractor Supply Business was in part based on Tractor Supply’s failure to properly honor opt-out requests submitted via GPC.

Given the increasing scrutiny from states regarding opt out requests, businesses that sell personal data or share it for targeted advertising should ensure their opt-out processes are compliant with applicable law.

Question 4 – Does your website use third-party tracking tools or chatbots?

Short Answer: If you use third-party tracking tools or chatbots on your website, you may face consumer lawsuits if you don’t disclose your use of those technologies.

If your business uses tracking technologies (e.g., cookies, pixels) or third-party chatbots, your privacy policy should be clear about the use of these technologies. 

Over the last few years, consumers have filed many lawsuits against businesses for failing to accurately explain the use of tracking technologies and chatbots. These lawsuits rely on novel legal theories, such as violation of anti-wiretapping laws like the California Invasion of Privacy Act (CIPA). These lawsuits are having mixed success. However, even when certain claims trend in favor of defendants, plaintiffs seek other legal theories for recovery. For example, court decisions made toward the end of 2025 in California suggest that plaintiffs may start bringing claims based on California’s “Pen Registry” law. As a result, the law for these cases is somewhat fluid. Even if these lawsuits can be defeated, the cost of defending isn't something a business wants to deal with. 

To reduce the chance of a lawsuit being filed in the first place, businesses must understand the tracking tools and chatbots they deploy, the personal data these tools collect from consumers, and how that personal data is used. Businesses should properly inform consumers about their use of the tracking technologies and chatbots (including through disclosures in the privacy policy), and provide the choices required by applicable law. 

Question 5 – Is your business using artificial intelligence that processes personal data? 

Short answer: You should know how your AI tools handle personal data, and ensure that your consumers are aware of those uses.

As businesses increasingly integrate artificial intelligence into their services, transparency about the privacy implications of those features becomes paramount. It may seem that an AI vendor having access to personal data is no different than any other vendor having access to personal data. But AI (especially generative AI) is still a new feature for many products, and consumers are especially sensitive to AI vendors having access to their personal data. 

The threat of AI being trained on personal data weighs heavily on a lot of consumers. Any business that integrates AI into its products should be fully aware of what data its AI vendors have access to, and what those vendors do with that data. Most importantly, AI models should not train on personal data unless the business has been transparent about this training with its users, namely through appropriate disclosures in the privacy policy and terms of service. 

If a business fails to appreciate the sensitivity of AI vendors processing personal data, the business may lose customers and even be subjected to lawsuits for privacy violations. Indeed, the use of generative AI may be subject to the same legal claims as the tracking and chatbot technologies mentioned above.

Frequently Asked Questions About Data Privacy Compliance in 2026

What happens if my business ignores state privacy laws

Businesses can face regulatory fines, government investigations, lawsuits, and reputational damage.

Do small businesses have to comply with data privacy laws?

Some laws include thresholds based on revenue or data volume, but many small businesses still qualify depending on their activities.

Do tools like Meta Pixel count as sharing personal data?

Often yes. Many state privacy laws consider this “sharing for targeted advertising,” which triggers disclosure and opt-out obligations.

Do AI tools require special privacy disclosures?

The rules of disclosure aren’t any different than for other vendors, but businesses often overlook the ways AI tools process personal data, and fail to accurately disclose those uses..

How often should a business conduct a privacy audit?

At least annually, and whenever the business introduces new technology, vendors, or data practices.

Conclusion

It's never a bad time for a business to reassess its data management practices, but the start of the year is especially helpful as new data privacy laws come into effect. In this new era of heightened consumer awareness and active legal enforcement, a well-managed privacy program is the best defense against unwanted legal claims, financial settlements, and negative publicity.

SPZ Legal can assist businesses with their privacy programs, including through its multi-step data privacy audit. Our team helps businesses navigate the complex landscape of US and foreign data privacy laws in a cost effective and efficient manner. Contact us today to ensure your business is prepared for the privacy challenges of 2026 and beyond.