Neural Data and Consumer Privacy: California’s New Frontier in Data Protection and Neurorights

The world of neurotechnology is no longer confined to laboratories. Companies like Elon Musk’s Neuralink are developing brain-computer interfaces that aim to treat neurological disorders, restore mobility, and eventually enable human-computer interactions at the speed of thought. Meanwhile, devices from companies such as Emotiv and Kernel offer brainwave monitoring for consumer use, targeting everything from mental health tracking to improved focus and productivity. These developments show tremendous promise but introduce complex ethical and privacy challenges related to neural data—data derived directly from human brain activity.

Recognizing the unique risks posed by neurotechnology to consumers, on September 28, 2024, California’s Governor Gavin Nesom signed into law SB 1223, amending the California Consumer Privacy Act (CCPA) to classify “neural data” or “brain-generated data” as sensitive personal information. This amendment grants consumers rights over their brain-generated data, including the ability to request, delete, and restrict its sharing. This article examines the scope of the law, implications for businesses, emerging ethical and legal challenges, a comparative look at global neurorights efforts, and potential future directions in neural data regulation.

The Scope of the Law: Defining Neural Data as Sensitive Personal Information

The California Consumer Privacy Act (CCPA) is a comprehensive privacy law that grants California residents rights over their personal data, including the ability to know what data is collected, opt out of its sale, and request its deletion. When it first passed in 2018, the CCPA sought to enhance consumer privacy by imposing strict obligations on businesses to handle personal information transparently and securely.

California’s recent amendment to the CCPA is a major advancement in data protection as it recognizes neural data as sensitive personal information. The CCPA now defines neural data as “information that is generated by measuring the activity of a consumer’s central or peripheral nervous system, and that is not inferred from nonneural information.”

Traditional categories of sensitive data include biometrics (such as fingerprints and pupils for iris scans), health data, Social Security numbers, driver’s licenses, precise geolocation information, and banking details (such as credit card and account numbers). Thus, by adding neural data to this list, California recognizes the unique privacy risks associated with brain-based data, which can reveal intimate details of an individual’s mental state, cognitive function, and potentially even unconscious biases.

For example, Muse Headbands is a company that uses Electroencephalogram (EEG) technology to monitor brain activity and offers users insights into their relaxation and focus levels. While marketed as wellness products, these devices capture real-time brainwave data that could inadvertently reveal sensitive personal information about emotional states or cognitive performance. Data collected from EEGs, such as neural patterns linked to emotions, thoughts, or preferences, could harm consumer privacy if misused for intrusive profiling, unauthorized behavioral predictions, or manipulation by advertisers or employers. Under California’s amendment, consumers now have rights over this data; they can request to access, delete, or restrict its sharing.

Implications for Businesses: Heightened Compliance Standards

For companies in California’s neurotechnology sector, compliance with neural data privacy requirements introduces both challenges and opportunities. It is important to note that businesses collecting neural data from California residents were already subject to the CCPA. However, the recent amendment that classifies neural data as sensitive personal information imposes significantly stricter obligations on how such data is handled. The CCPA applies to businesses that meet specific thresholds, such as annual gross revenues exceeding $25 million, buying, receiving, or selling the personal information of 100,000 or more consumers or households, or earning 50% or more of annual revenue from selling consumer data.

Previously, under the general provisions of the CCPA, neural data was treated like any other personal information, which required companies to provide basic privacy notices, offer consumers the right to opt out of data sales, and implement reasonable security measures. These requirements, while significant, were relatively broad and applied equally to all categories of personal data.

Now, with neural data designated as sensitive personal information, businesses must meet heightened requirements. Companies are required to secure explicit consumer consent before collecting or processing neural data and must provide more detailed disclosures that clearly explain how this information will be used. Data collection and retention practices are now subject to strict limitations, requiring businesses to collect only what is necessary for the stated purpose and to retain it only for as long as necessary. The amended law also mandates enhanced security measures to protect neural data, treating it with the same rigor applied to health, banking, and biometric data. Additionally, consumers now have expanded rights over their neural data, including stronger options to access, delete, and restrict its processing. Privacy notices will need to be rewritten to reflect the specific nature of neural data collection, and systems must be upgraded to handle heightened security and operational demands.

Companies must ensure that their practices not only meet current legal standards but also align with evolving consumer expectations for privacy and autonomy. As neurotechnology products continue to expand in the consumer market, businesses in this space face increasing scrutiny from regulators and privacy advocates. Addressing these challenges proactively positions companies as leaders in ethical neurotechnology and allows them to avoid penalties and reputational risks.

Bridging the Gaps in Data Privacy: From Federal Shortcomings to Global Neurorights

While the Health Insurance Portability and Accountability Act (HIPAA) offers robust protections for health information on the federal level, its scope is largely limited to data handled by healthcare providers, insurers, and related entities. Neurotechnology companies—particularly those producing consumer devices like wearable brainwave trackers or brain-computer interfaces—mostly fall outside of HIPAA’s jurisdiction, as these devices are not typically prescribed by healthcare professionals, covered entities under HIPAA. This leaves the neural data they generate largely unprotected at the federal level, despite its potential to reveal deeply personal insights about individuals’ cognitive and emotional states.

California’s legislation positions the state at the forefront of a growing global movement to establish neurorights and protect mental privacy. State Senator Josh Becker (D-CA13), a key advocate for the law, emphasized that “SB 1223 is an innovative, necessary measure that will prevent the unethical use of your neural data by companies who collect it.” California joins Colorado, which enacted its own neurorights legislation in April, in leading the charge within the United States.

Globally, the neurorights movement is gaining traction, with Chile emerging as a trailblazer. In 2021, Chile became the first country to constitutionally protect mental privacy, explicitly protecting individuals from unauthorized access to or alteration of their cognitive functions. Chile’s constitution now emphasizes the need for transparency in brain data collection to prevent the exploitation of cognitive information by commercial entities. Europe’s General Data Protection Regulation (GDPR) provides additional context for this movement, as its robust privacy framework on biometrics and health information lays the foundation for future protections that could include neural data. While GDPR does not currently classify neural data as a distinct category, discussions around AI and advanced biometrics suggest that regulatory expansion may be on the horizon.

The alignment of California’s law with these global initiatives highlights a growing global consensus: neural data requires unique safeguards to ensure mental autonomy and prevent exploitation. For companies operating across multiple jurisdictions, California’s neural data privacy law could serve as a template for navigating an increasingly complex regulatory landscape. California is not only protecting its residents but also contributing to a broader effort to establish ethical standards for the future of neurotechnology.

Societal and Psychological Implications: Privacy in the Age of Neurotechnology

California’s proactive stance on neural data privacy reflects a commitment to protecting consumers by anticipating potential harms before they occur. A key lesson comes from Illinois, where the Biometric Information Privacy Act (BIPA)—the first biometric privacy law in the US—was born out of a real-world issue. BIPA was motivated by the Chapter 11 bankruptcy of Pay By Touch, a biometric payment company that collected consumers’ fingerprint data. When the company filed for bankruptcy, concerns arose about the fate of this sensitive biometric information, especially when the bankruptcy court approved the sale of the company’s database of biometric data.

Similarly, in the context of neurotechnology, anticipating the dangers posed by rapid innovation is important to protect consumers. Emerging neurotechnology products, driven by tech giants, show the transformative potential of neural data—and its risks. For instance, Apple has filed patents for future iterations of AirPods capable of monitoring brain activity by tapping into users’ ears. While such advancements may offer groundbreaking applications for mental health monitoring or improved user experience, they also raise questions about the extent of neural data collection and the possibility of commercializing insights into users’ thoughts and mental states. Meta, on the other hand, is exploring a “neural interface” product that could enable users to interact with technology through brain signals, which also introduces concerns about how much control Meta—or other entities—could exert over the data collected by such interfaces.

Beyond innovation by these tech giants, the societal implications of neurotechnology extend into the realms of autonomy, mental privacy, and psychological well-being. The ability to monitor brain activity or neural signals blurs the boundary between individual cognition and external technology. For example, companies like Mindstrong, which has shut down its operations, used smartphone data and neural signals to assess mental health in real-time, streamlining mental health diagnoses. The company’s practices raised ethical concerns about the depth of insight companies should have into users' minds. If individuals feel their thoughts or emotional states are being tracked, it could alter their sense of freedom and self-expression.

California’s approach mirrors the lesson learned from BIPA: laws must anticipate the dangers of emerging technologies to safeguard individuals from harm. Addressing these challenges proactively allows society to embrace the benefits of neurotechnology without sacrificing privacy, autonomy, or security in the process.

The Future of Neural Data Legislation: Toward a Global Standard for Consumer Privacy

As neurotechnology continues to develop, the future of neural data legislation will likely involve new, complex frameworks that integrate both technical standards and ethical considerations. Laws should prioritize transparency in how neural data is collected and used, accountability for misuse, consumer consent and control over their information, and safeguards against discrimination or exploitation based on neural profiles. California’s amendment could inspire other US states and countries to recognize neural data as sensitive, setting a precedent for neurorights as a core element of privacy law.

Potential future laws may address the distinction between raw brain data and inferred data—conclusions drawn from neural data patterns. Regulations could impose specific restrictions on how inferences are used—especially in areas like employment, insurance, healthcare, and banking—where biases could harm individuals. Additionally, laws might mandate that companies provide real-time transparency, allowing users to monitor and manage how their neural data is being analyzed and shared.

Another likely area of development will be international coordination on neurorights. Similar to how GDPR set a global standard for data privacy, a unified approach to neural data protection could emerge, driven by collaboration between technology leaders, policymakers, and neuro-ethics experts. Such a standard would not only protect mental privacy but also facilitate ethical innovation in neurotechnology by providing clear, universal guidelines for companies operating across borders.

Final Thoughts: California’s Legislation and the Emerging Era of Neural Data Privacy

California’s landmark decision to recognize neural data as sensitive personal information sets a vital precedent in data privacy, one that could shape the future of neurorights in the US and beyond. For neurotechnology companies, this amendment introduces a complex compliance landscape that requires stringent data handling, transparency, and security. But more than a regulatory shift, this legislation represents a societal commitment to protecting the sanctity of cognitive autonomy and mental privacy.

California’s law stresses the need for privacy standards that evolve alongside technological capabilities. With more countries considering similar measures, California’s approach could become part of a broader movement that balances technological progress with respect for human dignity, setting a foundation for global neurorights standards.

As neurotechnology continues to redefine the boundaries between mind and machine, the decisions made today will determine whether this innovation serves to empower individuals—or to compromise the very essence of human thought. The time to act is now, ensuring that the future of neurotechnology is one of progress, trust, and respect for our shared humanity.