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ComplyAuto anticipated and has been addressing this trend to protect dealers for more than a year. You can read some of our prior articles here, here, and here. Additionally, NADA released an alert in April 2024, which you can find here. As we’ve previously noted, these legal claims under wiretapping laws pose a real risk to businesses, and a considerable number of dealerships nationwide have already been affected by these recent waves of cases.
Wiretapping Background
Most wiretapping claims are brought under the California Invasion of Privacy Act (“CIPA”), an older statute originally created to address phone wiretapping, though similar claims can be brought under privacy laws in states like Massachusetts, Illinois, and Pennsylvania. Plaintiffs’ attorneys are initiating cases against dealerships nationwide by having clients merely visit out-of-state dealership websites and then generating demand letters or lawsuits.
The claims argue that certain online technologies—like third-party cookies, chatbots, session replays, web beacons, and other tracking mechanisms—violate anti-wiretapping provisions under CIPA and similar laws.1 Essentially, they claim that these technologies capture or share data without explicit consent, a potential violation if cookie consent mechanisms are either not implemented or improperly configured. A properly configured cookie banner can stop these claims from being made.
The good news is that ComplyAuto has developed a cookie banner to keep you compliant and protect you against these and similar claims by providing meaningful consumer choice. Our cookie banner solution is not only fully compliant but also entirely customizable to suit each dealership’s unique needs. You have complete control over its functionality, ensuring it aligns seamlessly with your dealership’s preferences. We provide you with the tools necessary to protect your business and stay compliant effortlessly.
Third Party Legal Guidance to Dealers
The reality is that when you provide the required choice, some consumers do choose not to allow cookies, and that can have an impact on analytics and retargeting data. All dealers need to carefully weigh that potential impact against their risk tolerance. That is your choice and yours alone.
However, because of this impact, you may have been approached by marketing or website companies suggesting you make changes to weaken the protection provided by your cookie consent banner. Typically, these recommendations direct you to change your website’s banner functionality to enable the advertiser’s cookies or pixels to activate before users set their cookie preferences. This allows these third parties to gain more information from your website (possibly for you, but also likely for your OEM or other third party) but it does so by raising potential legal risks that you, as the dealer, could face by following those recommendations.
Again, the choice is yours and yours alone, and ComplyAuto has an array of customization choices for you to consider, but before you adjust your cookie consent management settings, consider the potential impact on your dealership and whether your current banner settings impact your analytics or other essential data needs. You may ultimately conclude that it is worth the risk but just know that claims that less visibility into certain website data equates to lost sales can be exaggerated or misleading and may simply mean that the advertiser or website provider could be missing out on revenue and data that is often sold/shared with third parties.
ComplyAuto Supports Dealers
ComplyAuto is not an advertiser or a website provider and does not benefit from blocking (or not blocking) any company’s cookies or pixels. Our goal is to provide you with the tools to enable you to be protected and the guidance to do so. We do not oppose targeted advertising and analytics; our recommendations are guided purely by the current legal landscape.
Bottom Line
Before implementing changes recommended by website providers or marketing firms, dealers should consult their legal counsel. Dealers may also want to ask these third-party providers to indemnify the dealership against any legal claims arising from the choice to weaken your banner according to their advice and guidance. Companies confident in their recommendations should be willing to stand by them financially.2
ComplyAuto remains committed to implementing your preferred banner settings but is equally committed to ensuring that dealers are making informed choices with a clear understanding of all relevant information.
Next Steps
For more information, download our comprehensive guide to cookies. You can also contact a ComplyAuto CSM, who is an expert in these areas and available to help.
Be sure to consider NHADA's Legal Partners for additional guidance.
1 - These are the most common claims, but there are several other theories under state and federal law that have been put forth, and we expect the plaintiffs’ bar to continue to “push the envelope” in seeking novel theories. See also state and federal regulatory activity in this area, including recent guidance from the NY Attorney General: HERE.
2 - Note that choosing to weaken the ComplyAuto banner in line with many of these vendor recommendations will void the ComplyAuto Compliance Guarantee because of the increased potential risk.
Author: Marc Sanborn, Senior Product and Regulatory Specialist, ComplyAuto
The original article is available here.
