In a surprising move that’s raising eyebrows across the tech world, California’s privacy regulators have significantly scaled back proposed AI oversight rules, effectively giving big tech companies more room to track and analyze user data.

The California Privacy Protection Agency (CPPA) recently made substantial changes to draft regulations that would have imposed strict safeguards on AI systems. What started as a comprehensive plan to protect consumer privacy has been dramatically watered down following pressure from business groups and Governor Gavin Newsom.

The most notable changes include completely removing regulations around behavioral advertising and narrowing the definition of “automated decisionmaking”. This means companies like Google, Meta, and TikTok will face fewer restrictions on creating user profiles and targeting ads based on personal data.

Consumer advocacy groups are sounding the alarm. Sacha Haworth from the Tech Oversight Project bluntly stated that “watering down proposed rules to benefit Big Tech does nothing to achieve the goal of protecting data privacy”.

The revised draft significantly reduces compliance costs for businesses, dropping estimated first-year enforcement expenses from $834 million to just $143 million. Agency staff predict that 90% of businesses initially required to follow the rules will now be exempt.

Board member Brandie Nonnecke expressed concern about the changes, warning that allowing industry to define its own risk assessments could lead to companies essentially “writing the exam by which they’re graded”.

Despite the rollbacks, some protections remain for workers and students in critical sectors like finance, lending, housing, and healthcare. These areas will still require human oversight in fully automated decision-making systems.

The public has until June 2 to comment on these draft rule changes, with final implementation expected by 2027. As the debate continues, it’s clear that the balance between technological innovation and personal privacy remains a complex and contentious issue.

While the tech industry celebrates this regulatory retreat, privacy advocates are left wondering: at what cost to consumer rights?