The Quiet Year Before the Storm: How 2025 Reshaped Privacy Law and What Your Business Must Do This New Year

As 2025 has closed, the privacy landscape was calm. No major federal legislation emerged and no single state law dominated the headlines. The reality is very different. Throughout the year, lawmakers and regulators reshaped the rules that determine how businesses collect, use, store, and share data. These changes begin taking hold as we enter 2026, and any business that waits for enforcement before updating its practices will be at a disadvantage.

California enacted the most consequential privacy updates in years. Nine other states revised existing laws in ways that will redefine compliance obligations. Regulators issued detailed rules, expanded expectations, and signaled that the coming year will involve far more active enforcement.

This was not a quiet year. It was a foundational year, and businesses that act now will be far better positioned for the operational and regulatory realities of 2026.

California Reset the Standard for 2026 with Three Major Privacy Laws

California’s updates will have immediate operational impact once they take effect in early 2026. The three new laws are AB 566, AB 656, and SB 361. Together, they elevate consumer control and sharply increase the obligations placed on businesses.

AB 566: Required Global Opt Out Signals

Browsers will transmit a built in global opt out signal that businesses must honor. Consumer choice becomes automatic, and companies must align their systems accordingly.

AB 656: Enforceable Data Deletion

Social platforms must provide simple account deletion and must fully remove user data. Retention through inaction or technical complexity will no longer be acceptable.

SB 361: A New Compliance Environment for Data Brokers

Data brokers will face stricter disclosure requirements, accelerated deletion timelines, and mandatory audits. Any company that relies on brokered data must reassess its practices immediately.

If your business interacts with California consumers or buys data related to them, these laws matter. Compliance work cannot wait until the new year.

Nine States Quietly Rewrote Their Privacy Laws

Rather than passing new statutes, nine states focused on redefining the laws they already had. These revisions carry significant weight heading into 2026.

Expanded Definitions of Sensitive Data

States broadened what qualifies as sensitive information. Neural data, financial signals, and more expansive health related categories are now included.

Stronger Protections for Minors

Regulations now impose stricter consent requirements, profiling limits, and redesigned data flows for any service that may be accessed by minors.

New Rights Related to Profiling and Inferences

Companies must now be prepared to explain or disable automated profiling in more circumstances. Many existing systems are not built to support these rights.

Shifted Applicability Thresholds

Some businesses that believed they were exempt are now within scope. Others moved into higher compliance tiers without realizing it.

Higher Duties of Care

States clarified what qualifies as reasonable security. Standards have increased and programs built on earlier definitions may no longer be sufficient.

Takeaways

Any privacy program anchored to 2023 or 2024 assumptions requires reassessment. The risk of relying on outdated frameworks will grow significantly once enforcement actions reflect these new definitions.

Rule Making and Enforcement in 2025 Set the Stage for 2026

Regulators spent the year refining what existing laws mean in practice. These interpretations become the operational reality as we move into 2026.

Rules Governing AI and Automated Decision Making

Businesses must be able to explain, validate, and document model behavior. Regulatory expectations for transparency and accountability have increased.

Mandatory Cybersecurity Audits

Many businesses will now face recurring, verifiable security audits. Assurances are no longer sufficient and objective validation is becoming standard.

Expanded Youth and Age Appropriate Design Requirements

These rules will require meaningful redesigns of consent mechanisms, data flows, and interface structures.

Stricter Geolocation Controls

Platforms and mobile applications will need to modify software development kits, consent flows, and data routing practices.

Increased Accountability for Data Brokers

Shorter timelines, more disclosures, and more severe penalties will define the compliance environment for data brokers and for any company that uses their data.

Enforcement throughout 2025 reflected these themes. Regulators secured high value settlements, imposed multi year audits, increased investigations into tracking technologies such as pixels and session replay tools, and issued injunctions that forced companies to rebuild internal systems rather than simply pay a fine.

The message is clear. Regulators want documented systems that function consistently and withstand scrutiny. Promises are no longer enough.

What Businesses Must Understand Going Into 2026

The coming year will not be defined by new statutes. It will be defined by the acceleration of everything that changed in 2025. Companies that prepare now will adapt smoothly.

Companies that wait will find themselves correcting problems under pressure, cost, and regulatory oversight.

Lex Tecnica Is Ready to Help Your Business Prepare

Lex Tecnica has assembled a specialized privacy practice built for this moment. Our team includes experienced data privacy attorneys, former general counsel who understand operational realities, and intellectual property attorneys with expertise in AI, software, and complex data flows.

We assist businesses with:

• Comprehensive data mapping and remediation

• Privacy program redesign for the 2026 environment

• Preparation for global opt out signal requirements

• Youth compliance and age appropriate design frameworks

• Evaluations of AI driven and automated decision systems

• Readiness audits and gap assessments

• Creation of regulator ready documentation

Our goal is simple. We help your business operationalize compliance in a way that is practical, sustainable, and defensible.

If you want to begin 2026 ahead of the regulatory curve, our team is ready to assist. Contact Lex Tecnica to schedule a strategic privacy review before these requirements take effect.