ADMT and the CPPA: New Rights for California Consumers in 2026
The California Privacy Protection Agency (CPPA) has finalized its regulations regarding Automated Decision-Making Technology (ADMT). If your business uses AI to make significant decisions about people's lives, you are now under the microscope.
What is ADMT?
ADMT covers any system that uses computation to make or execute a decision, or to facilitate human decision-making. This is broader than just "AI"—it includes complex algorithms and rule-based systems.
"Significant Decisions"
The regulations apply when ADMT is used for "significant decisions," which include:
- Employment: Hiring, firing, promotion, or task allocation.
- Finance: Credit scoring, loan approvals, or insurance pricing.
- Housing: Tenant screening or lease approvals.
- Education: Admissions or financial aid.
- Healthcare: Access to benefits or medical services.
New Consumer Rights
1. Right to Know
Consumers must be notified before their data is processed by ADMT. You must explain the logic of the system and the likely outcome.
2. Right to Opt-Out
In many cases, consumers now have the right to say "No" to AI. If they opt out, you must provide a non-automated alternative (e.g., a human review process) without penalty.
3. Right to Access
Consumers can request information about how a specific decision was made about them. "Black box" excuses are no longer valid; you must be able to explain the "why."
Compliance Checklist
- [ ] Update Privacy Policy to include ADMT disclosures.
- [ ] Build an "Opt-Out" mechanism for your automated workflows.
- [ ] Conduct a Risk Assessment for any ADMT in use.
- [ ] Train staff on how to handle manual reviews when a user opts out.
Risk Assessments
Before deploying ADMT for significant decisions, businesses must conduct and file a Risk Assessment with the CPPA. This assessment must evaluate the potential for bias, discrimination, and harm to consumers.
Conclusion
The era of "move fast and break things" is over for algorithmic decision-making. The CPPA's rules ensure that humans remain in control of the most important aspects of their lives. Businesses that embrace fairness and transparency will thrive; those that rely on opaque algorithms face significant legal peril.