Regulating the Mind: Neuromarketing, Neural Data and Stakeholder Trust Under California’s CCPA

Abstract

This study investigates how neuromarketing practices intersect with consumer privacy regulation in California, with particular attention to the 2024 Senate Bill 1223 (SB 1223), which amends the CCPA/CPRA to explicitly define “neural data.” By examining corporate strategies and regulatory frameworks, the paper evaluates how firms navigate the tension between innovation, ethics, and consumer protection. A qualitative, multiple-case study approach was adopted, focusing on Coca-Cola, Frito-Lay, and Hyundai. Data were collected from corporate privacy policies, industry publications, and legislative documents, triangulated through doctrinal legal analysis and cross-case synthesis. The analysis reveals that, while companies comply with disclosure, consent, and oversight requirements under the CCPA/CPRA, such compliance remains largely procedural, with transparency often being technical rather than consumer-friendly, consent being insufficiently informed, and protections for vulnerable groups being inconsistently enforced. SB 1223’s recent definition of neural data directly encompasses techniques such as EEG, fMRI, eye-tracking, and biometrics, underscoring the urgent need for firms to treat neuromarketing as a category of regulated practice rather than discretionary innovation. The study is limited by its reliance on publicly available documentation and by the recency of SB 1223, which precludes observation of mature compliance patterns. Future research should explore consumer perceptions, track evolving regulatory responses, and extend the analysis across various sectors, including healthcare, education, and non-profits. This study contributes to theory by extending stakeholder theory to neural data governance and by conceptualizing neuromarketing as a governance-intensive strategic capability situated at the frontier of consumer rights and technological innovation. It contributes to practice by demonstrating how firms can transform compliance with emerging neural data regulations into a strategic capability that strengthens consumer trust, ethical legitimacy, and brand equity.