In this episode of Countdown to GDPR, Jonathan Armstrong, a partner at Cordery Compliance in London and I consider the roles of vendors in GDPR. These roles are both in complying with GDPR and substantively following the regulation itself. The first area is a vendor which is a subject matter expert in the areas of data protection and data privacy.
Armstrong discussed an actual advertisement where a company claimed to be a ‘GDBR’ expert. Leaving aside the copy editing FUBAR, the ad also cited regulatory requirements from preliminary drafts of GDPR which were superseded by the final version of the legislation. He stated, “there's still the difficult thing that corporations out there that are struggling but there are snake oil salesmen who are trying to prey on them and sell them projects that they don't need and not sell them projects that they do need. There is definitely a skills gap. And obviously as we get closer to GDP that gets all the more worrying.”
Beyond this problem of technical competence, vendors present another set of risks under GDPR. Many organizations with literally worldwide operations are concerned with their potential liability for their vendors in the United Kingdom in the EU or in countries under GDPR. Armstrong noted that the initial inquiry a company should make is who is the data controller and who is the data processor. Under the old rules, data controller was the corporation and the data processors were the vendor. With days of cloud computing and software as a service (SaaS) these lines are more blurred. He noted “as a very general rule the corporation remains liable for everything that it does even if it uses a vendor to process data on its behalf or to manage part of the service.”
GDPR will require a more robust third-party risk management process for vendors. Armstrong explained, “when you are bringing vendors onboard you need to go through a proper process to do due diligence on them. “There are some warning signs to start off with, such as if a vendor says I understand all about GDPR and then talks to you about PPI you should show them the door.”
He went on to add, “If they say you can't have any audit rights. Show them the door. If they say we will not commit to telling you about data breaches within 72 hours. Show them the door. There are various minimum requirements that a vendor has to meet under GDPR and if they don’t, find somebody else.” But simply performing background due diligence is not enough.
You should have an appropriate set of contract terms and conditions around GDPR compliance in your agreement with them. There should also be “some sort of attestation about what they're doing particularly” around continued GDPR compliance. If certainly would want to know where the data is going to be hosted and if there are ISO 27000 certificates in place for the data centers. Finally, the management of this risk must continue throughout the life-cycle of the third-party relationship with the customer.