Ensuring Third-Party Data Sharing Compliance: Key Regulations and Best Practices

Third-Party Data Sharing Key Compliance Regulations

Health Insurance Portability and Accountability Act

HIPAA, established in 1996, protects sensitive patient information. With the rise of digital health records and increased reliance on external partners, understanding HIPAA compliance for third-party data sharing is crucial. Critical areas for HIPAA compliance include:

• Business Associate Agreements (BAAs): HIPAA requires covered entities to enter into Business Associate Agreements with third-party vendors handling protected health information (PHI). BAAs establish both parties’ responsibilities and obligations in safeguarding PHI, such as implementing appropriate security measures, complying with the HIPAA Privacy and Security Rules, and reporting any data breaches.
• Risk Assessments and Security Measures: Covered entities must conduct thorough risk assessments of their business associates to ensure necessary PHI safeguards are in place. Assessments should evaluate the third-party vendor’s administrative, physical, and technical security measures. Regular audits and security assessments should also be performed to monitor and maintain ongoing compliance.
• Training and Awareness: HIPAA mandates that all personnel involved in handling PHI receive appropriate training on the regulations and the organization's policies and procedures. This requirement extends to business associates, and it is the responsibility of the covered entity to ensure that their third-party partners are adequately trained and aware of their obligations under HIPAA.

GDPR & Third-Party Data Sharing

Implemented in May 2018, GDPR is a comprehensive data protection regulation that governs the collection, processing, and storage of personal data for individuals within the European Union. Key principles include data minimization, purpose limitation, and ensuring adequate security measures to protect personal data. Here are a couple of key considerations for GDPR and third-party data sharing:

• Data Processing Agreements (DPAs): GDPR requires organizations to enter into Data Processing Agreements with third-party vendors that process personal data on their behalf. These agreements outline the responsibilities of both parties, including the scope and purpose of data processing, the implementation of security measures, and the deletion or return of data upon the contract's termination.
• Data Protection Impact Assessments (DPIAs): Organizations must conduct DPIAs to assess the potential risks associated with third-party data sharing and the subsequent processing of personal data. This includes identifying potential threats to data subjects' rights and taking necessary measures to mitigate those risks.

CCPA & Third-Party Data Sharing

Enacted in January 2020, the California Consumer Privacy Act (CCPA) is a state-level privacy regulation that aims to enhance consumer privacy rights and protections for California residents. Key provisions include the right to access, delete, and opt out of the sale of personal information.

• Service Provider Agreements: Under CCPA, organizations must establish agreements with third-party vendors, known as service providers, who process personal information on their behalf. These agreements should detail the purpose and scope of data processing, prohibit the retention, use, or disclosure of personal information for purposes other than those specified in the contract, and require the service provider to maintain appropriate security measures.
• Vendor Due Diligence: Similar to GDPR, CCPA mandates that organizations exercise due diligence when selecting and engaging with third-party service providers. This involves assessing the service provider's compliance with CCPA, ensuring the implementation of appropriate security measures, and monitoring their ongoing adherence to the regulation.

PCI DSS & Third-Party Data Sharing

Originally developed in 2004 and now on version 4.0, the Payment Card Industry Data Security Standard (PCI DSS) aims to enhance cardholder data security and facilitate the broad adoption of consistent data security measures worldwide. The standard is designed to make sure that organizations have the proper controls and procedures to secure cardholder data. Key third-party data-sharing considerations include:

• Third-Party Vendor Assessments: To maintain PCI DSS compliance, organizations must perform due diligence when selecting third-party vendors that handle cardholder data. This process involves evaluating the vendor's PCI DSS compliance status, security measures, and data handling practices. Engaging with PCI DSS-compliant vendors minimizes the risk of data breaches and ensures the secure processing of cardholder information.
• PCI DSS Requirements for Service Providers: Third-party service providers that process, store, or transmit cardholder data must comply with PCI DSS requirements. Key requirements include:
  
  
  • Maintaining a secure network through firewalls and other network security measures.
  • Protecting cardholder data by implementing strong encryption and access control mechanisms.
  • Regularly monitoring and testing networks for vulnerabilities and ensuring the prompt resolution of identified risks.
  • Implementing and maintaining an information security policy that outlines the organization's commitment to protecting cardholder data.
• Contractual Agreements and Responsibilities: Organizations must establish contractual agreements with third-party vendors, outlining their responsibilities in maintaining PCI DSS compliance. These agreements should address security measures and incident management.

Cross-Measures Can Enhance Overall Compliance

Multiple regulations, such as GDPR and CCPA, share similarities in their data protection objectives. Organizations that operate across multiple jurisdictions can benefit from implementing cross-compliant measures, such as:

• Privacy by Design and Default: Integrate privacy-focused practices into the development and implementation of new products, services, or processes, ensuring that personal data is only collected and processed when necessary, and limiting access to data on a need-to-know basis.

• Data Mapping and Inventory: Maintain an up-to-date record of all personal data processed within the organization, including data shared with third-party vendors. This way, organizations can effectively manage and monitor data flows, ensuring compliance with GDPR and CCPA requirements.

• Incident Management and Reporting: Establish robust procedures for identifying, managing, and reporting data breaches or security incidents, as GDPR and CCPA both require prompt notification of such events.

• Continuous Assessment and Monitoring: Conduct regular assessments of third-party data privacy and security controls and validate the effectiveness of those controls with observable cyber metrics. If your customers’ data appears on a dark web forum from a third-party vendor data breach, then suggest remediations to mitigate the risks.

• Build Enforceable Contract Measures: Ensure that all third-party vendor contracts have enforceable measures for audits, incident response, and data recovery.

Conclusion

Navigating the complex world of third-party data sharing and compliance is a continual challenge across industries. This post highlights HIPAA, GDPR, CCPA, and PCI DSS but many other regional, sector-specific, and global regulations govern third-party data-sharing practices. Investing in robust risk management strategies and maintaining clear contractual agreements are essential. By proactively addressing these considerations, organizations can confidently benefit from third-party data sharing while protecting their customers' data and fulfilling regulatory requirements.

How Prevalent Can Help

Prevalent provides businesses with a comprehensive solution to manage their third-party relationships for data-sharing compliance across multiple regulations. Our single, integrated Third-Party Risk Management (TPRM) platform, makes it easy to:

• Build data protection measures into third-party vendor contracts
• Discover and map data between third-, 4th- and Nth-party relationships
• Perform self-assessments to understand the maturity of internal processes, as well as data owners
• Assess third parties for data privacy controls
• Automate risk response and remediations when third-party answers don’t line up with expectations
• Report on relevant compliance regulations with built-in reporting
• Simplify and speed reporting by automatically mapping assessment results across 50+ regulations and best-practice frameworks
• Receive automated data breach notifications to understand possible risks to your customers’ data

For more details on how Prevalent can help organizations assess their third-party data security controls, read our Data Privacy Regulations white paper, or request a demo and strategy call today.