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COVID-19: How to Keep Cybersecurity in Mind When Negotiating Work-From-Home Vendor Contracts
COVID-19 spurred an overnight surge in demand for work-from-home vendors — from videoconferencing companies to cloud service providers. This caused some companies to rush into service contracts without fully appreciating the privacy and cybersecurity risks involved.
Indeed, news of the meteoric rise and sudden scrutiny of some videoconferencing vendors shows just how important privacy and cybersecurity issues are when retaining a vendor. Even companies with long-standing contracts in place with these types of vendors may find those contracts outdated and in need of renegotiation in light of the growing demand for privacy legislation.
To consider privacy and cybersecurity appropriately when entering into, or renegotiating, vendor contracts, businesses should answer the following questions during the vendor negotiation process:
- What personal information is the vendor collecting, using, and transferring in providing the service?
- Does the vendor qualify as a "service provider" under the California Consumer Privacy Act, or a "processor" under the European Union's General Data Protection Regulation?
- Does the business need to update its privacy policy to reflect the new vendor relationship or new data flows?
- Does the contract reflect applicable cybersecurity standards and include breach notification provisions?
- Does the contract define the events that may trigger the cancellation of service and provide for a certain level of uptime?
Each question is explained in greater detail below.
Understand How Personal Information Will Be Collected, Used and Transferred
To start, businesses should understand the depth of access the vendor will have to personal information or other sensitive information, how the vendor will use that information, and whether the vendor will transfer that information to any third parties. Vendors oftentimes default to giving themselves wide latitude with the personal information they process, which can trigger legal obligations for the companies using their services. Businesses should review their vendor contracts and vendors' privacy policies closely and consult with their information security personnel to identify inconsistencies and limit access and use to only that which is appropriate under the circumstances. They should then ensure the vendor contract accurately reflects their understanding of the vendor's use of personal information.
Identify Any Legal Obligations Implicated By the Contract
Next, businesses should ask whether employing the vendor triggers any obligations under data privacy laws, such as the California Consumer Privacy Act (CCPA) or the General Data Protection Regulation (GDPR).
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