October 26, 2020

Volume X, Number 300


October 26, 2020

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Beware of Third Party Data Breaches

study by Ponemon Institute found the percentage of US and UK companies that faced a data breach because of a vendor or third party is growing. In the US alone, 61% of surveyed respondents confirmed that their organisation had experienced a data breach caused by a third party, which is up 5% from last year and 12% from 2016.

Ponemon Institute’s research also found that 22% of surveyed respondents admitted they did not know if they had a third party data breach during the past 12 months and more than three quarter of companies thought third-party cyber security breaches were increasing.

These research findings suggest to us that businesses must do more to guard against third party data breach risks. This may involve:

  • conducting due diligence on third party vendors to assess their security and privacy practices as part of a procurement process and throughout the ongoing vendor relationship;
  • including robust privacy and data security clauses in contracts with third parties, including the requirement that the third party notify you of actual and suspected data breaches; and
  • keeping a register of all third party vendors your business engages and the types of personal, sensitive of confidential information the third party vendors accesses, stores or shares on behalf of your business.

The third party landscape is becoming increasingly complex and businesses need to better manage and understand what exactly their vendors are up to and doing to protect their data.

Copyright 2020 K & L GatesNational Law Review, Volume VIII, Number 324



About this Author

Cameron Abbott, Technology, Attorney, Australia, corporate, KL Gates Law Firm

Mr. Abbott is a corporate lawyer who focuses on technology, telecommunications and broadcasting transactions. He assists corporations and vendors in managing their technology requirements and contracts, particularly large outsourcing and technology procurements issues including licensing terms for SAP and Oracle and major system integration transactions.

Mr. Abbott partners with his clients to ensure market leading solutions are implemented in to their businesses. He concentrates on managing and negotiating complex technology solutions, which...

Keely O'Dowd, K&L Gates, attorney, Melbourne

Ms. O'Dowd is an experienced lawyer with a focus on technology and sourcing projects. She advises on a broad range of technology transactions, including procurement, outsourcing and software licensing. This work includes drafting and advising on a range of IT procurement and supply agreements. Ms. O'Dowd advises a range of corporations on privacy and cybersecurity.