Ensuring GDPR Compliance in Supplier Relationships

In the ever-evolving landscape of data protection, keeping abreast of legal developments is critical for organisations seeking to ensure GDPR compliance. A recent ruling by the European Court of Justice (CJEU) provides important clarity on the conditions for imposing administrative fines on data controllers for GDPR breaches. This article explores the implications of this ruling for businesses, and provides insights on how to ensure GDPR compliance with suppliers who process your data. 

Key takeaways from the CJEU ruling: 

• The CJEU ruling underscores the importance of unlawful conduct in the imposition of fines, requiring GDPR violations to be committed intentionally or negligently.  
• In addition, if the recipient of the fine is part of a group of companies, the fine must be calculated on the basis of the turnover of the entire group.  
• Furthermore, a controller may be fined "in respect of transactions carried out by a processor to the extent that the controller can be held responsible for such transactions". It's this last point that we'll focus on in this article. 

Considerations for businesses on supplier relationships 

Due diligence in supplier selection: 

As part of supplier onboarding, conduct thorough due diligence to ensure their commitment to GDPR compliance. 

Evaluate their data processing practices, any publicly available documentation (privacy notices, cookie statement), and assess their track record of compliance with data protection regulations. 

Include GDPR compliance in contracts: 

Explicitly outline GDPR compliance expectations in supplier contracts. Clearly define responsibilities for data processing operations, and stipulate the need to comply with all applicable data protection laws. 

Monitor and audit supplier activities: 

Regularly monitor supplier activities related to data processing. Conduct regular audits or request audit reports from your partners to verify compliance with GDPR requirements, emphasising the need for transparency and accountability. Also, check the reputation of their auditors. 

Additional contractual clauses: 

Acknowledge that you, as the data controller, may be subject to fines for operations performed by your processors. 

Work with your legal team to clearly define roles and responsibilities in supplier contracts to delineate areas where the processor may be held accountable, and how this can be mitigated. Include clauses in contracts that address the financial impact of GDPR violations, and specify how fines will be distributed in the event of data breaches. 

Conclusion: 

In light of the CJEU ruling, organisations need to take proactive measures to ensure GDPR compliance in their supplier relationships.  

Robust due diligence, clear contractual obligations, ongoing monitoring and adherence to GDPR  principles will contribute to a strong data protection foundation. By incorporating these practices, businesses can navigate the complex landscape of data processing with confidence, foster a culture of compliance across their supplier ecosystem, and ultimately avoid fines for both parties.