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A CCPA Compliance Checklist for Third-Party Risk Management

If your vendors handle data on California residents, then you'll want to focus on 3 key CCPA requirements. Here's what to look for in your third-party risk assessments.
By:
Scott Lang
,
VP, Product Marketing
October 08, 2021
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Originally passed into law in June 2018 and in effect since January 2020, the California Consumer Privacy Act (CCPA) regulates business’ collection and sale of consumer data, aiming to protect California residents’ sensitive personal information and providing consumers with control over how that information is used.

In January 2023, the CCPA will be updated through the California Privacy Rights Act (CPRA) and apply to personal information collected by a covered business on or after January 1, 2022. While largely identical to the CCPA, the CPRA:

  • Adds content to align it more closely with the EU’s General Data Protection Regulation (GDPR)
  • Increases penalties for violations
  • Authorizes the creation of the California Privacy Protection Agency, which will likely lead to increased enforcement

This post examines key requirements in CCPA, who it applies to, and how organizations can ensure their third parties are protecting their customer data. For simplicity, this post refers to both regulations – CCPA and CPRA – as the CCPA.

How Does the CCPA Define Personal Information?

Let’s start with how “personal information” is defined. The CCPA defines sensitive personal information as, “information that identifies, relates to, describes, is reasonably capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household.”

What Does the CCPA Require Companies (and Their Third Parties) to Do?

The CCPA requires companies to inform California residents about data being collected prior to collecting the data. It allows consumers to access all personal data held by a company and receive information about individuals or organizations with whom that data has been shared. It also allows consumers to opt out and prevent their personal data from being sold or shared with a third party.

Who Does the CCPA Apply To?

While the CCPA is technically California state law, its reach is felt far beyond the borders of the Golden State. CCPA oversight is not limited to businesses headquartered in California, or even to businesses physically operating in California—the CCPA applies to consumer data collected from any resident of California.

Given the fact that California is home to about 40 million people and would be the 5th largest economy in the world if it were its own country, the odds are good that if your business is collecting consumer data, you have collected the data of a California resident. In fact, many businesses opt to treat every consumer as if they were a California resident, and therefore prepare for CCPA compliance across their businesses.

Checklist: Three Key CCPA Compliance Requirements for Third Parties

Section 1798.100 of the CCPA states that a business that collects a consumer’s personal information and sells or shares it with a third party must enter into an agreement with that third party that “obligates the third party, service provider, or contractor to comply” with the CCPA’s privacy regulations. Organizations should therefore ensure that their third-party partners and service providers are well prepared to protect consumer information. The first step in any security program is to identify and prioritize existing risks via a thorough security assessment. CCPA Section 1798.185 (15) speaks to, “requiring businesses whose processing of consumers’ personal information presents significant risk to consumers’ privacy or security” to conduct annual cybersecurity audits and submit to the California Privacy Protection Agency a risk assessment. Specific provisions in the CCPA that organizations should examine include:

1798.81.5 (b), implementing and maintaining reasonable security procedures and practices

For any regulatory standard, organizations must ensure that they measure the correct risks and apply the correct controls. In the case of CCPA, that could mean leveraging the Center for Internet Security (CIS) Critical Security Controls as a framework.

Look for a solution that assesses not only third-party privacy controls, but also broader third-party risks using a large library of auditor-approved assessments.

1798.140 (c), ongoing manual reviews and automated scans and regular assessments, audits

To avoid reputational and operational risk and business disruptions, organizations should ensure that their partners and third parties adhere to reasonable security measures. However, attempting to conduct third-party assessments using manual questionnaires and spreadsheets is inconsistent and unscalable.

Look for third-party risk management platforms that automate regular assessments with continuous monitoring for a complete view of a vendor’s risk.

1798.185 (a) perform a cybersecurity audit on an annual basis; and (b) submit a regular risk assessment to the CCPA

Most risk assessment surveys focus on general controls and policies. Complying with the CCPA requires a technical understanding of data processing – specifically with the CIS Critical Security Controls, which are suggested as a framework to ensure proper security over data.

Look for solutions that map third-party assessment answers to the CIS Critical Security Controls to ensure complete coverage for the CCPA and help distinguish properly designed systems from “bolt-on” security and privacy features to ensure full compliance. Look for effective reporting to satisfy CCPA audit and compliance requirements, as well as to present findings to the board and senior management.

The CCPA Third-Party Compliance Checklist

Read this report to understand third-party considerations in the California Consumer Privacy Act (CCPA) and discover how to assess your vendors for CCPA compliance.

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Feature ccpa checklist

What About 4th and Nth Parties?

Only once your business has identified the third parties to which you sell consumer data can you begin to take steps to ensure CCPA compliance, such as updating your legal agreements with the third party or opening channels of communication in case of a breach. Then, as part of that process extend your discover out to 4th and Nth parties. Identifying relationships between your organization and third parties and their third parties will discover dependencies and visualize information paths, making the process of reporting much simpler.

How Prevalent Can Help

Prevalent provides businesses with a comprehensive solution to manage your third-party relationships for CCPA compliance. Our third-party risk management platform makes it easy to:

  • 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 when third-party answers don’t line up with expectations
  • Report on CCPA compliance with built-in reporting
  • 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 to support CCPA requirements, read the white paper, The CCPA Third-Party Compliance Checklist or request a demo today. To learn how third-party risk management applies to 20+ other regulations, download The Third-Party Risk Management Compliance Handbook.

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Leadership scott lang
Scott Lang
VP, Product Marketing
Scott Lang has 25 years of experience in security, currently guiding the product marketing strategy for Prevalent’s third-party risk management solutions where he is responsible for product content, launches, messaging and enablement. Prior to joining Prevalent, Scott was senior director of product marketing at privileged access management leader BeyondTrust, and before that director of security solution marketing at Dell, formerly Quest Software. He can be reached on Twitter @scottinohio, LinkedIn and Facebook.
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