Authored by Chris Olson, CEO & Co-Founder, The Media Trust
This article originally appeared in Website Magazine in September 2017
Compliance officers need to rein in the regulatory risks associated with their digital properties. The European Union’s General Data Protection Regulation (GDPR) is a conversation starter for most companies looking to control compliance, reputational and revenue risks. However, while focus has been on identifying data elements–customer, partner and employee–held by the organization, most have overlooked the data collection activities occurring via the company’s websites and mobile apps. Just as with Pandora’s box, there’s a slew of GDPR-driven evil emitting from your digital properties.
Digital vendors and the GDPR
The internet is a highly-dynamic environment and most websites require a host of third-party providers to render content on a consumer’s browser. In fact, enterprises tend to find two to three times more external code on their websites than expected. The purpose of this code is to provide or enable services–data management platforms, image or video hosting, marketing analytics, content delivery, customer identification, payment processing, etc.–required to deliver the website experience. However, most enterprises are not aware of the full depth of their reliance on these vendors and therefore do not fully examine the code executing in their own digital environment. This results in “Digital Shadow IT”, which is rampant on most enterprise digital properties since a majority of third-party contributed code executing on the consumer browser operates outside IT infrastructure.
True, third-party digital vendors power today’s robust and feature-rich websites and apps; the downside, however, is that their code execution goes largely unchecked, enabling unauthorized and unmonitored data tracking. This applies to not only known third-party vendors, but also other vendors with whom they are associated—frequently an external provider needs to call a fourth, fifth and sixth party to help execute its requested service. This essentially means that not only do organizations need to get their own house in order, they need to ensure their digital vendors do so as well.
Reliance on web application security tools (appsec) to holistically monitor website and app code is misguided since current web appsec tools are inadequate in capturing third-party code execution. Additionally, security and compliance professionals aren’t fully aware of the amount of consumer data collection activity that takes place–such as cookie drops, pixel fires, device ID fingerprint collection, and more. When GDPR goes live in May 2018, Ignorantia juris non excusat (ignorance of the law excuses not) will not be a valid defense when confronted with a data privacy violation. It comes as little surprise that around 86% of organizations worldwide are concerned about GDPR noncompliance.
What goes online stays online
One of GDPR’s key requirements centers around personal online behavior data—specifically information collected from an individual’s digital activity, i.e., websites visited, links clicked, forms submitted, etc.–and imposes restrictions on its safe transfer outside the European Union to other businesses or legal entities. Organizations will need a clear understanding of whose data is being collected, what data is being collected, what it is used for, and, if the data subject resides within the EU, where this information is being transferred and confidence that it is adequately protected!
Thanks to the density of code executing behind today’s websites and mobile apps this data inventory task is easier said than done.
Data documentation is much harder than companies anticipate, particularly for media and ecommerce websites offering digital display advertising space. Ultimately companies will need to ensure each of their advertising partners do not engage in activity which could put their organization or customer data in violation of GDPR.
Let’s not forget that recent website security breaches also demonstrate that third-parties are often the weakest link in the security chain. While an organization may employ rigorous security controls around physical vendors and contracted partners, they fail to extend the same rigor to their digital counterparts. Gartner predicts that by 2020, 33% of attacks experienced by enterprises will be as a result of shadow IT resources. Based on this evidence it is no wonder the GDPR focuses so heavily on third-party relationships. Clearly, when it comes to unchecked third-party code on websites and mobile apps, it isn’t just compliance risks but significant security risks that enterprises need to consider. How do firms control something they enable but don’t see and can ill-afford to ignore?
Limiting the risks
The odds are stacked against enterprise website operators, but creating a holistic digital vendor risk management program is a step in the right direction. The first step is documenting a few basic facts about your specific digital environment by asking website teams the following:
1. How many third-party vendors execute on websites and mobile apps?
2. What are the names of these vendors?
3. What exactly are they doing, i.e., intended purpose and also any additional, out-of-scope activity?
4. Do we have contracts to authorize the scope of the work?
5. How does third-party vendor activity affect overall website and mobile app performance?
6. What are the risks to data privacy?
7. What is my business’s exposure to regulatory risk via vendor behavior?
8. Is my organization maintaining encryption throughout the code execution chain?
9. As these vendors change over time, what is the process to identify new vendors and their activity on websites and apps?
10. Have Data Compliance policies been communicated to digital vendors?
Once these questions are successfully (or satisfactorily) answered, they should be revisited on a regular basis. Continuous monitoring of the digital environment helps create a compliance mechanism that alerts you to violations.
Organizations must then, of course, strive to document how their third-party partners handle this same data—another GDPR requirement. This information is critical to ensuring customer data is not being put at risk at any time regardless of data holder. In effect, both your organization and your third parties need to develop, communicate and enforce the policies, processes and technologies necessary to support all digital-related aspects of GDPR, from consumer online behavior data collection, use, storage and transfer.
When the regulation comes into force, enterprises that look at this as a key opportunity to protect user/ consumer data, and their own brand, could establish a competitive advantage. The end result should also translate to fewer breaches, less opportunities for cybercriminals, and a much safer cyberspace. The internet’s Pandora’s box may have been opened, but it doesn’t have to spread evil into the world.