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4 tips for ethically sharing data with third parties

Illustration of a mobile device with an unsecured lock with eyes around it

Whether you’re an eCommerce business or app developer, it’s likely that you’ll need to engage third parties in the delivery of your products and services.

Of course, the key currency required for these partnerships is data. From customer contact and payment details to app usage analytics and personal profiles, you may need to share this data to process transactions or provide more personalised experiences – so how do you make sure you’re sharing data in a way that is ethical and lawful?

In this article, we’ll cover four key things all business owners should do to share their customers’ data safely and legally with third parties.

1. Inform your customers of how their data is being shared (and who it’s being shared with)

Before you open up the gates for third parties to access your users’ data, you must inform them of your third-party data sharing practices in your website or app’s Privacy Policy and Terms of Use.

Depending on where your business and customers are based, you may need to add a range of other public disclosures, such as a website cookie banner or “Do Not Sell My Personal Information” page on your website.

Your customers should be given the opportunity to review your data sharing practices, the risks involved, and whether or not they consent.

2. Have a clear data sharing agreement in place

In addition to establishing a privacy policy for your business and data sharing practices, you should have a legal document which outlines the how, what, and why of your data sharing agreement with a given third party. This removes any ambiguity around how people’s data can and cannot be used, and ensures that what a third party service does with their data is consistent with your own privacy policy.

For example, before you can integrate Google Analytics with your website, it requires business owners to read and accept their Terms of Use and include disclosures in their own privacy policy around how Google uses any data gathered via Analytics.

3. Don’t share more than what is necessary with third parties

To limit unnecessary risks around your customers’ privacy and your business’ liability, you should only share information that is absolutely essential to whatever service that third parties provide. Applying anonymisation or pseudonymisation techniques to your data, or even providing data in an aggregated format, are all privacy-preserving methods recommended by the General Data Protection Regulation (GDPR).

4. Make sure your third-party partners hold up their end of the bargain

In the same way that your privacy policy should be routinely reviewed, so too should the conduct of your third-party networks. This could involve checking out their recently updated privacy policy or evaluating their current cybersecurity and data protection measures: is it up to scratch with current data security standards?

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