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What is a “third-party” service?

It’s important to understand the difference between first-party and third-party services, and what it means for user privacy, when it comes to writing your website or app privacy policy.

To help you differentiate between the two, let’s use Facebook as an example. Facebook is a social networking platform that users interact with through services such as the Facebook browser and mobile app, Messenger and Facebook Ads. These are first-party services, or services that a business provides directly to customers or users.

On the other hand, third-party services are owned by a vendor that is independent from the first party. Websites and apps like Facebook often integrate with third-party apps like online games, marketing tools and eCommerce platforms to provide a unified experience for users.

From an online privacy perspective, the use of third-party services has been highlighted as a potential risk by industry regulators. Remember Facebook’s Cambridge Analytica scandal in 2018? That was a clear example of third-party data sharing gone wrong.

Laws such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) have introduced new sets of rules and disclosure requirements for businesses that use third-party services.

There are three key areas that all businesses should consider in regard to their privacy policy:

1. Third-party data processors

If your business uses third-party services to collect and manage your users’ personal data, you will need to disclose this in your privacy policy and confirm that they are compliant with the same data protection laws that apply to you.

As you are responsible for the vendors you choose to engage with and entrust your customers’ data to, you could be liable for any potential data breaches or privacy violations that could arise as a result.

If you use or own a SaaS website or app, this is definitely something to look into for your own privacy policy.

2. Third-party cookies

As an online business, you probably use website analytics and run digital marketing campaigns – both of which often rely on the use of third-party cookies. To comply with online tracking regulations and the Terms of Use for third-party services such as Google Analytics, your privacy policy must disclose whether your website uses third-party cookies.

Additionally, you will need to get informed consent from users before you use any third-party cookies – if you haven’t already, you may need to add a cookie consent banner to your website.

3. Third-party data sharing

Both the GDPR and CCPA have introduced new regulations around third-party data sharing. Under the GDPR, you must have a “lawful basis” to share data with any third parties. Typically, the lawful basis you will need to rely on is consent. Your privacy policy must disclose whether you share data with third parties, and you must get explicit consent from users prior to sharing their personal data.

Similarly, the CCPA also requires you to list all the third parties your business shares data with in your privacy policy. Under this law, users can choose whether or not their personal information is sold to third parties. If the CCPA applies to your business, you must provide explicit notice prior to sharing user data and create a “Do Not Sell My Personal Information” page on your website for users to exercise their “Right to Opt-Out”.

Your responsibility to protect your users’ privacy doesn’t end where third parties come into the picture, which is why you must always do your due diligence when working with or integrating third-party services with your app or website.

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