How to Structure Vendor Data Processing Addendums for Easy Adoption


Key Takeaways:

  • Standardized DPAs allow you to streamline their operational processes, as there’s no need to adjust systems and procedures to meet the differing requirements of customized DPAs.
  • Monitoring and enforcing one set of data protection terms is less burdensome than managing multiple customized DPAs.
  • Being transparent about your data protection practices from the get-go can significantly reduce negotiation friction.

How to Structure Vendor DPAs for Easy Adoption by Amy Guzman

As a vendor, Data Processing Addendum (DPA) negotiations can be challenging and lengthy. The key to success is having a DPA that addresses common concerns while offering some flexibility. Aim for a DPA that minimizes redlines and accelerates acceptance. This approach fosters trust and transparency with customers while streamlining negotiations. 

Keep it Simple and Clear: Crafting Customer-Friendly DPAs

The goal is simple: Create a DPA that is straightforward, comprehensive, and reassuring.  A standardized DPA brings a host of benefits, such as:

  • Operational Efficiency: Standardized DPAs allow you to streamline their operational processes, as there’s no need to adjust systems and procedures to meet the differing requirements of customized DPAs. Watch out for customized customer requirements that can become costly and time-consuming to manage.   
  • Risk Mitigation: Customization in DPAs can lead to errors or oversights in compliance if your practices are not aligned with the specific terms agreed upon with individual customers. A standard integrated DPA mitigates this risk by setting uniform compliance standards that match your operational capabilities.  Keep in mind that security vulnerability scans may not be done as frequently for customers with bespoke requirements.
  • Oversight Ease: Monitoring and enforcing one set of data protection terms is less burdensome than managing multiple customized DPAs, which can vary significantly from one customer to another.  Be wary of DPA compliance obligations that cannot be sufficiently managed by your people and technology resources.

Top Customer Concerns and Hot Ticket Issues in DPAs

Customers often review vendor DPAs scanning to ensure their top concerns are addressed.  Some DPAs are comprehensive of other customer hotspots like data security and GDPR compliance terms. Being transparent about your data protection practices from the get-go can significantly reduce negotiation friction.

Liability and Indemnity

Liability and indemnity obligations are often heavily negotiated by customers, be sure to allow for language that balances protection and is a fair allocation of risk. For most, negotiating liability and indemnity in the main agreement, whether an MSA or Terms of Service, is often preferred since most will look to the main agreement first when your obligations are triggered.  If you are negotiating liability and indemnity in the DPA, ensure that there are no conflicting terms in the MSA that create issues.

Security Measures and Audit Rights

Security and audit rights are top of mind for customers, and this is your opportunity to shine and demonstrate your company’s commitment to security measures.  Clearly articulate the security controls you have in place. Customers need to feel confident that their data is protected. For example, specify the encryption standards you adhere to and the frequency of your security audits. Let customers know how and if they can exercise their audit rights.

Sub-processors

Transparency is key when it comes to your sub-processors, how you select them, push obligations to them, and how you conduct due diligence. Clearly define sub-processor management and responsibilities.  Be sure to include how and when you will notify customers when you onboard or offboard a new subprocessor, and how customers can ask questions or object to any new subprocessor.  For example, consider including a clause notifying and allowing for customer review of any new sub-processors, ensuring customers feel involved in the decision-making process.

Data Breach Notification

Implement a robust data breach notification process that complies with applicable laws. 

Learn More: To further master DPA negotiations, access a free DPA Template & Checklist written by this author or watch the full 1-hour training video presented with this author.

Streamlining the Review Process

To ensure your DPA is user-friendly, focus on clarity and simplicity.  Consider the following tips to streamline the review experience for your customers.

  • Use Plain Language: Write the DPA in plain language that is easy to understand, avoiding legal jargon where possible. This makes the document more approachable and reduces the time needed for clarification.
  • Organize for Readability: Structure the DPA with clear headings, subheadings, and bullet points to make it easy to navigate. A well-organized document allows customers to quickly find and understand the information they care about most.
  • Customer FAQs: Consider drafting a Customer DPA/Privacy FAQs that includes the top questions you receive from customers and your company’s answers to those questions.  This is your opportunity to highlight any challenges to certain requests for changes and why requests aren’t possible based on your product or service. FAQs should be easily accessible for your customers, such as posting on the legal page of your company’s website or providing a copy along with the DPA to each customer.
  • DPA Playbook: Have a DPA playbook for your team with standard responses on pushback and questions and fallback language you can easily accept without creating operational challenges. 
  • Summary of Key Provisions or TLDR: Adding a summary of key provisions or a TLDR (Too Long, Didn’t Read) at the start of your DPA or as a cover sheet to your DPA can help highlight what you want your customers to know, such as demonstrating that your DPA aligns with recognized standards like GDPR Article 28 or provisions required under CPRA.  Think of your summary or TLDR as creating a road map for your customers that signals to customers that you are up-to-date with the latest data protection standards.

Commitment to Continuous Improvement

Customer Feedback

Use the insights gained from each negotiation to refine your DPA, making it as relevant and user-friendly as possible.  Customer redlines and feedback can be used as part of your annual DPA review and update, ensuring that you are always striving to improve the customer experience.

Update. Update. Update.

Legal and technological landscapes evolve, make sure your DPA does too. Regular updates ensure that your DPA remains relevant and effective.

A well-drafted vendor DPA goes beyond fulfilling a contractual obligation—it embodies your dedication to safeguarding data and underscores your commitment to cultivating enduring, trust-based relationships with your customers. By prioritizing transparency, uniformity, and attentiveness to customer needs, you can transform DPA negotiations into a seamless and affirming process for everyone.

Learn More: To further master DPA negotiations, access a free DPA Template & Checklist written by this author or watch the full 1-hour training video presented with this author.

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2 Responses

  1. I can’t access the Free DPA template and playbook, etc, as it keeps saying: “Please enter a valid email address.” when I try to enter my email address.

    Please can you let me know how to fix this issue, so I can obtain a free copy of your playbook, etc?

    Many thanks.

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