If your business works with external vendors, as most do, then General Data Protection Regulation (GDPR) compliance doesn’t stop with your organization.
Under the GDPR, you’re accountable not only for how you handle personal data, but for how your vendors share, process, and secure it as well. That means every analytics tool, customer relationship management (CRM) system, ad platform, or cloud service that processes personal data can extend your third-party risk.
GDPR third-party risk management is the process of identifying, assessing, and managing the risks posed by working with external vendors to help maintain GDPR compliance.
As vendor ecosystems grow more complex, especially across cloud infrastructure and marketing technology stacks, it becomes more challenging to ensure that third parties are processing personal data lawfully, securely, and transparently.
This guide breaks down GDPR third-party risk management in practical terms. You’ll learn how the GDPR governs vendor relationships, how to assess and document third-party risk, and what operational processes can help you stay compliant.
At a glance
- You remain accountable under the GDPR for how vendors process and protect personal data on your behalf.
- Key GDPR Articles governing third-party risk include Arts. 24, 25, 28, 32, 35, and 45.
- Before sharing data, conduct vendor due diligence and implement a binding Data Processing Agreement (DPA).
- Apply privacy by design, data minimization, and risk-based security measures across vendor relationships.
- Conduct Data Protection Impact Assessments (DPIAs) for high-risk processing and document mitigation steps.
- Monitor vendors continuously, including cross-border transfers, consent validity, and ongoing security compliance.
What is a third party under the GDPR?
Businesses refer to “third-party risk” in the context of vendors, partners, or suppliers, but “third party” has a very specific meaning under the GDPR.
According to Art. 4(10) GDPR, a third party is “a natural or legal person, public authority, agency or body other than the data subject, controller, processor and persons who, under the direct authority of the controller or processor, are authorized to process personal data.”
For the purposes of this article, we’ll be referring to any external entity that isn’t your organization, internal staff, or the individual whose data you’re processing as a third party. That includes any vendors you authorize to process data on your behalf.
Common examples of third parties include entities providing tools you rely on for analytics or CRM, as well as e-commerce vendors, marketing and advertising platforms, social media vendors, and external consultants who access personal data to do their work.
Which GDPR Articles govern third-party risk management?
Several GDPR articles dictate how you’re expected to manage third-party security risks.
We’ll go through the most relevant articles and unpack what each requires in practical terms. That way, you’ll understand where your obligations start, what they cover, and how they connect.
Art. 24 GDPR: Responsibility of the controller
What the Article says
If your organization determines the purposes and means of processing personal data, then you’re considered a controller under the GDPR. That remains true even when processing is carried out by external vendors.
Art. 24(1) GDPR outlines the controller’s overarching obligations. It states that the controller must “implement appropriate technical and organizational measures to ensure and to be able to demonstrate that processing is performed in accordance with this Regulation.”
The Article also makes clear that these measures must reflect risk and be reviewed and updated where necessary.
What this means for your business
To support your compliance with Art. 24 GDPR:
Assess risk to data subjects based on data type, processing purpose, and potential impact on data subject rights before you onboard vendors
Implement documented technical and organizational measures that cover vendor access, data use, and security.
Maintain evidence of how and why vendors are selected, approved, and monitored.
Regularly review vendor relationships as tools, processing activities, or risks change.
If a processor manages personal data in a noncompliant way, regulators will still expect you to show that reasonable, risk-based controls were in place.
Art. 25 GDPR: Data protection by design and by default
What the Article says
Art. 25 GDPR requires you to embed data protection into your processing activities from the outset, and not as an afterthought.
The Article states that controllers must: “implement appropriate technical and organizational measures… which are designed to implement data protection principles, such as data minimization, in an effective manner and to integrate the necessary safeguards into the processing.”
It also requires that businesses only process personal data that’s necessary for a specific purpose. This rule applies to the amount of data collected, the extent of processing, and the storage period.
In the context of third parties, privacy by design principles must determine how vendors are selected and how their processing activities are configured before any personal data is shared.
What this means for your business
To support your compliance with Art. 25 GDPR:
Evaluate vendors for privacy and data protection capabilities before you onboard them, not after.
Support data minimization and other privacy by design principles by implementing technical measures, such as pseudonymizing all data shared with third-party vendors.
Limit vendor access by default and configure third-party tools to process only the personal data that’s strictly necessary for a defined purpose.
Review vendor configurations regularly as features or processing purposes change.
Art. 28 GDPR: Processor
What the Article says
Processors are entities that process personal data on behalf of data controllers according to their instructions. Unlike controllers, processors don’t decide why or how data is processed; they carry out instructed processing activities for your business.
Art. 28 GDPR sets the obligations for processors. It requires that processors “provide sufficient guarantees to implement appropriate technical and organizational measures in such a manner that processing will meet the requirements of this Regulation.”
It also mandates that processing is governed by a binding contract known as a Data Processing Agreement (DPA). A DPA must define the subject matter, duration, legal basis, type of data, and the obligations of both parties.
It also outlines the rules a processor needs to follow in order to engage the services of other sub-processors to help handle the controller’s data.
What this means for your business
To support your compliance with Art. 28 GDPR:
Vet processors before onboarding to verify that they can meet GDPR security and compliance requirements.
Put a comprehensive DPA in place upfront, before any personal data is shared.
Make processors aware that they must only act according to your documented instructions. This includes changes to the type of data processed, the duration of processing, and authorization for any international data transfers or the addition or replacement of sub-processors.
Monitor processor compliance over time, including sub-processor usage and security measures.
Art. 32 GDPR: Security of processing
What the Article says
Art. 32 GDPR focuses on personal data protection through appropriate technical and organizational measures.
It requires controllers and processors to implement security measures that align with the level of risk involved with processing. They must consider factors like the nature of the data, the context of processing, and the potential impact on individuals.
The Article states that “the controller and the processor shall implement appropriate technical and organizational measures to ensure a level of security appropriate to the risk.”
In practice, this includes the confidentiality, integrity, availability, and resilience of processing systems, as well as your company’s ability to restore customer data and regularly test security measures.
What this means for your business
To support your compliance with Art. 32 GDPR:
Monitor processor compliance over time, including sub-processor usage and security measures.
Implement technical safeguards like encryption, user access controls, and secure data transfer protocols.
Require vendors to have incident response and recovery plans in place for technical and physical incidents such as data breaches or the loss of data.
Include security obligations in your DPAs and develop a process to periodically review their compliance measures.
Art. 35 GDPR: Data protection impact assessment
What the Article says
Art. 35 GDPR requires controllers to conduct a Data Protection Impact Assessment (DPIA) whenever processing is likely to result in a high risk to the rights and freedoms of individuals.
This assessment helps identify and mitigate risks before processing begins, including when personal data is shared with third-party vendors.
The article states: “Where a type of processing, in particular using new technologies, and taking into account the nature, scope, context and purposes of the processing, is likely to result in a high risk to the rights and freedoms of natural persons, the controller shall, prior to the processing, carry out an assessment of the impact of the envisaged processing operations on the protection of personal data.”
A DPIA must describe the processing and assess whether it is necessary and proportional to its intended purpose. It should also evaluate risks and identify measures to mitigate them.
What this means for your business
Art. 35 GDPR makes risk assessment a formal, documented step in third-party onboarding in cases where there is the potential for higher risk to the rights of data subjects. To support your compliance with Art. 35 GDPR:
Identify processing activities that may pose high risks, such as profiling, large-scale processing of sensitive data, or extensive surveillance activities.
Conduct a DPIA before engaging vendors to evaluate their potential impacts on data subjects.
Depending on the organization type and risk to the rights of data subjects, you may need to appoint a Data Protection Officer (DPO) and seek their advice during your DPIA.
Document risks, mitigation measures, and decisions in writing.
If your DPIA indicates that the processing would result in a high risk and you are unable to implement enough measures to mitigate that risk, you will need to consult the relevant supervisory authority before you begin any processing.
Review DPIAs regularly, especially when there is a change in risk level, such as an amendment to vendor operations.
Art. 45 GDPR: Transfers on the basis of an adequacy decision
What the Article says
Art. 45 GDPR governs cross-border data transfers to countries outside the European Union (EU) and European Economic Area (EEA).
It permits personal data to be transferred without specific authorization if the European Commission has decided that the destination country can provide an adequate level of data protection. This is known as an adequacy decision.
The Article states, “A transfer of personal data to a third country or an international organization may take place where the Commission has decided that the third country… ensures an adequate level of protection.”
Adequacy decisions enable consistent data transfers while maintaining high levels of data protection. They remove the need for additional contractual measures, provided the destination country meets GDPR standards.
What this means for your business
To support your compliance with Art. 45 GDPR:
Verify whether your vendor’s country, territory, sector, or even individual organization has an adequacy decision before beginning any data transfers.
If no adequacy decision exists, implement alternative safeguards such as Standard Contractual Clauses (SCCs) or approved codes of conduct, as per Art. 46 GDPR, to help ensure adequate levels of protection are maintained.
In a minority of cases, you’ll need to seek out additional authorization from the supervisory authority of the controller’s member state.
Monitor the status of adequacy decisions at least every four years, as they can be updated or revoked.
Key components of GDPR third-party risk management
Here’s a quick breakdown of the key components of GDPR third-party risk management that shows you where controls and responsibilities need to be applied.
| Due diligence and assessment | Evaluates vendor compliance and security before onboarding to verify that they provide “sufficient guarantees” to implement appropriate technical and organizational measures. Helps ensure that either only low-risk partners handle data or that specific safeguards are established to manage risk. |
| Contractual obligations | Formalizes the relationship through a Data Processing Agreement. This legally binding contract determines the subject matter, duration, and nature of processing, while instructing the vendor to act only on your documented instructions. |
| Joint liability considerations | These clarify that while the controller is primarily responsible, a processor is liable for damages if it fails to comply with its specific GDPR obligations or acts contrary to the controller’s instructions. Under Art. 82 GDPR, both parties can be held liable for the entire damage to fully compensate the data subject. |
| Data Protection Impact Assessments | A mandatory, documented process for processing activities likely to result in a “high risk” to data subjects. This is especially necessary for large-scale processing of sensitive data or systematic monitoring of individuals. |
| Data transfers and Standard Contractual Clauses | Help ensure cross-border data flows don’t undermine the level of protection guaranteed by the GDPR. Transfers must rely on adequacy decisions for approved countries or “appropriate safeguards” such as SCCs. |
| Technical and organizational measures | Implement security controls appropriate to the risk, including encryption, pseudonymization, and the ability to ensure the ongoing confidentiality and resilience of systems. Doing so supports a privacy by design approach by integrating safeguards into processing from the start. |
| Third-party risk mitigation | Identifies and addresses potential risks to demonstrate compliance with the GDPR. By documenting these risks and the measures taken to address them, the organization lowers its risk of administrative fines, breaches, and reputational damage. |
| Ongoing monitoring | Maintain GDPR compliance through continuous review, including conducting audits and inspections of vendors. Controllers must regularly test, assess, and evaluate the effectiveness of a vendor’s security measures to help ensure they remain appropriate as risks change. |
Why consent management is central to GDPR third-party risk management
Even when vendors are carefully selected, risk cannot be completely eliminated, and organizations remain accountable for how personal data is processed once it leaves their systems.
If consent is missing, invalid, or no longer applies, any downstream processing by vendors or sub-processors may be unlawful.
“Consent management is the control layer,” explains Eike Paulat. “It helps businesses collect, document, and enforce user choices across third-party data sharing.”
That’s why consent management can’t be treated as a one-time compliance task. To reduce exposure to fines, disputes, and data misuse, you need a structured way to document lawful bases, help ensure vendors process data within the limits of user choices, and demonstrate compliance over time, not just during onboarding.
“With a platform like Usercentrics, consent signals can be consistently applied so third parties only receive data that users have explicitly agreed to share,” says Paulat.
Usercentrics turns consent management into a reliable foundation for GDPR third-party risk management. Our solutions help organizations protect themselves, meet regulatory expectations, and maintain trust as their vendor ecosystem evolves.
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