Vendor vs Subprocessor vs Third-Party Supplier

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Vendor vs Subprocessor vs Third-Party Supplier article talks about the difference between the three.

Overview

These three terms are often used interchangeably but are different. Highlighting the differences is necessary, especially for customers tailoring their processing agreements or preparing for GDPR.

Overall, in the context of business, vendors, third-party suppliers, and subprocessors are all entities that provide goods and services to another company. Now, let’s learn more about some key differences among them.

Vendors

In general, vendors are typically third-party organizations and are often associated with technology or software. But they can provide a wide range of products or services, including office supplies, furniture, raw materials, and consulting services.

Vendors are often used to procure goods or services that are necessary for the operation of the organization but are not directly involved in the production or delivery of the organization’s products or services.

For example, a vendor may provide cloud hosting services, software tools, or consulting services to an organization (or data controller in the GDPR context). While the vendor may have access to personal data in order to provide these services, it does not process the data on behalf of the organization that uses them.

Third-Party Suppliers

A third-party supplier is an organization or individual that is typically involved in the production or delivery of the purchasing organization’s products or services.

Suppliers are often associated with manufacturing or production, but they can provide a wide range of products or services, including raw materials, equipment, components, or sub-assemblies that are used in the production of the final product, or they may provide services such as logistics, warehousing, or transportation.

Subprocessors

A subprocessor is a third-party organization that processes personal data on behalf of an organization (or data controller in the GDPR context) and is typically engaged by a vendor. For example, if an organization (the data controller) uses a cloud hosting vendor to store personal data, the vendor may engage a subprocessor to provide backup or database management services. The subprocessor would then process the personal data on behalf of the vendor and, by extension, on behalf of the organization or data controller.

Summary

To recap:

  • Vendors are organizations that provide services or products. Vendors are involved in the operation of an organization as opposed to the production and delivery aspects. Vendors may store and transmit data, but they do not process it on behalf of the organization.
  • Third-party suppliers are companies or individuals that are directly involved with the production or delivery of products or services.
  • Subprocessors, specifically, process personal data on behalf of the organization.
  • Vendor vs Subprocessor vs Third-Party Supplier terms are often used interchangeably but are different..

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