Due Diligence

The comprehensive assessment and investigation conducted to evaluate risks, verify information, and ensure compliance before entering business relationships, making investments, or implementing new practices. In privacy contexts, due diligence is essential when selecting vendors, acquiring companies, entering partnerships, or implementing new technologies that process personal data. Privacy due diligence examines data practices, security measures, compliance programs, past violations, contractual terms, technical capabilities, breach history, and regulatory relationships. Questions to ask include: What data will be accessed? How will it be secured? Is the vendor compliant with applicable laws? What happens to data if the relationship ends? Due diligence should be risk-based—higher-risk relationships warrant more thorough investigation. Organizations should document due diligence processes, maintain records of findings, address identified issues before finalizing relationships, and conduct periodic re-assessment of ongoing relationships. Proper due diligence prevents privacy problems and demonstrates accountability.