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Key Elements of a Data Processing Agreement

Data processing agreements are an important part of GDPR compliance. Here are some basics that you and your team should know.
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Key Elements of a Data Processing Agreement

Almost all businesses rely on outside parties to process customer data. To be GDPR compliant, you need a data processing agreement with any service you use, whether it's an email client, cloud storage provider, or website analytics software.

Compared to earlier EU data legislation, the General Data Protection Regulation treats contracts with more seriousness. You must have a formal data processing agreement in place with each of your data processors if your company is subject to the GDPR. It is one of the most fundamental GDPR compliance actions and is required to avoid fines.

A data processing agreement is a core part of GDPR compliance, especially when partnering with other compliant organizations. In this guide, we’ll walk through a few things that need to be included in a DPA.

What is a DPA?

A data processing agreement, commonly known as a DPA, is a contract that is signed by the parties that will be handling the data: the data controllers and the data processors. It is necessary to fully comply with GDPR.

A DPA specifies the type, function, and timeframe of the processing operations that will be carried out. Additionally, it details the categories of people the data pertains to as well as the type of personal data that will be handled. It outlines the controller's responsibilities and rights. It can describe the application of technological security measures that must be used, like a particular level of encryption. The data controller and processor are required to abide by the DPA's legal obligations or face harsh penalties.

A DPA's primary advantage is that it validates the expertise and dependability of the data processor. Businesses require reassurance that their data is safe, secure, and hidden from prying eyes. A DPA aids in offering those guarantees.

Future corporate operations are anticipated to be significantly impacted by the GDPR and its DPA obligations. As personal data gathering becomes more restricted, communication regarding data collection and storage becomes crucial, and third-party vendor partnerships necessitate more stringent contracts, business transactions may shift. As businesses adjust their operations to meet GDPR rules, the effects on their HR departments will be significant. The benefit of the GDPR rules is that when individuals gain more assurance in the privacy and protection of their data, organizations can grow trust between their customers and the business itself.

The following defined key terms can help you develop your own data processing agreement template for your organization.

Defining Key Terms

GDPR

A legal framework known as the General Data Protection Regulation (GDPR) establishes standards for the gathering and processing of personal data from people living outside of the European Union (EU). The GDPR was approved in 2016 and fully implemented two years later. By making businesses accountable for how they handle and treat this information, it aims to offer customers control over their own personal data. The rule is applicable regardless of where websites are located, therefore all websites that draw users from Europe must abide by it, even if they don't directly target EU citizens when marketing products or services.

Data Processor

A data processor is a person or business that handles data processing tasks for a controller under the controller's direction. It is a contractor in the world of outsourcing, but a data processor can be a vendor or any third party that processes data. A DPA is required by the data processor because it is forbidden from processing personal data without a documented request. As a result, if the data processor and data controller did not have a documented DPA, both would be responsible for the violations.

Data Controller

The entity that establishes the terms for data processing is known as the data controller. In terms of software development and similar niches, this would be the client.

The controller must give the processor explicit instructions for the processing in accordance with the GDPR and many other international data protection laws. These guidelines typically take the form of a DPA. Because it is required to give such instructions to the processor, the data controller needs the DPA. Without them, processing would be illegal.

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When Do You Need to Sign a DPA?

Every time an organization uses a third party to handle data on EU citizens, they must sign a GDPR data processing agreement. A DPA can nonetheless be helpful for organizations that do not deal with EU user data to outline the terms of their contracts with outside data processors. It may seem like just more paperwork, but DPAs are actually quite handy for businesses.

What Needs to be Included in a DPA?

Clearly state the sort of Personally Identifiable Information you will be handling, as well as the reasons for processing it. If extra information is required, you might provide a reference to the agreement's appendix in this sentence. The important thing is to be explicit about the kind of information you will be processing and nothing more. Avoid using broad, overly general words.

If you are the provider or processor in this particular agreement, be sure to clearly state your responsibilities, including how you will respond to deletion requests, what to do in the event of a breach, and any other conditions. Additionally, you should make it clear that anyone working for you to provide services to your customer is also liable for the obligations set forth in the DPA. This includes both employees and independent contractors.

Additionally crucial is the DPA's security piece. The security criteria you must meet are outlined in this section and include administrative, physical, and technical security measures. The possession of a third-party security certification may also be requested or required by enterprise clients. This section should also specify your rules for reporting security breaches and the necessary corrective actions, such as the need to obtain access to pertinent data.

The subcontractor and vendor section of a DPA is also crucial since your customer may insist that you only let a third-party subcontractor or vendor process PII if they have also signed a DPA. This means that you should sign DPAs that are at least as stringent as the ones you are signing with your customers if you have a subcontractor or vendor who handles the personally identifiable information of your customers. Data privacy and information security entail a chain of liability, which means you may be held liable and subject to legal action if one of your providers experiences a data breach and that breach impacts the data of your customers.

Numerous data privacy laws have outlined the strict rights that data subjects have as well as the appropriate course of action in the event of a request. These specifications are laid forth in the Data Subject Rights section, along with what is expected of you in the event that a data subject request is received. This may involve giving your customer notice and adhering to a rigid and detailed policy when giving data subjects what they request.

It would also be wise to include information about cross-border transfers outside of the EU, industry requirements, terms, data destruction, records, and audits in your DPA.

Conclusion

Data Processing Agreements are highly critical documents between data processors and controllers. It is extremely important to ensure that you review your contracts carefully and have covered all the needed bases before it is signed by both parties. If you have any questions about how Accountable can help you reach compliance and take the stress out of DPA creation and completion, reach out to us today!

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