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Data processing agreements are an essential but often overlooked part of GDPR compliance for businesses. In this definitive guide, we'll break down what a DPA is, how it works, and why businesses need them. To protect your organization’s data assets, get ready for a comprehensive walkthrough of everything you need to know about DPAs! At the end, we'll provide you with a Data Processing agreement template that could make your processing compliant with the EU GDPR, the UK GDPR, the Data Protection Act 2018, and several other data protection laws worldwide. If you process data on behalf of other companies, you certainly need one.
If you’re handling data from others, you need a data processing agreement in place. This legally binding contract establishes the roles and responsibilities of both parties and sets out the terms under which data will be processed.
A data processing agreement is also known as a data processing addendum (DPA), or a data protection agreement (DPA), or a data processing contract (DPC). Regardless of the name, its purpose is to protect both you and your customers by setting out clear expectations regarding the handling of data.
This type of agreement is becoming increasingly common as organizations worldwide scramble to comply with new regulations, such as the EU’s General Data Protection Regulation (GDPR). If you’re processing the personal data of individuals in the European Union, you must have a DPA for the protection of personal data before collecting or receiving that data.
Data processors can be held liable for damages if they breach the terms of a DPA, so it’s important to understand what goes into these agreements. In this definitive guide, we’ll cover everything you need to know about DPAs, including:
Under the GDPR, a data processing agreement is a contract between a data controller and data processor that sets out their respective rights and obligations concerning the nature of the processing activities of the personal data being handled. Similar requirements exist in other comprehensive privacy laws like Nigeria's NDPA 2023. The DPA is intended to give processors some legal certainty and help them comply with their DPA obligations.
DPAs typically address issues such as:
Although not required by law, it is generally advisable for controllers to have a DPA in place with any third-party processors they use. This is because DPAs can help processors understand their data protection obligations and provide some legal certainty in areas with significant potential liability.
The benefits of having a DPA in place include the following:
The GDPR has popularized DPAs, but practically every data protection authority in the world now requires them in one form or another. Wherever a law requires written instructions for data processing, the controller and processor require a DPA.
The following data protection laws require DPAs:
DPAs ensure that all parties involved in the processing of personal data comply with the requirements for protecting personal data. Key clauses in a DPA include:
A DPA should be reviewed and updated periodically to ensure it complies with the GDPR and other applicable laws. Non-compliance will most likely result in penalties and hefty fines.
These key clauses (including, where appropriate, the Standard Contractual Clauses or SCCs) should be included in any DPA to ensure compliance with the relevant data protection acts and to protect such personal data of all parties involved.
The data controller and the data processor must sign a DPA. The GDPR and many other governing laws worldwide require the controller to provide the processor with written instructions on the processing. These instructions usually come in the form of a DPA.
The data controller needs the DPA to provide the processor with such instructions. Without them, the processing violates the laws.
The data processor needs the DPA because it must not process customer personal data without written instructions.
As a result, without a written DPA between them, both parties would be accountable for the infractions.
Suppose your business hires a service provider or partners with a third-party data processor. In that case, a DPA will ensure that you and the data processor you hired will follow the data privacy laws necessary for your customers. A data processor is any business or entity not from your business that collects, stores, and communicates data on your behalf. As a result, a data processing agreement is required.
Check out the elements of a DPA listed above, and ensure they are detailed enough so as not to leave room for interpretation when presented with one.
The controller can be held liable for a data breach, even if it was caused by an error on the part of the processor, in the case of a GDPR data processing agreement. Ensure that the processor has sufficient bandwidth to protect data and organizational measures to respond quickly to any issues that arise.
Data processing companies, especially those who work with data from users from regions that require DPAs, should be familiar with DPAs.
As the data processor, you ensure that applicable data protection laws process all personal data. This includes ensuring that appropriate technical and organizational measures are in place to protect personal data from accidental or unauthorized access, destruction, alteration, or use. You must also ensure that personal data is accurate and up-to-date and that individuals have the right to have their personal data erased or corrected if it is inaccurate. These responsibilities also extend to any such sub-processors you may hire, including any sub-processing activities.
The DPA will also set out your obligations in relation to such transfers of personal data to third countries. Suppose you transfer personal data outside the European Economic Area (EEA). In that case, you must ensure that adequate protections are in place to safeguard individuals' rights and freedoms.
When you’re ready to start drafting your data processing agreement, there are a few key elements you’ll want to make sure to include:
When negotiating a data processing agreement, including any amendments that may come up in the future, there are a few key things to keep in mind. First, you must ensure that the agreement meets all of the requirements of the governing law. Second, you must negotiate favorable terms for yourself and your business. Here are a few tips on how to do both:
When it comes to sensitive personal data, DPAs help ensure that adequate security and privacy safeguards are in place. But what exactly do these agreements need to include to be effective? Here are some key considerations for DPAs when it comes to privacy and security:
Data processing agreement templates are readily available online, such as this EU GDPR data processing agreement template provided by the European Commission.
Now, you can download our free GDPR Data Processing Agreement Template. We want to make creating a DPA as easy as it can get. We have a DPA generator that you can use, but if you want to do it all by yourself, you can download this template and fill it according to the instructions inside.
Data processing agreements are vital, but they're just one piece of the puzzle. For seamless compliance and unwavering data security, you need a comprehensive platform designed with both your business and your customers' privacy in mind. That's where Secure Privacy comes in.
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