Everything you need to know about a Data Processing Agreement

What is a DPA?

A data processing agreement (DPA) is a legally binding document to be entered into between the controller and the processor in writing or in electronic form. It regulates the particularities of data processing – such as its scope and purpose – as well as the relationship between the controller and the processor.

Why is a DPA important?

The GDPR requires data controllers to take measures to ensure the protection of personal data they handle. If data controllers decide to outsource certain data processing activities, they must be able to demonstrate that their suppliers and sub-processors also provide sufficient guarantees to protect the data and act in a GDPR compliant manner.

When do you need to sign a DPA? 

If you are a controller and, as a result of outsourcing, you wish to transfer your data to a third-party, for example a cloud provider, you need to sign a DPA with that third party.

Do processors have to sign a DPA with their sub-processors?

Yes, even if you are not a controller, but a processor, and decide to outsource your activities you’ll need to sign a DPA and ensure that any other sub-processor in the chain complies with the requirements of the GDPR.

What is data processing?

The GDPR regulates data processing in a broad manner. It says that any operation performed on personal data amounts to processing. For example, the acts of collecting, storing, disclosing or erasing personal data are all considered processing and fall under the GDPR.

Who is a data controller?

Data controller is the person who determines the purpose and means of the data processing.

Who is a data processor?

The person who processes data on behalf of a controller, in accordance with the controller’s instructions.

What to watch out for when signing a DPA?

One of the most important element of a DPA is whether your processors provide sufficient guarantees for the protection of the data transferred to them. Under the GDPR, if there is a data breach, even if it’s on the side of the processor, you, as a controller, might be held responsible. Hence, it is important to choose processors that implement sufficient measures to minimize the risk of a data breach. Furthermore, processors should also take sufficient measures to decrease the effect of a breach and to inform you in due course.

 Data processors should not be able to process your data for any other purpose than what’s the purpose of your DPA and of the outsourcing. Accordingly, you should check how the processor will use the data you transfer to it; whether it is in accordance with your contract or whether the processor intends to use the data for its own purposes. Hence, you need to make sure that the scope of the processor’s DPA is not broader than the original legal basis you have for processing the personal data.