Data processor

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A data processor is a person, company, public authority or other body that processes personal data on behalf of a data controller, following the controller’s documented instructions rather than deciding the purposes of the processing itself. In privacy and data protection law, most prominently the GDPR, the processor is the party that carries out the work, while the controller decides why and how personal data is used.

Typical data processors include cloud hosting providers, payroll services, email delivery platforms, customer support outsourcers and analytics vendors. The role is defined by what an organization actually does with the data in a specific relationship, not by its size, its contract title or how it describes itself.

How the data processor role is determined

The data processor role is determined by who decides the purposes and essential means of processing. Under Article 4(8) of the GDPR, a processor processes personal data on behalf of the controller; under Article 4(7), the controller is the party that determines the purposes and means. The assessment is factual and relationship-specific.

A processor may still make non-essential decisions about means, such as which servers, software or security tools to use, as long as it does not decide essential means, such as which data is collected, for how long it is kept and who receives it. A processor that starts using the data for its own goals, for example to train its own products without a legal basis, becomes a controller for that processing under Article 28(10).

The following questions help classify a relationship.

QuestionPoints to processorPoints to controller
Who decides the purpose?The client organizationThe organization itself
Who decides which data is collected?The clientThe organization itself
Can it use the data for its own goals?No, only per instructionsYes, within its own legal basis
Does it have a direct relationship with individuals?Usually notOften yes
Who answers data subject requests?Assists the clientResponds directly
Indicators for classifying a data processing role

Obligations of a data processor

A data processor has its own direct legal obligations under the GDPR, in addition to those set out in its contract. This was a significant change from earlier European data protection law, under which processors were bound mainly through contracts with controllers.

ObligationGDPR articleWhat it requires
Act only on instructionsArticles 28 and 29Process data only as documented by the controller
Security of processingArticle 32Appropriate technical and organizational measures
Records of processingArticle 30(2)Register of processing done for each controller
Breach notificationArticle 33(2)Notify the controller without undue delay
Sub-processor controlArticle 28(2) and 28(4)Use sub-processors only with authorization and equal terms
International transfersChapter VLawful transfer mechanism outside the EEA
Data protection officerArticle 37Appoint one where the legal criteria apply
Key GDPR obligations that apply directly to processors

Processors can be fined by supervisory authorities and held liable to individuals for damage, but under Article 82 a processor is liable only where it breached obligations aimed at processors or acted outside or against lawful instructions.

The data processing agreement

Article 28(3) of the GDPR requires a binding contract or other legal act, usually called a data processing agreement (DPA), between controller and processor. It sets out the subject matter, duration, nature and purpose of processing, the types of personal data and the categories of data subjects.

  • Documented instructions, including on international transfers.
  • Confidentiality commitments for everyone authorized to process the data.
  • Security measures consistent with Article 32.
  • Rules for sub-processors, either specific or general written authorization.
  • Assistance with data subject rights, breaches and impact assessments.
  • Deletion or return of data at the end of the service.
  • Audit and information rights for the controller.

The European Commission has also adopted standard contractual clauses for controller-processor relationships, which organizations can use to satisfy Article 28 requirements without drafting every clause themselves.

The data processor sits within a set of roles that together describe responsibility in privacy fundamentals. Confusing them leads to wrong contracts, missing notices and unclear liability.

RoleDecides purposesTypical example
Data controllerYesA retailer running its customer database
Joint controllersYes, togetherTwo organizations running a shared campaign
Data processorNoA hosting provider storing the retailer’s data
Sub-processorNoA data center used by the hosting provider
Independent controller recipientYes, for its own useA bank receiving payment data
Data processor and neighboring roles

Outside Europe, similar roles exist under different names. California law uses service provider and contractor, and several other privacy laws use the term processor with comparable meaning, although the exact obligations differ by jurisdiction.

Common mistakes with data processors

The most frequent error is assuming that a vendor is a processor simply because it provides a technical service. Many advertising, analytics and social media tools use data for their own purposes as well, which makes them controllers or joint controllers for at least part of the processing.

  • Missing DPAs with small vendors such as form builders or chat widgets.
  • Unreviewed sub-processor lists that change without notice to the controller.
  • Instructions left vague, so the processor effectively decides retention and use.
  • Data minimization ignored when sending vendors more data than the service needs.

A non-technical view

A data processor is a company that handles personal information for someone else, following that organization’s instructions. The organization that decides what happens to the data is the controller. The processor simply does the agreed work.

Think of an accountant hired by a small business. The accountant works with the business’s records but does not use them for personal projects. The business decides what needs to be done, and the accountant follows those decisions and keeps the records safe.

A concrete example

An online clothing store uses an external email delivery platform to send order confirmations and newsletters. The store decides which customers receive which emails and for how long their addresses are kept. The email platform stores the addresses and sends the messages, so it acts as a data processor.

The store signs a data processing agreement that limits the platform to sending the store’s emails, lists its sub-processors and requires breach notification without undue delay. When the platform later announces a new feature that would use customer engagement data to improve its own benchmarking product, the store’s privacy lead recognizes that this would make the platform a controller for that use. The store opts out, keeping the relationship within the agreed instructions.