Data processing and DPA contracts: Your guide to GDPR compliance

The processing of personal data is now an integral part of many business processes. For SaaS companies, freelancers and web design agencies, compliance with the General Data Protection Regulation (GDPR) is of central importance. A key aspect of this is the correct handling of commissioned data processing and the associated DP contracts. This guide provides you with essential information and practical tips on how to design GDPR-compliant business processes and minimize legal risks.

What is commissioned data processing in the context of the GDPR?

Contract data processing (CDP) is a central concept of the General Data Protection Regulation (GDPR) and refers to the processing of personal data by a contractor on behalf of and under the instructions of a controller. This model is of great importance in the digitalized business world, as many companies use external service providers for various data processing activities.

Under the DPA, the client (the controller) remains fully responsible for compliance with data protection regulations. It must ensure that the contractor (the processor) takes all necessary technical and organizational measures to guarantee the protection of personal data. This responsibility makes the careful selection and contractual commitment of processors a critical task for any data protection-conscious company.

When does commissioned data processing exist?

Contract data processing is given if certain criteria are met. Firstly, a company or organization (the client) must have personal data processed by another company (the contractor or subprocessor). The decisive factor here is that the contractor processes this data exclusively in accordance with the client's detailed instructions. The client retains full control over the data processing and determines the purpose and means of processing.

A typical example of commissioned data processing is the use of a cloud storage service. Here, a company stores its customer data on the cloud provider's servers, but gives precise instructions on how to handle this data. The cloud provider may not use the data for its own purposes or decide on its use independently.

When is there no commissioned data processing?

There are situations in which, despite the involvement of external service providers, there is no commissioned data processing within the meaning of the GDPR. This is the case if the service provider decides independently on the purposes and means of data processing. An example of this would be a tax consultant who works for his client. Although he processes personal data, he does so on the basis of his own professional expertise and not exclusively in accordance with the client's instructions.

Even in the case of cooperation between companies on an equal footing, where both parties jointly decide on the purposes and means of data processing, there is no commissioned data processing. In such cases, one tends to speak of joint responsibility.

Nor does the transfer of data to authorities or other public bodies fall within the scope of commissioned data processing, as this takes place due to legal obligations and is not based on a contractual agreement.

What is a DPA contract in the context of the GDPR?

A data processing agreement, i.e. an order processing contract, is a key instrument for regulating order data processing within the meaning of the GDPR. This contract is a legally binding agreement between the controller (client) and the processor (contractor). It precisely defines the rights and obligations of both parties when processing personal data and thus ensures compliance with the strict GDPR requirements.

The DPA contract goes far beyond a mere formality. It forms the foundation for legally compliant and transparent cooperation in the area of data processing. By defining responsibilities, technical and organizational measures and control rights in detail, it creates clarity and security for all parties involved. It also serves as proof to supervisory authorities that both parties are fulfilling their duty of care when handling personal data.

Why do I need an DPA contract?

There are several important reasons why a DPA is necessary:

First of all, the conclusion of such a contract is a legal obligation enshrined in the GDPR. Companies that have personal data processed by third parties must comply with this obligation in order to act in accordance with the law.

In addition, a DP contract offers a high degree of legal certainty. It clarifies responsibilities and liability issues, which can be invaluable in the event of data breaches or disputes. By clearly assigning duties and rights, both parties know exactly what is expected of them and how to proceed in the event of an emergency.

Another crucial aspect is data protection itself. The DPA contract specifies the security measures that the processor must implement to ensure the protection of the data entrusted to it. This contributes significantly to minimizing the risk of data breaches and preserving the integrity of personal data.

Last but not least, the DPA is an important instrument for building trust. At a time when data protection is of paramount importance to many consumers and business partners, the conclusion of such a contract signals that your company takes data protection seriously and takes proactive measures to protect the rights and freedoms of data subjects.

When do I need an DPA contract?

In principle, such a contract is always required if you as a company or freelancer have personal data processed by third parties. This can be the case in many different business situations, often in areas that are not obviously associated with data processing at first glance.

To better illustrate the need for a DP agreement, here are some specific examples:

These examples illustrate how ubiquitous the need for DPAs is. It is important to carefully review all business processes and identify where personal data is processed by third parties to ensure that DPAs are in place in all relevant cases.

Are service providers abroad relevant for the DPA contract?

The short answer is: Yes, a DPA is also necessary when working with foreign service providers. The GDPR makes no distinction between domestic and foreign processors as long as the data processing is carried out on behalf of a controller based in the EU.

However, cooperation with foreign service providers requires special attention, especially if they are companies outside the European Union or the European Economic Area. In these cases, additional protective measures must be taken to ensure an adequate level of data protection.

The GDPR provides for special mechanisms for data transfers to third countries, i.e. countries outside the EU/EEA:

It is important to emphasize that the responsibility for compliance with the GDPR provisions remains with the client, even when working with foreign service providers. It is therefore advisable to carefully examine the selection of foreign service providers and, if necessary, to seek legal advice in order to implement all necessary protective measures.

Which points should be included in a DPA?

A GDPR-compliant DPA must cover a number of essential points in order to clearly define the rights and obligations of both parties and ensure the protection of personal data. Here are the essential elements that should not be missing from any DPA:

What are the possible consequences of not offering an DPA contract?

The lack of an DPA contract can have serious consequences for your company. Here are some of the possible consequences:

Can I use a template for the DPA contract and where can I get one?

Yes, you can certainly use sample templates for DPA contracts. In fact, this is recommended, as professionally created templates ensure that all the necessary points are covered. However, it is important to note that each template needs to be customized to your specific situation.

Where to find reliable DPA contract templates:

Are you ready to take your DPA contract management to the next level?

Try dpaBase permanently free of charge for up to 50 DPA contracts as soon as it is available!

Any questions? Get in touch with us!

Send an Email