July 31, 2023
Table of Contents
Terms and Conditions vs Data Processing Agreement
Terms and Conditions
Terms and Conditions normally outline things like:
The rules you need to follow to access the service
What is the service that will be given
How much you will pay
The liability in case something goes wrong etc…
Data Processing Agreement
A Data Processing Agreement is like the Terms of Service but outlines the rules for two companies sharing personal data, it outlines things like:
What personal data will be shared
Will this data leave the UK or European Economic Area
Which security measures (also called technical and organisational measures) are in place to protect that data transfer
What sub-processors (third parties) will also process the data when the service is being offered
the liability in case something goes wrong
the responsibilities of the controller
the responsibilities of the processor
Other important bits
Article 28 of the GDPR sets out the rules that processors must follow when processing information on behalf of their controllers.
Hotjar - SaaS Example
Hotjar - a popular analytics tool is a snippet of code that you can add to the Website of Company A to capture recordings of how a user uses that website with the objective of optimising it. In this scenario, Hotjar is a processor as it collects website usage data on behalf of Company A (the Controller).
The GDPR says that before Hotjar can start processing the information on behalf of Company A there must be written instructions on what can be done with that data - this agreement is called the Data Processing Agreement.
Accountant - Service Provider Example
Accountants LTD do payroll for Company A. Given that it's Company A that is instructing Accountants LTD to run its payroll, the Accountants are acting as a Processor for Company A which is the Controller. In this situation, a Data Processing Agreement needs to be put in place prior to the data being transferred.
The Standard Contractual Clauses (SCCs) are a set of clauses that need to be added to a Data Processing Agreement when information is being transferred outside of the European Economic Area. These clauses aim to give the data a similar level of security when they are outside of the European Union as when they are inside the European Union subject to the EU GDPR. For International Transfers there are four modules which need to be chosen depending on the relationship between the parties sending the data. You can learn more about this in our blog post here (coming soon).
UK International Data Transfer Agreement/Addendum
The UK International Data Transfer Agreement/Addendum also needs to be appended to your Data Processing Agreement if you are processing data from the UK outside of the UK, EEA or AC. There are two versions of these clauses one of which is an Agreement which needs to be added when data from the UK is transferred outside of the UK, EEA or AC but there are no Standard Contractual Clauses already appended and the Addendum which can be bolted on to the SCCs.
What to do if you're a SaaS?
If you are a SaaS that is processing personal data as part of the service that you offer your clients. It's very likely that you will be processing the information as a Data Processor and will require a Data Processing Agreement.
Data Processing Agreement Checklist
We have established the roles in the DPA (is the sender a controller or processor, is the recipient a controller or processor).
We have linked it to our terms of service agreement.
We have defined the terms or duration of the processing of personal data.
We have decided on our breach notification period.
We have decided whether to include a liability cap or not and if so, added the cap amount.
We have explained the governing law and jurisdiction of the Data Processing Agreement.
We have explained the Data Protection Regulations which apply (UK GDPR, EU GDPR, CCPA, CPRA...).
We have described the services that are related to the processing of personal data.
We have explained the nature and purpose of processing.
We have explained what personal data is going to be transferred.
We have explained who are the individuals whose Personal Data is being transferred.
We have indicated which transfer mechanisms we will be used if the data is being transferred outside of the EEA, UK or AC.
We have explained the Security Measures (Technical and organisational measures) that will protect personal data.
We have explained the sub-processors that we will use alongside the purpose for using them, the country where the data will reside and the sub-processor security measures (or technical and organisational measures).
You have set out the controller obligations
You have set out the processor obligations
You can find a Notion Template (downloadable and exportable to PDF) of the checklist here.
Data Processing Agreement Template
You can find a Data Processing Agreement template here.
How can Privasee help?
Privasee has a Data Processing Agreement and Security Measures module that can help you generate all the Data Processing Agreements that you may need and ensure they include the:
Necessary clauses of a Data Processing Agreement
Evaluate if you need Standard Contractual Clauses
Evaluate if you need the UK International Data Transfer Agreement or Addendum
Help you identify the terms that are most friendly to you
Keep your Data Processing Agreement up to date if anything changes in the legislation (for example complying with deadlines of the recent update to SCCs or the introduction of the requirement to add UK IDTAs)
Keep your Data Processing Agreement up to date if anything changes in your company (you add new features, change the data you use to provide your service or add or remove tools and third parties used in your company)
Note: for simplicity in this article we have not explained the exceptions that apply for professions like Doctors, Lawyers, Accountants (when doing bookkeeping), Financial Advisors and other regulated professions that are likely to act as Independent Controllers and not Processors. We're more than happy to explain the differences via Live Chat though!
Note 2: in this blog post we have considered the most typical use-case for a Data Processing agreement between a Controller and a Processor, but a Data Processing Agreement may be required between a Controller and Processor, from Processor to Processor, from Processor back to the Controller or from an Independent Controller to another Independent Controller.
Alex Franch is the co-founder and CEO of Privasee. With a background in computer science and cybersecurity, it is no surprise that he is a highly analytical problem solver; now putting these skills to use within the data privacy space. Alex is passionate about GDPR, and productivity and spends a lot of time doing sports as he values the importance of having a work-life balance. He is excited to help businesses generate documentation, and become and maintain GDPR compliance through the Privasee platform.
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