Have you ever wondered how your favourite online stores, streaming services, or health apps keep your personal data safe while using third-party services to deliver their features?
It’s something that often goes unnoticed, but it’s super important.
Think about when you use a ride-sharing app like Uber or Ola. Your location data, payment information, and ride history might be managed by different entities to ensure you have a seamless experience.
And what about social media platforms that allow you to log in to other websites using your social media credentials?
Have you ever thought about how these apps make sure that your sensitive information stays protected?
This is where Data Processing Agreements (DPAs) come into play.
A Data Processing Agreement is crucial whenever a data controller engages a data processor to handle personal data on its behalf.
Without a DPA, you may face penalties of millions of dollars/euros or crores of rupees.
In 2022 alone, data breaches exposed over 22 billion records worldwide! And the consequences were severe.
Under GDPR and DPDPA, a controller must enter into an agreement with the processor if it wishes to engage it to process personal data further.
Let’s break it down:
Data Controllers are the entities that decide the “why” and “how”—the purpose and the means of processing your personal data. In the examples we’ve mentioned, Data Controllers include online stores, ride-sharing apps, social media platforms, etc.
Data Processors are the entities that process data on behalf of the data controller. They handle the data according to the controller’s instructions. In our examples, these entities include payment service gateways, cloud service providers, customer support services, etc.
A DPA establishes the roles and responsibilities of both parties and sets out the terms under which data will be processed.
Here’s where you- a Privacy Manager come in.
You’re the person ensuring that these data transfers are smooth, compliant, and secure.
Your job involves drafting, negotiating, and reviewing these DPAs to protect personal data and ensure compliance with data protection laws.
There are plenty of scenarios where a DPA is not just a good idea but an absolute necessity. Let’s look at a few:
Outsourcing IT Services: If a company hires an IT service provider to manage its data infrastructure, a DPA is required to ensure the service provider processes data in compliance with data protection laws.
Marketing Services: When a company uses an external marketing agency to handle email campaigns or customer data analytics, a DPA is essential to outline the responsibilities of each party.
Cloud Services: If a company uses cloud storage or computing services to store personal data, a DPA must be in place to govern how the cloud provider processes and protects that data.
Customer Support: Companies often outsource customer support functions to third-party providers. A DPA ensures that these providers handle personal data according to legal requirements.
The market is huge!
Are you interested in learning how to draft DPAs?
Here is a video by our expert, Pooja Luktuke, where she has explained important clauses and points to remember for drafting an effective and detailed DPA.