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Need help with a Data Processing Agreement?
Data processing agreements are critical to running a legally compliant business in a digitally encrypted world. Passed in the European Union in 2016, the General Data Protection Regulation (GDPR) set a new tone when it comes to protecting consumer data and privacy throughout the world. These laws continue to span reach throughout the world as other countries and states enact separate laws and requirements.
You need data processing agreements for consumers if you:
- Have a website
- Collect customer data
- Make sales online
As you can see, these rules affect a large majority of the world. Learn everything you need to know about data processing agreements by continuing the article below.
What is a Data Processing Agreement?
A data processing agreement, also called a DPA, is a legal contract between a data controller and a data processor. They regulate the use of consumer data by companies, specifically how it is processed. In essense, the data processor promises to utilize personally identifiable data (PII) according to the terms laid out in the data processing agreement.
If your website collects data from people living in locations with these rules, then your website processing agreements and data processing methods must be compliant with them.
Common types of company websites that should have data processing agreements include:
- Online retailers
- Internet marketers
- Online service providers
- Professional services firms
- B2B companies
- Financial institutions
- Technology firms
- Medical providers
If you run a large company, you will need to hire a data protection officer (DPO) to oversee and enforce your data privacy policies and data processing agreements. The internet is rife with the opportunity to expose your customer’s data, which can land your company in legal trouble with local authorities.
Avoid making this mistake by writing a personalized data processing agreement for your company while having the appropriate safeguards in place to monitor compliance.
Here is an article about data protection officers (DPO).
Key Terms in a Data Processing Agreement
Data processing agreements, like all contracts, contain key terms and provisions that help both parties understand their rights and responsibilities. In the case of a data processing agreement, the consumer, or the data control, must agree to the company’s or data processor’s terms to use their website or application.
The key terms in a data processing agreement include:
- Subject matter
- Data used
- Data categorizations
- Rights and obligations
- Rights if a data breach occurs
These rights and obligations may vary according to state, industry, country, and company type. When there are numerous variables involved with a contract, it is essential that you consult with privacy lawyers to help ensure that they are objective-oriented, compliant, and enforceable. Otherwise, you could leave yourself exposed to fiduciary liabilities in the future.
Why You Need A Data Processing Agreement
Your company needs a data processing agreement to remain compliant with a jurisdiction’s relevant laws. If you do not have these agreements in place and utilize consumer data, you could face significant penalties. While legislation is forthcoming slowly, a few noticeable places are enacting strict measurements.
DPAs and the GDPR
The General Data Protection Regulation (GDPR) summaries how companies must process, store, and use customer data. These regulations are contained within Article 28 of the GDPR text enacted by the European Union (EU).
Counties in the EU include:
- Republic of Cyprus
- Czech Republic
Regardless of where your target audience resides in the EU, DPAs are an essential website component across many business types and industries. Data controllers also have specific legal protections.
Ensure that your data processing agreement addresses the following rights:
- Right to opt-out
- Right to be informed
- Right to disclosure
- Right to deletion
- Right to equal services and prices
Lawmakers have authorized the Data Protect Authorities to impose fines of up to €20 million or 4 percent of global turnover annually, whichever of the two is greater, for GDPR violations. Work with a team of legal and technological professionals to help you create an agreement and process that helps you accomplish your company objectives while remaining compliant within the EU.
DPAs and the CCPA
On the other hand, the California Consumer Privacy Act (CCPA) is the state’s ePrivacy directive that outlines how companies can use consumer data, including tracking browsers and data encryption requirements. These rules apply to first and third-party services providers and retailers.
Data Processing Agreements and Small Businesses
Small business owners stretch their budgets and may wonder if having data processing agreements are really necessary. They are generally not exempt from meeting data processing agreement requirements. However, some geographical regions may have more lax regulations in your area.
Other Reasons to Not Use Data Processing Agreements
You also do not need to have a data processing agreement if your target market is not located in a place with such requirements. Always speak with internet lawyers in your state to determine if your small business needs to utilize data processing agreements.
Why You Should Get Started Early
We will likely see continued legislation crop up throughout the United States and the world. It may not be a bad idea to get a jump on the practice now while observing good data processing ethics. Your early adopter and tech-savvy customers are sure to take note of your above-and-beyond efforts.
Image via Pexels by Soumil Kumar
Writing A Data Processing Agreement
It’s essential that you write a data processing agreement that serves its intended purposes. However, the terms and conditions you write must also remain compliant with local, state, federal, country, and industry requirements depending upon your business. Use a methodical approach to ensure that you obtain the desired result.
Follow these steps when writing a data processing agreement:
- Step 1. Determine what customer data is essential
- Step 2. Decide upon how long you need to store/process the data
- Step 3. Write down how you plan to use the data in your own words
- Step 4. Finalize this information with key company stakeholders
- Step 5. Schedule an initial intake with a privacy lawyer
- Step 6. Work with the lawyer you hired to finalize the policy
Get Help with a DPA
Online agreements, like Data Processing Agreements, are best left to experts that understand the way browsers, software, and online marketing works, as well as being familiar with global data privacy laws. Post a project on ContractsCounsel’s marketplace to get bids from vetted technology lawyers that can help.
Meet some of our Data Processing Agreement Lawyers
Seasoned technology lawyer with 22+ years of experience working with the hottest start-ups through IPO and Fortune 50. My focus is primarily technology transactions with an emphasis on SaaS and Privacy, but I also provide GC services for more active clients.
I am a California-barred attorney specializing in business contracting needs. My areas of expertise include contract law, corporate formation, employment law, including independent contractor compliance, regulatory compliance and licensing, and general corporate law. I truly enjoy getting to know my clients, whether they are big businesses, small start-ups looking to launch, or individuals needing legal guidance. Some of my recent projects include: -drafting business purchase and sale agreements -drafting independent contractor agreements -creating influencer agreements -creating compliance policies and procedures for businesses in highly regulated industries -drafting service contracts -advising on CA legality of hiring gig workers including effects of Prop 22 and AB5 -forming LLCs -drafting terms of service and privacy policies -reviewing employment contracts I received my JD from UCLA School of Law and have been practicing for over five years in this area. I’m an avid reader and writer and believe those skills have served me well in my practice. I also complete continuing education courses regularly to ensure I am up-to-date on best practices for my clients. I pride myself on providing useful and accurate legal advice without complex and confusing jargon. I look forward to learning about your specific needs and helping you to accomplish your goals. Please reach out to learn more about my process and see if we are a good fit!
I am a NY licensed attorney experienced in business contracts, agreements, waivers and more, corporate law, and trademark registration. My office is a sole member Law firm therefore, I Take pride in giving every client my direct attention and focus. I focus on getting the job done fast while maintaining high standards.
A twenty-five year attorney and certified mediator native to the Birmingham, Alabama area.
Longtime corporate real estate counsel with specialities in commercial leasing, contracts, corporate governance, and general small business/startup/entrepreneurship legal issues.
I absolutely love helping my clients buy their first home, sell their starters, upgrade to their next big adventure, or transition to their next phase of life. The confidence my clients have going into a transaction and through the whole process is one of the most rewarding aspects of practicing this type of law. My very first class in law school was property law, and let me tell you, this was like nothing I’d ever experienced. I remember vividly cracking open that big red book and staring at the pages not having the faintest idea what I was actually reading. Despite those initial scary moments, I grew to love property law. My obsession with real estate law was solidified when I was working in Virginia at a law firm outside DC. I ran the settlement (escrow) department and learned the ins and outs of transactions and the unique needs of the parties. My husband and I bought our first home in Virginia in 2012 and despite being an attorney, there was so much we didn’t know, especially when it came to our HOA and our mortgage. Our real estate agent was a wonderful resource for finding our home and negotiating some of the key terms, but there was something missing in the process. I’ve spent the last 10 years helping those who were in the same situation we were in better understand the process.
Samantha has focused her career on developing and implementing customized compliance programs for SEC, CFTC, and FINRA regulated organizations. She has worked with over 100 investment advisers, alternative asset managers (private equity funds, hedge funds, real estate funds, venture capital funds, etc.), and broker-dealers, with assets under management ranging from several hundred million to several billion dollars. Samantha has held roles such as Chief Compliance Officer and Interim Chief Compliance Officer for SEC-registered investment advisory firms, “Of Counsel” for law firms, and has worked for various securities compliance consulting firms. Samantha founded Coast to Coast Compliance to make a meaningful impact on clients’ businesses overall, by enhancing or otherwise creating an exceptional and customized compliance program and cultivating a strong culture of compliance. Coast to Coast Compliance provides proactive, comprehensive, and independent compliance solutions, focusing primarily on project-based deliverables and various ongoing compliance pain points for investment advisers, broker-dealers, and other financial services firms.