What is Data Processing Agreement & Why? 

Business operations mostly rely on data processing. As cloud-based services and outsourcing are common these days, it’s crucial for companies to understand what data controllers and data processors should do and what kind of legal agreement should be between them. Typically, it is known as a Data Processing Agreement (DPA). 

So here, this article will focus on the roles and responsibilities of data controllers and data processors. You can also understand their roles through real-life examples. Upon reading, you’ll find how important it is to have a DPA, especially when the European data protection regulation (GDPR) is there and every business entity has to comply with it. It’s a must to abide by its terms & conditions if you really want to get rid of penalties or fines. Certainly, no one in the corporate community would appreciate a fine of up to €20 million or up to 4% of the annual global turnover of the preceding fiscal year, whichever is higher.

Let’s find out the role of data controllers and processors together with how to manage personal records for eliminating legal actions. 

Role of a Data Controller 

The data controller appears in a crucial role. His responsibility is to determine the purpose and means of processing personal data. Alongside, ensure that the personal information is processed in accordance with GDPR compliance. It is noteworthy that this is a data compliance regulation, which is formed to safeguard the personal information of data subjects. So, it’s his/her responsibility to obtain valid consent from data subjects before using it. Lawful processing is encouraged, which is trailed when the data subjects give consent to access their personal information. 

In the later stage, this role provides guidance, support, and instructions to the data controller about meeting obligations. 

Role of a Data Processor

The data processor is supposed to carry out processing under the guidance of the controller. Under the supervision of controller, he/she takes appropriate technical and organisational measures to prevent the theft of sensitive datasets. Also, informing the controller about any breaching attempt and helping him/her to undo its effect also define his/her role. 

Simply put, data processors and controllers work hand in hand to comply with GDPR. 

It is necessary to bind them in an agreement for a smooth discharge of their duties or responsibilities. Additionally, this agreement outlines their individual roles and responsibilities like a mirror. It legally binds them to follow their roles religiously. 

When Do You Need a Data Processing Agreement (DPA)? 

As aforesaid, it’s a contract between the controller and the processor of data.  However, the service providers typically offer their data processing agreement template. But, it’s a must to check whether all legal requirements are met. It is necessary to have this kind of agreement in some situations. These situations can be any of these: 

  • When using or providing cloud services
  • When hiring an IT service provider to maintain IT systems 
  • When providing technical support
  • When managing email marketing campaigns
  • When running targeted advertising through a marketing service provider
  • When you outsource data processing for payroll management, benefits, or other HR functions to an HR service provider
  • Or, when using the services of an analytics service provider

What Should Be Mentioned in a DPA?

It should cover a detailed overview of key aspects, such as the type, duration, and purpose of personal data processing. Besides, it should clearly state what security measures are likely to be in place, and what the authority of the data processor would be. Also, it clearly states the process of handling data breaches, data auditing, or such rights of the data controller. The whole sole aim of this document is to ensure that the company or organisation is in compliance with GDPR.

Best Practices to Ensure Lawful Data Processing 

Here is the roundup of the processing operations that you can introduce or follow in your own organisation. 

  • Clearly mention for which purpose the data are being processed and how long the processing will go on. 
  • Clearly define or describe the types of personal data being processed, why it is being processed, and also, provide instructions for processing the data.
  • Identify, segment, and do profiling of all categories of individuals whose personal data are being processed.
  • Present an overview of the technical and organisational measures that are likely to be executed for the security of personal information.
  • Underline the subprocessors, if there are any, and also, make the subprocessors as being subject to the same obligations as the data processor.
  • Highlight the provisions for vulnerability (like hacking) and also, make it a must for the data processor to notify the data controller about any personal data hacking.
  • Underline the assistive role of the data processor, which is to stand with the data controller in order to meet the data subjects’ rights under the GDPR.
  • Outline the criteria and standards for the controller to audit, monitor, or examine the data processor’s activities. 
  • Mention the conditions or situations in which the contract can be nullified or ended, and may also require the data processor to delete or return personal details to the data controller after it. 


A Data Processing Agreement (DPA) is a legal contract between two parties that governs how one party processes the other’s personal data. It is essential for ensuring compliance with data protection regulations and protecting individuals’ privacy rights by the data controller and processor.