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Data Privacy

The Difference Between Data Controllers and Data Processors

Sam Noss, July 25, 2023

Data is arguably the world’s most valuable resource. This means the accurate management and protection of data is crucial for organizational success. 

When it comes to handling personal data, two different roles come into play: Data controllers and data processors. While these terms are often used interchangeably, they have distinct responsibilities and legal obligations relating to data privacy

To shed light on the differences between data controllers and data processors, let’s look at some examples and insights into their roles, and the legal frameworks governing them.

What Is a Data Controller?

A data controller is a service provider or organization determining the purposes and means of processing personal data. In simpler terms, a data controller decides why and how personal data collection, storage, and use occurs. They have the ultimate responsibility of ensuring data processing activities comply with applicable privacy laws and regulations. Data controllers bear the legal obligations associated with data protection, including providing transparency, obtaining consent, and safeguarding the personal data of data subjects.

What Are the Data Controller’s Responsibilities?

The responsibilities of a data controller are extensive and critical in ensuring the lawful and ethical handling of personal data. Some key responsibilities data controllers bear:

  1. Determining the Purpose and Means of Processing: Data controllers have the primary responsibility of defining the purpose for personal data collection and processing. They must clearly establish the legal basis for data processing and ensure it aligns with the rights and expectations of the individuals whose data is being processed, or data subjects. Data controllers must determine the appropriate means and methods of processing, taking into account data privacy and protection principles.
  2. Obtaining Consent: In many cases, data controllers are required to obtain valid consent from individuals before processing their personal data. This involves providing clear and concise information about the purpose of processing, the types of data involved, and any potential third-party recipients. Data controllers must ensure consent is freely given, specific, informed, and can be easily withdrawn.
  3. Ensuring Data Security: Data controllers bear the responsibility of implementing appropriate security measures to protect the personal data they collect and process. This includes safeguards against unauthorized access, loss, destruction, alteration, or disclosure of personal data. Measures like encryption, access controls, and regular security assessments are crucial for maintaining data confidentiality, integrity, and availability.
  4. Providing Transparency and Privacy Notices: Data controllers must provide individuals with transparent and easily accessible information about organizational data processing practices. Privacy notices or policies should outline the types of personal data collected, the purposes of processing, data retention periods, and any third parties involved. By providing clear information, data controllers empower data subjects to make informed decisions about their data and exercise their privacy rights.
  5. Facilitating Individual Rights: Data controllers must enable individuals to exercise their rights regarding their personal data. This includes the right to access, rectify, erase, restrict processing, and object to processing. Data controllers must have processes in place to handle privacy requests promptly and efficiently, ensuring that individuals can assert their rights and maintain control over their data.
  6. Conducting Data Protection Impact Assessments (DPIAs): In situations where data processing is likely to result in high risks to individual rights and freedoms, data controllers must conduct DPIAs. These assessments help identify and mitigate potential privacy risks by evaluating the necessity, proportionality, and impact of the processing activities. DPIAs allow data controllers to implement appropriate measures to protect individuals’ data and comply with legal requirements.
  7. Establishing Data Processing Agreements: When engaging data processors to handle personal data on their behalf, data controllers must establish clear and comprehensive data processing agreements. These agreements outline the specific instructions, security obligations, and data protection requirements that the data processor must adhere to. By establishing these contracts, data controllers ensure that processors handle personal data in compliance with applicable laws and regulations.

Data controllers play a crucial role in overseeing the lawful and responsible processing of personal data. Their responsibilities encompass determining the purpose and means of processing, obtaining consent, ensuring data security, providing transparency, facilitating data subject rights, conducting DPIAs, and establishing data processing agreements. By fulfilling these responsibilities, data controllers uphold privacy rights and maintain trust in their handling of personal data.

What’s an Example of a Data Controller?

To better understand the concept of a data controller, consider an example:

A multinational e-commerce company collects customer data during the purchase process, like names, addresses, and payment details. In this scenario, the e-commerce company acts as a data controller because it determines the purpose (e.g. processing orders, analyzing customer preferences) and means (e.g. using an online platform) of processing the collected data.

What Is a Data Processor?

Data processors are entities or organizations that process personal data on behalf of data controllers. They act under the authority and instruction of data controllers and handle personal data for the specified purposes defined by the data controller. Data processors are contractually bound to ensure data security and confidentiality. They don’t have the same decision-making power as data controllers and must adhere to the instructions provided by the data controller.

What Are the Data Processor’s Responsibilities?

The responsibilities of a data processor are vital in ensuring the secure and lawful handling of personal data on behalf of a data controller. Some key responsibilities data processors typically bear:

  1. Processing Data in Compliance With Instructions: Data processors must process personal data based on the instructions provided by the data controller. They shouldn’t deviate from these instructions unless legally required to do so. Data processors should only collect, store, and use personal data to fulfill the specific purposes defined by the data controller and shouldn’t use it for any other purposes without explicit authorization.
  2. Ensuring Data Security and Confidentiality: Data processors have a responsibility to implement robust security measures to protect the personal data they process. This includes maintaining the confidentiality, integrity, and availability of the data and preventing unauthorized access, loss, or disclosure. Adequate security measures like encryption, access controls, and regular security assessments, should be in place to safeguard data and prevent data breaches.
  3. Assisting the Data Controller: Data processors are obligated to assist data controllers in meeting their responsibilities. This may involve supporting the data controller in responding to data subject requests (DSRs) to exercise their data protection rights, like accessing personal data or rectifying inaccuracies. Data processors should also cooperate with the data controller to carry out DPIAs/PIAs and comply with data protection regulations.
  4. Subcontracting and Data Sharing: If a data processor engages subcontractors or shares personal data with third parties, they must ensure these entities meet the same data protection standards. Data processors should have appropriate contractual agreements in place with these parties, outlining their data protection obligations and ensuring personal data is processed per applicable laws and regulations.
  5. Data Breach Notification: In the event of a data breach, data processors have a responsibility to promptly notify the data controller of the incident. They should provide all necessary information to assist the data controller in fulfilling their obligations to notify affected individuals and regulatory authorities, as required by data protection laws.
  6. Data Deletion and Retention: Data processors must follow the data controller’s instructions regarding the retention and deletion of personal data. Once the processing purpose is fulfilled, data processors should securely delete or anonymize the personal data, unless there are legal obligations requiring its retention. They shouldn’t retain personal data beyond the specified retention periods defined by the data controller.
  7. Compliance With Data Protection Laws: Data processors must comply with applicable data protection laws and regulations, including the General Data Protection Regulation (GDPR) and other relevant privacy laws. They should stay informed about their obligations under these laws and maintain internal policies and procedures that reflect current best practices in data protection.

Data processors have important responsibilities in ensuring the secure and lawful processing of personal data on behalf of data controllers. These responsibilities include following instructions, maintaining data security and confidentiality, assisting the data controller, subcontracting and data sharing with adequate safeguards, notifying data breaches, adhering to data retention and deletion instructions, and complying with data protection laws. By fulfilling these responsibilities, data processors contribute to maintaining the privacy and trust of data subjects.

What’s an Example of a Data Processor?

Consider this example to better understand the concept of a data processor

A software company that provides customer relationship management (CRM) services to various businesses collects and stores customer data on behalf of the businesses using the service. In this scenario, the software company acts as a data processor because it processes the customer data according to the instructions given by the businesses, which are the data controllers.

A company can be both a processor and a controller. For instance, if the same CRM advertises and collects the data on its own for a joint user visiting the website, it would be the controller for the data that was shared for the CRM purposes but also a controller as it pertains to marketing data for the visitor. Our friends over at SixFifty have a great breakdown about this.

What’s the Difference Between Data Controllers and Data Processors?

The main difference between a data controller and a data processor lies in their roles, responsibilities, and connections to data subjects

The data controller determines the purposes and means of processing personal data and carries the primary responsibility for complying with data protection laws

Data processors act on behalf of data controllers and process personal data based on their instructions. 

While both roles play a crucial part in the data processing lifecycle, the data controller has more control and decision-making authority over the data processing activities.

Data Controllers and Processors Under Privacy Laws

Various privacy laws, like the General Data Protection Regulation (GDPR) in the European Union and California’s Consumer Privacy Act (CCPA), define and differentiate the roles of data controllers and data processors

Let’s explore how these laws classify and regulate the two roles:

GDPR Data Controller vs. Data Processor

Under GDPR requirements, a data controller determines the purposes and means of processing personal data and has primary responsibility for data protection. Data controllers must ensure lawful processing, provide privacy notices to individuals, obtain valid consent when necessary, and implement appropriate security measures to be GDPR compliant

GDPR Data processors, on the other hand, must process personal data only based on the controller’s instructions, maintain confidentiality, and assist the data controller in meeting its GDPR compliance obligations.

CCPA Data Controller vs. Data Processor

The CCPA, a comprehensive privacy law in California, also defines the roles of data controllers and data processors

A data controller is an entity determining the purposes and means of processing personal information and is responsible for complying with the CCPA‘s requirements. Data controllers must provide consumers with specific privacy rights and obligations, including transparency and the ability to opt out of the sale of personal information. 

Data processors, under the CCPA, are the entities that process personal information on behalf of the data controllers and are subject to contractual obligations to protect personal information.

Closing Out

Understanding the distinctions between data controllers and data processors is crucial for organizations that handle personal data

The data controller plays a pivotal role in determining the purpose and means of data processing, while the data processor carries out processing activities on behalf of the controller

Both roles are subject to different legal obligations and responsibilities under privacy laws. By comprehending these differences, organizations can ensure compliance with relevant regulations and protect stakeholder privacy rights in an increasingly privacy-aware world.

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