Data Processing Agreement


Agreement between a data controller (such as a company) and a data processor (such as a third-party service provider) that regulates any personal data processing conducted for business purposes.

What is a Data Processing Agreement?

A DPA, or Data Processing Agreement, is like a safety manual between your startup and any third-party service providers handling personal data for your business. It's designed to protect personal data and ensure both parties follow the law.

For instance, if your SaaS startup uses a third-party cloud service provider to store user data, the DPA outlines the specifics about how this data will be handled. It clarifies who is responsible for what, how the data will be protected, what happens if there's a data breach, and the rights of the individuals whose data is being processed. The DPA is a key tool in ensuring that your startup remains in compliance with data protection laws and regulations.

Who are the parties in a Data Processing Agreement?

"Data Controller" - the entity deciding why and how personal data should be processed

"Data Processor" - the entity processing personal data on behalf of the controller

What are the risks when signing a Data Processing Agreement?

Not thoroughly reviewing a Data Processing Agreement (DPA) risks your company falling short on data security measures, potentially violating regulations and incurring fines.

Ambiguity in the processor's roles and responsibilities could lead to improper data handling, breaches of privacy regulations, or disputes.

Poorly defined data breach procedures could result in ineffective responses to breaches, amplifying damage and legal consequences. If data subject rights are vague, you risk failing to meet obligations, leading to penalties.

Without explicit data retention and deletion terms, you may retain data longer than allowed, leading to extra costs and possible regulatory non-compliance.

Unclear audit procedures could hamper compliance demonstration or efficient audit handling, potentially disrupting operations.