Overview

This article ensures that controllers use processors who implement GDPR-compliant measures to protect the rights of data subjects. Processing activities must be governed by a binding contract that outlines responsibilities and ensures compliance with GDPR obligations.


Key Principles

  • Contractual Governance: Controllers must establish binding contracts with processors.

  • Sub-Processor Authorization: Processors require prior authorization to engage sub-processors.

  • Confidentiality and Security: Processors must maintain confidentiality and implement technical and organizational measures to protect personal data.

  • Compliance Assistance and Audits: Processors must assist controllers in fulfilling GDPR obligations and allow audits or inspections.

Organizational Applicability

This article applies to all organizations processing personal data within the EU:

  • Controllers engaging processors to perform data processing activities.

  • Public and private sector entities managing third-party processing relationships.

  • Teams responsible for vendor management, legal compliance, and data governance.

Implementation Requirements

  • Ensure processors are GDPR-compliant before engagement.

  • Establish a written contract specifying processing purposes, obligations, and security measures.

  • Require processors to obtain authorization for any sub-processors.

  • Include provisions for audit, assistance with compliance, and confidentiality.

Implementation Guidance

  • Maintain a vendor management process to assess processor compliance.

  • Use standard contractual clauses to formalize GDPR obligations.

  • Periodically review processor contracts and compliance performance.

  • Train staff on managing processor relationships and ensuring GDPR obligations are met.

Periodic Review

  • Frequency: Annually or when engaging new processors or updating contracts.

  • Responsible Role: Data Protection Officer (DPO), Compliance Team, or Legal.

  • Outcome: Ensure all processors operate under GDPR-compliant contracts and safeguard personal data.

Non-Compliance Risks

  • Fines: Up to €20 million or 4% of global annual turnover.

  • Legal Exposure: Liability for processor non-compliance and enforcement actions.

  • Reputational Damage: Loss of trust due to poor processor management.

  • Operational Risk: Data breaches or failures in compliance due to inadequately managed processors.