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Data Processor: GDPR Compliance & Security

2 months ago

Cardiff

Article 8 mins read Updated on 30 April 2025 If you process personal data on behalf of clients, your business has legal responsibilities under UK GDPR as a data processor. Whether you're managing payroll data, providing cloud hosting services, or delivering analytics based on customer lists, your obligations under the UK General Data Protection Regulation (UK GDPR) and the Data Protection Act 2018 are specific, direct, and legally binding. Many service providers underestimate these responsibilities – often at their peril. Our experienced data protection solicitors help businesses navigate the often complex landscape of processor obligations, from reviewing contracts and mapping data flows to advising on international transfers, training and regulator engagement. If you're processing data for others, understanding your role and responsibilities isn't just a regulatory necessity – it's a critical step in protecting your business from enforcement, reputational damage, and commercial loss. Your role under data protection law depends on how you handle personal data in practice: • You are a data controller if you decide how and why personal data is used., • You have access to your client’s systems, which contain personal data., • You handle payroll data provided by your client, using it solely for payroll purposes., • You store customer data as part of a service, e.g. in hosting or support, but don’t use that data for your purposes. In some situations, you and another party may jointly determine the purposes and means of processing. In this case, you are joint controllers, and additional considerations will apply. It is essential that you accurately determine each party’s role in a data processing scenario, as this will directly dictate the legal obligations that arise under data protection law. If you’re unsure of your role, it’s essential to take legal advice to make sure you don’t fall foul of your obligations. As a data processor, you have specific responsibilities under the UK GDPR: • Protect personal data with security measures: You are responsible for protecting personal data by implementing appropriate technical and organisational measures to safeguard the data you hold against cyber attacks or data breaches. The specific measures you choose must be justified based on your risks and circumstances. Common examples include: • Passwords and access controls, • Encryption, • Multi-factor authentication (MFA), • Staff training and awareness • Train your staff: Ensure that your staff understand and are trained on how to handle personal data safely, and receive training on key issues, including what constitutes personal data, how to protect it, and how to report concerns. Staff working with large volumes or sensitive data may need more detailed training, depending on their role. Only authorised personnel should process personal data, and they should be bound by confidentiality obligations too., • Keep records of processing activities: You should keep a clear, written record of your processing activities,e.g. what data you handle, who it’s for, where it’s stored, whether it’s transferred internationally, and how you protect it. Even if you qualify for an exemption from mandatory record-keeping, maintaining this practice is still advisable. It shows that you take data protection seriously and highlights your accountability. It could also arise in client due diligence from your controllers, for example, when your clients inquire about whether you maintain accurate and up-to-date records of processing., • Help your controllers meet their legal duties: You need to support controllers in complying with specific legal responsibilities, such as when a controller requires input on a data protection impact assessment. You must be prepared and able to assist when asked., • Report data breaches to the controller: If something goes wrong and there’s any personal data breach (e.g. data is lost, shared by mistake, or accessed without permission), you must inform your controller client without undue delay. They have just 72 hours from becoming aware to report reportable breaches to the ICO, so time matters. Some contracts set even stricter timelines, e.g. immediately – so check carefully what you’ve agreed to and when you’re negotiating timelines for reporting breaches, make sure you can stick to them in practice., • Use only approved sub-processors: If you want to bring in another business to help you deliver services and process personal data (e.g. a subcontractor who handles some aspects of the project), you must get written authorisation from your controller client first. This can either be prior specific authorisation or general authorisation. Several critical rules apply when appointing sub-processors , and youare fully responsible to the controller for their actions. Therefore, run due diligence to ensure they are UK GDPR compliant,enter robust subcontracting agreementswith them, and verify that they comply with their obligations., • Manage international transfers lawfully: If you transfer or access personal data from outside the UK (e.g. when you send a client’s data to a third‑party supplier overseas), you must follow the UK GDPR rules on international transfers. Depending on the destination of the data, you may require additional safeguards, such as theInternational Data Transfer Agreement or the UK Addendum to the EU Standard Contractual Clauses, as well asa Transfer Risk Assessment . It’s vital to know where data will be shared and to ensure it is protected when it leaves the UK., • Your core work involves large‑scale, regular, and systematic monitoring of individuals or the processing of sensitive data related to crimes and criminal convictions ., • You’re a public authority (except courts acting in a judicial role), or, • Legal risks: As a processor, failing to meet your responsibilities under UK GDPR can lead to serious consequences, including significant fines, legal claims, reputational damage, and even criminal penalties in extreme cases. You may also face contractual liabilities – for example, where you have agreed to indemnify a data controller for your breaches., • Confusing roles: Not recognising when you are acting as both a controller and a processor, leading to missed or muddled obligations., • Sub‑processor mismanagement: Failing to appoint or manage sub-processors properly in line with legal requirement s., • Neglecting staff training: Leading to avoidable data breaches. There is a lot of misinformation out there, and the UK GDPR is a topic that can cause uncertainty and risk non‑compliance. That’s why investing in expert legal advice, which is tailored to your business, is critical. It’s essential to map out your data flows and thoroughly understand your data processing activities, enabling you to determine your specific legal obligations and identify the applicable rules for your business. Legal advice will help you understand the applicable rules, the steps you need to take (e.g., which processes or policies to implement), and how to mitigate risk as a processor. This is particularly important where you’re a service provider delivering services to multiple clients, meaning there is even greater scope for increased liability. If you're unsure about your responsibilities under data protection law, our expert data protection solicitors can help you. They can develop tailored policies, systems, and training to ensure compliance and to safeguard both your business and the personal data you handle. About our expert Lillian is an experienced data protection , privacy and AI lawyer, qualified since 2008 (England and Wales). She advises clients on a broad range of matters, from complex data protection issues to strategic compliance with a global perspective, as well as day‑to‑day operations. #J-18808-Ljbffr

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