Processing of personal data: Overview, definition, and example
What is processing of personal data?
Processing of personal data refers to any action performed on personal information, including collection, storage, use, transfer, or deletion. It is regulated by privacy laws such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) to protect individuals' data rights.
For example, in a customer service agreement, a company that collects user information for support inquiries must process the data in compliance with privacy regulations. Similarly, in a marketing contract, a business using customer emails for promotional campaigns must ensure the lawful processing of personal data.
Why is processing of personal data important?
Processing of personal data must be handled carefully to ensure compliance with data protection laws, prevent unauthorized access, and protect individual privacy rights. Failure to follow proper data processing rules can result in legal penalties, fines, and reputational damage.
For businesses, defining data processing responsibilities in contracts helps clarify how personal data is collected, stored, shared, and protected. It also ensures that companies meet legal obligations and provide transparency to users and stakeholders.
Understanding processing of personal data through an example
Imagine an e-commerce company that collects customer names, addresses, and payment details. The company must process this data securely and only for the purpose of completing transactions. If the company shares data with third-party vendors, it must ensure compliance with privacy laws.
In another scenario, an HR software provider processes employee records on behalf of client businesses. The provider must follow strict data processing agreements to ensure that personal information is only used for payroll and compliance purposes, not for unauthorized marketing or sharing.
Example of a processing of personal data clause
Here's how a processing of personal data clause may look like:
“The Parties agree to process personal data in accordance with applicable data protection laws. Each Party shall ensure that personal data is collected, stored, and used only for the purposes outlined in this Agreement and that appropriate security measures are in place to protect against unauthorized access or disclosure.”
Conclusion
Processing of personal data is a critical aspect of data privacy and security in business operations. Proper handling ensures legal compliance, protects individual privacy, and prevents data misuse.
By including a processing of personal data clause in contracts, businesses can clarify responsibilities, ensure regulatory compliance, and build trust with customers and stakeholders.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.