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Processors in practice

The definition of a processor can be difficult to apply in the complexity of modern business relationships. In practice, there is a scale of responsibility in how organisations work together to process personal data. The key is to determine each party’s degree of independence in determining how and in what manner the data is processed as well as the degree of control over it.

At one extreme, one party (the client) will determine what personal data is to be processed and provide detailed processing instructions that the other party (the service provider) must follow. The service provider is tightly constrained in what it can do with the data and has no say at all over how it is processed. In this relationship the client is clearly the controller and the service provider is the processor.

However, it is far more common for a data controller to allow its processor discretion over how the processing takes place using its own expertise.

Example

A bank hires an IT services firm to store archived data on its behalf – having ensured that the IT firm has given sufficient guarantees about the security of its systems and processes. The bank will still control how and why the data is used and determine its retention period. In reality the IT services firm will use a great deal of its own technical expertise and professional judgement to decide how best to store the data in a safe and accessible way.

However, despite this freedom to take technical decisions, the IT firm is still not a data controller in respect of the bank’s data – it is a processor. This is because the bank retains exclusive control over the purpose for which the data is processed, if not exclusively over the manner in which the processing takes place.

Example

A private company provides software to process the daily pupil attendance records of a state-maintained school. Using the software, the company gives attendance reports to the school.

The company’s sole purpose in processing the attendance data is to provide this service to the school. The school sets the purpose – to assess attendance. The company has no need to retain the data after it has produced the report. It does not determine the purposes of the processing, it merely provides the processing service. This company is likely to be a processor. 

Example

A bank contracts a market-research company to carry out some research. The bank’s brief specifies its budget and that it requires a satisfaction survey of its main retail services based on the views of a sample of its customers across the UK. The bank leaves it to the research company to determine sample sizes, interview methods and presentation of results.

The research company is processing personal data on the bank’s behalf, but it is also determining the information that is collected (what to ask the bank’s customers) and the manner in which the processing (the survey) will be carried out. It has the freedom to decide such matters as which customers to select for interview, what form the interview should take, what information to collect from customers and how to present the results. This means the market-research company is a joint controller with the bank regarding the processing of personal data to carry out the survey, even though the bank retains overall control of the data because it commissions the research and determines the purpose the data will be used for.

Example

A mail delivery service is contracted by a local hospital to deliver envelopes containing patients’ medical records to other health service institutions. The delivery service is in physical possession of the envelopes but may not open them to access any of the personal data or other content they contain.

The delivery service will not process the personal data in the envelopes and packages it handles. It is in possession of the envelopes and packages but, as it cannot access their content, it cannot be said to be processing (it is not even ‘holding’) the personal data they contain. Indeed, the delivery service will have no idea as to whether the items they deliver contain personal data or simply other information.

This means that, regarding the content of the envelopes and packages it delivers, the delivery service is neither a controller in its own right nor a processor for the clients that use its services, because:

The controller (the hospital) that chooses to use the delivery service to transfer personal data is the party responsible for the data. If the delivery service loses a parcel containing highly sensitive personal data, the controller that sent the data is responsible for the loss. So the controller will need to think carefully about the type of service that is most appropriate in the circumstances.

However, the delivery service will be a controller in its own right regarding any data it holds in connection with its provision of the delivery service. It will obviously be a controller regarding the HR data it processes about its own employees. In addition, to the extent that it records details of the delivery addresses of individuals (the name-and-address information on the items to be delivered), it will be a controller regarding that personal data. If the service arranges timed deliveries or tracking, then any personal data such as individual senders’ and recipients’ names and addresses it records for that purpose will be personal data for which the service is the controller.