What’s the difference between a Data Processing Agreement and a Privacy Policy?

A Data Processing Agreement (DPA) and a Privacy Policy serve distinct, but complementary, purposes in data protection and privacy management: Data Processing Agreement (DPA): A DPA is a contractual agreement between a data controller (the party that owns and decides how personal data will be used) and a data processor (the party that processes data on behalf of the controller). It defines the specific terms and obligations regarding data handling, storage, security measures, and compliance with privacy regulations. The DPA governs the internal relationship between the parties directly involved in processing data, such as a company and its third-party service provider (e.g., a cloud storage provider, CRM provider, or payroll processor). The primary purpose of a DPA is to set clear, enforceable standards for data handling and protection between the controller and processor, ensuring that both parties understand their responsibilities in protecting personal data and complying with privacy laws. It is not a public document but an agreement between two or more entities engaged in data processing. Privacy Policy: A Privacy Policy, on the other hand, is a public-facing document that explains how an organisation collects, uses, stores, and protects personal data. It informs data subjects (such as customers, clients, and website visitors) about their rights, the types of data collected, the purposes for which it is used, and how to contact the organisation regarding data privacy. The Privacy Policy is designed to ensure transparency with data subjects, helping them understand how their personal data will be treated. It also allows individuals to make informed decisions about sharing their information with the organisation. A Privacy Policy is often a legal requirement under various data protection regulations (such as the Australian Privacy Act 1988) and is posted on the organisation’s website or made readily accessible to anyone whose data is collected. In short, a DPA is an internal contract governing the data processing relationship between a controller and processor, while a Privacy Policy is a public document that informs individuals about the organisation’s data handling practices. Both play crucial roles in privacy compliance, but they serve different audiences and purposes.

Why do I need a Data Processing Agreement?

In Australia, having a Data Processing Agreement (DPA) is essential for any business that collects, manages, or shares personal data with third-party providers. Here’s why it’s so important: Compliance with Privacy Laws: The Privacy Act 1988 and the Australian Privacy Principles (APPs) impose strict requirements on how personal data is collected, stored, and shared. A DPA helps ensure that these requirements are met by clearly outlining how data will be processed, reducing the risk of non-compliance and potential penalties. Clarity and Accountability: A DPA sets out clear roles and responsibilities for both parties regarding data handling. By defining these responsibilities, the agreement helps prevent misunderstandings, ensures that data is processed securely, and reduces the risk of data breaches. Mitigating Legal Risks: In the event of a data breach or privacy complaint, a well-drafted DPA can serve as a protective measure, demonstrating that both parties have taken reasonable steps to secure data and comply with privacy laws. This can limit liability and protect your business from costly legal challenges. Building Trust with Clients and Customers: With data privacy concerns on the rise, having a DPA in place shows clients and customers that your business takes data security seriously. This commitment to privacy not only strengthens relationships but also enhances your business’s reputation. In summary, a DPA is crucial for compliance, transparency, and risk management. It provides a clear framework for data handling, helping your business meet legal obligations and protect sensitive information shared with third parties.

What are the key elements of a Data Processing Agreement?

A Data Processing Agreement (DPA) typically includes several essential elements to ensure that personal data is handled securely, responsibly, and in compliance with data protection laws. Here are the key components commonly found in a DPA: Purpose and Scope of Data Processing: A clear definition of why and how data will be processed, specifying the exact services the processor will provide and the categories of personal data involved. This helps align both parties on the intended use of the data. Roles and Responsibilities: Identification of the data controller (the entity that determines the data’s use) and the data processor (the entity handling the data on behalf of the controller). Each party’s specific obligations regarding data protection, storage, and access are clearly outlined. Data Security Measures: Detailed descriptions of security practices and safeguards that the processor will implement to protect personal data from unauthorised access, breaches, or loss. This may include encryption, access controls, and secure data storage. Data Retention and Deletion Policies: Terms outlining how long the data will be stored and the process for securely deleting or returning data once processing is complete or the contract ends. This ensures data is not kept longer than necessary. Sub-Processor Management: If third-party sub-processors will be involved, the agreement specifies how these sub-processors will be vetted, monitored, and held to the same data protection standards. The controller usually retains the right to approve or reject sub-processors. Data Breach Notification Protocols: Procedures for promptly notifying the controller of any data breach or security incident. This element is critical for compliance with laws that require timely notification and helps mitigate the impact of breaches. Audit Rights and Monitoring: Provisions granting the data controller the right to audit or review the data processor’s practices to verify compliance. This can include on-site inspections or documentation reviews to ensure data security standards are being upheld. Cross-Border Data Transfers: If data will be transferred outside Australia, the DPA addresses cross-border data transfer requirements to ensure that any international processing complies with Australian laws and any applicable privacy regulations in other jurisdictions. Liability and Indemnity: Clauses that set limits on each party’s liability for data breaches or non-compliance and specify indemnification provisions. This defines financial and legal accountability in case of data mishandling. Termination and Data Handling upon Termination: Details on how data will be handled at the end of the agreement, including the secure deletion or return of data to the controller, ensuring data is not retained longer than necessary. Each of these elements helps establish a comprehensive framework for secure, compliant data processing. A well-drafted DPA ensures both parties understand their roles and responsibilities, minimises legal risks, and protects the privacy of individuals whose data is being processed.

Do I need a Data Processing Agreement for each processor?

Yes, it’s best practice to have a separate Data Processing Agreement (DPA) with each data processor your organisation engages. Here’s why a unique DPA for each processor is important: Tailored Compliance and Risk Management: Each data processor may have a unique role, type of service, or access level to personal data. A DPA that is tailored to the specific processing activities of each provider helps address unique risks and ensure compliance with privacy regulations. For example, the DPA with a cloud storage provider may focus heavily on data security and access controls, while a DPA with a marketing agency may emphasize data minimisation and purpose limitations. Varied Security and Data Handling Practices: Different processors may use different methods for securing and managing data, making it essential to specify individual security and data handling requirements for each one. By creating separate DPAs, you can ensure that each processor meets the exact standards your organisation needs based on their role and level of access to sensitive information. Clarification of Each Processor’s Legal Obligations: A unique DPA for each processor allows your organisation to clearly define each processor’s legal responsibilities and obligations, helping to avoid misunderstandings and gaps in compliance. It also makes it easier to monitor and enforce specific terms with each processor based on the nature of their services. Efficient Audit and Monitoring Processes: Having individual DPAs helps streamline audits and compliance checks by allowing you to assess each processor independently. This is crucial in cases where one processor might require a higher level of scrutiny due to the type of data they handle or the risk profile associated with their processing activities. Enhanced Legal Protection: Should a data breach or privacy complaint arise, having a separate DPA with each processor helps demonstrate that your organisation took reasonable steps to ensure compliance and protect personal data. This can reduce legal exposure and protect your organisation if a processor fails to meet their obligations. In summary, while it might seem convenient to use a single template DPA for multiple processors, having a customised DPA for each data processor ensures that your organisation is fully protected, compliant, and prepared to manage unique data handling requirements effectively.

Data Processing Agreement Legal Solutions

A Data Processing Agreement (DPA) is a legally binding contract between a data controller (the entity collecting and managing personal data) and a data processor (the entity handling data on behalf of the controller). It outlines how personal data will be processed, stored, and protected, ensuring compliance with Australian privacy laws.

In Australia, organisations that collect personal information and engage third parties to process this data (such as for storage, analytics, or customer support) are responsible for ensuring that data is handled securely and legally. A DPA formalises this relationship, helping organisations comply with the Privacy Act 1988 and the Australian Privacy Principles (APPs), which require protections around the collection, storage, and transfer of personal data.

The main purpose of a DPA is to establish clear terms for data processing activities, ensuring that both the controller and processor are aligned on responsibilities for protecting individual privacy and data security.

A Data Processing Agreement (DPA) and a Privacy Policy serve distinct, but complementary, purposes in data protection and privacy management:

Data Processing Agreement (DPA):
- A DPA is a contractual agreement between a data controller (the party that owns and decides how personal data will be used) and a data processor (the party that processes data on behalf of the controller). It defines the specific terms and obligations regarding data handling, storage, security measures, and compliance with privacy regulations.
- The DPA governs the internal relationship between the parties directly involved in processing data, such as a company and its third-party service provider (e.g., a cloud storage provider, CRM provider, or payroll processor).
- The primary purpose of a DPA is to set clear, enforceable standards for data handling and protection between the controller and processor, ensuring that both parties understand their responsibilities in protecting personal data and complying with privacy laws. It is not a public document but an agreement between two or more entities engaged in data processing.
Privacy Policy:
- A Privacy Policy, on the other hand, is a public-facing document that explains how an organisation collects, uses, stores, and protects personal data. It informs data subjects (such as customers, clients, and website visitors) about their rights, the types of data collected, the purposes for which it is used, and how to contact the organisation regarding data privacy.
- The Privacy Policy is designed to ensure transparency with data subjects, helping them understand how their personal data will be treated. It also allows individuals to make informed decisions about sharing their information with the organisation.
- A Privacy Policy is often a legal requirement under various data protection regulations (such as the Australian Privacy Act 1988) and is posted on the organisation’s website or made readily accessible to anyone whose data is collected.

In short, a DPA is an internal contract governing the data processing relationship between a controller and processor, while a Privacy Policy is a public document that informs individuals about the organisation’s data handling practices. Both play crucial roles in privacy compliance, but they serve different audiences and purposes.

In Australia, having a Data Processing Agreement (DPA) is essential for any business that collects, manages, or shares personal data with third-party providers. Here’s why it’s so important:

Compliance with Privacy Laws:
- The Privacy Act 1988 and the Australian Privacy Principles (APPs) impose strict requirements on how personal data is collected, stored, and shared. A DPA helps ensure that these requirements are met by clearly outlining how data will be processed, reducing the risk of non-compliance and potential penalties.
Clarity and Accountability:
- A DPA sets out clear roles and responsibilities for both parties regarding data handling. By defining these responsibilities, the agreement helps prevent misunderstandings, ensures that data is processed securely, and reduces the risk of data breaches.
Mitigating Legal Risks:
- In the event of a data breach or privacy complaint, a well-drafted DPA can serve as a protective measure, demonstrating that both parties have taken reasonable steps to secure data and comply with privacy laws. This can limit liability and protect your business from costly legal challenges.
Building Trust with Clients and Customers:
- With data privacy concerns on the rise, having a DPA in place shows clients and customers that your business takes data security seriously. This commitment to privacy not only strengthens relationships but also enhances your business’s reputation.

In summary, a DPA is crucial for compliance, transparency, and risk management. It provides a clear framework for data handling, helping your business meet legal obligations and protect sensitive information shared with third parties.

A Data Processing Agreement (DPA) typically includes several essential elements to ensure that personal data is handled securely, responsibly, and in compliance with data protection laws. Here are the key components commonly found in a DPA:

Purpose and Scope of Data Processing:
- A clear definition of why and how data will be processed, specifying the exact services the processor will provide and the categories of personal data involved. This helps align both parties on the intended use of the data.
Roles and Responsibilities:
- Identification of the data controller (the entity that determines the data’s use) and the data processor (the entity handling the data on behalf of the controller). Each party’s specific obligations regarding data protection, storage, and access are clearly outlined.
Data Security Measures:
- Detailed descriptions of security practices and safeguards that the processor will implement to protect personal data from unauthorised access, breaches, or loss. This may include encryption, access controls, and secure data storage.
Data Retention and Deletion Policies:
- Terms outlining how long the data will be stored and the process for securely deleting or returning data once processing is complete or the contract ends. This ensures data is not kept longer than necessary.
Sub-Processor Management:
- If third-party sub-processors will be involved, the agreement specifies how these sub-processors will be vetted, monitored, and held to the same data protection standards. The controller usually retains the right to approve or reject sub-processors.
Data Breach Notification Protocols:
- Procedures for promptly notifying the controller of any data breach or security incident. This element is critical for compliance with laws that require timely notification and helps mitigate the impact of breaches.
Audit Rights and Monitoring:
- Provisions granting the data controller the right to audit or review the data processor’s practices to verify compliance. This can include on-site inspections or documentation reviews to ensure data security standards are being upheld.
Cross-Border Data Transfers:
- If data will be transferred outside Australia, the DPA addresses cross-border data transfer requirements to ensure that any international processing complies with Australian laws and any applicable privacy regulations in other jurisdictions.
Liability and Indemnity:
- Clauses that set limits on each party’s liability for data breaches or non-compliance and specify indemnification provisions. This defines financial and legal accountability in case of data mishandling.
Termination and Data Handling upon Termination:
- Details on how data will be handled at the end of the agreement, including the secure deletion or return of data to the controller, ensuring data is not retained longer than necessary.

Each of these elements helps establish a comprehensive framework for secure, compliant data processing. A well-drafted DPA ensures both parties understand their roles and responsibilities, minimises legal risks, and protects the privacy of individuals whose data is being processed.

Yes, it’s best practice to have a separate Data Processing Agreement (DPA) with each data processor your organisation engages. Here’s why a unique DPA for each processor is important:

Tailored Compliance and Risk Management:
- Each data processor may have a unique role, type of service, or access level to personal data. A DPA that is tailored to the specific processing activities of each provider helps address unique risks and ensure compliance with privacy regulations. For example, the DPA with a cloud storage provider may focus heavily on data security and access controls, while a DPA with a marketing agency may emphasize data minimisation and purpose limitations.
Varied Security and Data Handling Practices:
- Different processors may use different methods for securing and managing data, making it essential to specify individual security and data handling requirements for each one. By creating separate DPAs, you can ensure that each processor meets the exact standards your organisation needs based on their role and level of access to sensitive information.
Clarification of Each Processor’s Legal Obligations:
- A unique DPA for each processor allows your organisation to clearly define each processor’s legal responsibilities and obligations, helping to avoid misunderstandings and gaps in compliance. It also makes it easier to monitor and enforce specific terms with each processor based on the nature of their services.
Efficient Audit and Monitoring Processes:
- Having individual DPAs helps streamline audits and compliance checks by allowing you to assess each processor independently. This is crucial in cases where one processor might require a higher level of scrutiny due to the type of data they handle or the risk profile associated with their processing activities.
Enhanced Legal Protection:
- Should a data breach or privacy complaint arise, having a separate DPA with each processor helps demonstrate that your organisation took reasonable steps to ensure compliance and protect personal data. This can reduce legal exposure and protect your organisation if a processor fails to meet their obligations.

In summary, while it might seem convenient to use a single template DPA for multiple processors, having a customised DPA for each data processor ensures that your organisation is fully protected, compliant, and prepared to manage unique data handling requirements effectively.

Our package starts from $700 + GST and includes drafting a Data Processing Agreement in accordance with your business’ requirements, phone consultations with a Sprintlaw lawyer who can advise you on the relevant legal issues and a complimentary amendment to the final draft we provide you.

As an online law firm, we eliminate the headaches of paying us by the hour and finding time to meet with a lawyer in person. We communicate via phone, email and cloud conferencing — whichever suits you! We know you’re busy, so we’re only a click away.

You’ll be guided through this process by our expert lawyers, who are Australian-qualified and were trained at leading law firms. They left the traditional corporate law sphere to help us make legal services better. Our lawyers specialise in technology, intellectual property, contract drafting, corporate and commercial law.

Our law firm operates completely online, which means we can help you wherever you are in Australia. We work at The Commons Central – a cool co-working space in Chippendale, Sydney – but our lawyers often work flexibly across various locations.