Data Controller vs. Processor: Understanding Key Roles in Data Protection

The distinction between a data controller and a data processor lies at the heart of data privacy regulations, particularly under the General Data Protection Regulation (GDPR). These roles determine the responsibilities, obligations, and liabilities of entities handling personal data which is one of the fastest growing fields in the AI, Tech, Legal, and Compliance world. The Captain Compliance guide delves into the nuances of these roles and their applications in various industries and regulatory contexts that you should have a deeper understanding about after reading through.

What Is the Difference Between a Data Controller and a Processor?

A data controller determines the purposes and means of processing personal data. So what does that mean? The controller decides why and how data should be processed. On the other hand, a data processor who is different than a Data Protection Officer (DPO) acts on behalf of the controller, carrying out the data processing activities as instructed.

Data Controller vs. Data Processor: Understanding Key Roles in Data Protection

Key Responsibilities of a Data Controller

• Define the purpose of data collection.
• Determine the lawful basis for processing under GDPR.
• Ensure compliance with data protection principles like transparency and accountability.
• Address data subject rights, including access, correction, and deletion requests.

Key Responsibilities of a Data Processor

• Process data only on documented instructions from the controller.
• Implement security measures to protect personal data.
• Notify the controller of data breaches without undue delay.
• Maintain records of processing activities as required by law.

The distinction ensures accountability throughout the data lifecycle. While the controller is primarily responsible for compliance, the processor’s role in ensuring data security and lawful processing cannot be overlooked.

Differences Between a GDPR Data Controller and Data Processor

Decision-Making Authority

• Controller: Determines the “why” and “how” of processing personal data.
• Processor: Acts on the controller’s instructions without independent decision-making authority.

Accountability

• Controller: Directly accountable to data subjects and regulatory authorities for compliance.
• Processor: Indirectly accountable, primarily to the controller.

Contractual Obligations

• Controllers and processors must establish a Data Processing Agreement (DPA) under GDPR, clearly outlining roles and responsibilities.

Legal Liabilities

• Controllers bear ultimate responsibility for compliance failures, while processors can also be held liable for breaches of contract or data protection laws.

This division of responsibilities emphasizes collaborative compliance while ensuring clear accountability in data management.

Data Processor Examples

Data processors play an essential role across industries, providing services that involve handling personal data under the controller’s instructions.

Common Examples of a Data Processor

• Cloud Service Providers: Companies like AWS or Azure store and manage data for businesses but don’t decide how the data is used.
• Payroll Processors: Third-party payroll services process employee data for companies.
• Marketing Agencies: Agencies that manage targeted ad campaigns based on customer data supplied by a client.

By acting solely on the controller’s directives, these entities exemplify the processor’s role in supporting data-driven operations.

Data Processor Examples in Research

In research contexts, data processors assist with managing sensitive or complex datasets while adhering to the instructions of the data controller.

Examples in Academic and Clinical Research

• Data Analysis Firms: Conduct statistical analysis of datasets provided by academic institutions or research sponsors.
• Clinical Trial Organizations: Process patient data under the guidance of the research sponsor (controller).
• Survey Platforms: Tools like Qualtrics or SurveyMonkey collect and process responses for organizations conducting the research.

The processor’s role ensures data integrity and security while allowing researchers to focus on their primary objectives.

Data Processor vs. Data Controller ICO Guidance

The Information Commissioner’s Office (ICO) in the UK provides detailed guidance on the roles of controllers and processors under GDPR. Controllers are responsible for determining the purposes and means of processing personal data, while processors act solely on the instructions of the controller. The ICO emphasizes that controllers bear the primary responsibility for ensuring compliance with GDPR, including responding to data subject rights and managing legal obligations. Processors, however, must also implement robust security measures and report any breaches to the controller promptly. Clear contractual agreements are essential, as the ICO underscores that ambiguity in roles can lead to non-compliance and shared liability.

Key Insights from ICO Guidance

• Controllers have the most significant legal obligations because they dictate the purpose and means of processing.
• Processors must only act on instructions, ensuring they do not inadvertently become controllers by exercising autonomy in processing decisions.
• Joint controllers share decision-making responsibilities, requiring them to define their respective roles in a transparent agreement.

The ICO stresses the importance of clarity in defining these roles to ensure accountability and legal compliance.

Data Controller vs. Data Custodian

While a data controller oversees how and why data is processed, a data custodian focuses on data storage, security, and management.

Responsibilities of a Data Custodian

• Implement technical safeguards like encryption or firewalls.
• Maintain data integrity and accessibility.
• Execute the controller’s instructions regarding data use.

Unlike controllers, custodians do not make decisions about the purposes of data processing. Instead, they act as stewards, ensuring the data’s safety and reliability.

What Is a Data Custodian?

A data custodian is responsible for the technical management, storage, and security of data within an organization. Unlike data controllers, who define how and why data is used, or data owners, who set the strategic value and policies for data, data custodians focus on the operational aspects of data handling. Their primary role is to ensure data is stored securely, accessed appropriately, and maintained for integrity and usability.

Key Responsibilities of a Data Custodian

1. Data Storage and Security
   • Implement encryption, access controls, and firewalls to protect data.
   • Ensure compliance with regulatory security standards, such as GDPR, HIPAA, or ISO standards.
2. Access Management
   • Monitor who can access specific datasets and ensure permissions are granted appropriately.
   • Regularly audit access logs to prevent unauthorized use.
3. Data Backup and Recovery
   • Develop robust backup strategies to prevent data loss.
   • Implement disaster recovery plans to restore data quickly in case of breaches or failures.
4. Technical Support
   • Maintain the systems and tools that store and manage data.
   • Ensure data availability and high system uptime for operational needs.

Data Custodian vs. Other Data Roles

• Data Custodian vs. Data Controller: Custodians manage the data’s storage and access; controllers decide the purpose and means of its use.
• Data Custodian vs. Data Owner: Owners define the policies and strategic value of data; custodians implement these policies on a technical level.
• Data Custodian vs. Data Processor: Custodians focus on internal technical functions, whereas processors may operate under instructions from an external controller.

By maintaining the infrastructure and security of data, data custodians play a critical role in supporting an organization’s overall data governance strategy.

Data Controller vs. Data Owner

A data owner is typically an internal stakeholder who holds accountability for a dataset within an organization.

Key Differences between a Data Controller & Data Owner

• Data Controller: Externally accountable for legal compliance and data subject rights.
• Data Owner: Internally responsible for defining data policies, such as access levels and retention periods.

While controllers engage directly with data subjects and regulators, data owners focus on the strategic management of organizational data.

Data Controller vs. Data Steward

A data steward ensures that organizational data policies are adhered to, focusing on governance and quality control.

Comparison with Data Controllers

• Controller: Defines data policies and processes.
• Steward: Implements and enforces these policies within the organization.

Stewards act as enforcers, ensuring the controller’s directives are carried out effectively across operational teams.

What Is a Data Steward?

A data steward is responsible for ensuring that an organization’s data assets are properly managed, maintained, and utilized according to established governance policies. Unlike a data custodian, who focuses on the technical storage and security of data, a data steward oversees the quality, consistency, and compliance of data to ensure it meets the organization’s strategic and operational needs.

Key Responsibilities of a Data Steward

1. Data Quality Management
   • Ensure that data is accurate, complete, and consistent across all systems.
   • Identify and address data anomalies, redundancies, or inconsistencies.
2. Policy Implementation
   • Enforce data governance policies established by data owners.
   • Ensure compliance with regulatory requirements such as GDPR, HIPAA, or CCPA.
3. Metadata Management
   • Maintain detailed documentation about data, including definitions, formats, and usage.
   • Create a data dictionary to standardize terminology and promote uniformity.
4. Data Accessibility
   • Facilitate access to data for authorized personnel while maintaining security and compliance.
   • Act as a liaison between data users and technical teams, ensuring data meets business requirements.
5. Education and Advocacy
   • Train employees on proper data usage and adherence to governance policies.
   • Promote a culture of data responsibility within the organization.

Data Steward vs. Other Roles

• Data Steward vs. Data Custodian: Custodians focus on technical aspects like storage and security, while stewards prioritize data quality and compliance.
• Data Steward vs. Data Owner: Owners establish data policies and objectives, while stewards implement and enforce these policies.
• Data Steward vs. Data Controller: Controllers determine the purpose and means of processing data, while stewards ensure data accuracy and compliance with those purposes.

The Importance of Data Stewards

Data stewards play a crucial role in bridging the gap between technical teams and business stakeholders. By managing data quality and enforcing governance policies, they ensure that an organization’s data is reliable, compliant, and aligned with strategic goals. Their efforts reduce risks associated with poor data management, enhance decision-making, and foster trust in the organization’s data assets.

Data Controller vs. Data Processor Examples

Controller Examples

• An e-commerce business deciding what customer data to collect for order fulfillment.
• A healthcare provider determining the purpose of processing patient records.

Processor Examples

• A third-party delivery service processing shipping information provided by the e-commerce business.
• A billing company handling invoices for the healthcare provider.

These examples demonstrate the functional interplay between controllers and processors in real-world scenarios.

Data Controller vs. Data Processor PDPA

Under Singapore’s and Malaysia’s Personal Data Protection Act (PDPA), the concepts of controllers and processors are referred to as organizations and data intermediaries, respectively.

Key Differences

• Organizations: Determine the purposes of data collection and are directly accountable under PDPA.
• Data Intermediaries: Process data on behalf of organizations, with reduced compliance obligations.

PDPA emphasizes clear contractual agreements to delineate responsibilities between these roles.

Is Microsoft a Data Controller or Processor?

Microsoft can act as both a controller and a processor, depending on the context:

• Controller: For data collected from users of its direct services, such as Xbox or Outlook.
• Processor: When managing enterprise data on behalf of clients using Azure or Office 365.

Understanding the specific relationship is vital for determining compliance obligations. See our detailed information about Microsoft Clarity.

Is a Bank a Data Controller or Processor?

Banks like Chase, Bank of America, First Citizens, Silicon Valley Bank, and Wells Fargo are typically data controllers because they decide the purposes and means of processing customer data, such as managing accounts or issuing loans. However, banks may also act as processors when providing services like white-labeled credit card solutions for third-party businesses.

Is Google a Data Controller or Processor?

Google operates as both a controller and a processor:

• Controller: For services like Gmail, Google Ads, and YouTube, where it defines how user data is processed.
• Processor: When offering Google Cloud services, where clients determine data processing purposes.

Businesses must evaluate their relationship with Google to identify respective responsibilities but the examples above should make it clear which services would be classified as a controller and which would be classified as a processor.

Data Processor vs. Sub-Processor

A sub-processor is a third party engaged by a data processor to assist with processing activities.

Responsibilities

• Sub-processors must adhere to the controller’s instructions as passed down by the processor.
• The processor remains accountable for the sub-processor’s compliance.

Examples

• A payroll processor engaging a cloud storage provider as a sub-processor.
• A marketing agency using an analytics tool to analyze campaign performance.

Clear agreements are essential to ensure that sub-processors meet the same compliance standards as processors.

Key Takeaways About Data Controllers, Processors, and Sub-processors 

• Data controllers define the purpose and means of processing personal data.
• Data processors act on the controller’s instructions without independent decision-making authority.
• Sub-processors operate under the processor’s supervision, requiring clear contractual obligations.

What Steps to Ensure Compliance as a Data Controller and Data Processor

1. Define Roles Clearly: Establish whether you are a controller, processor, or sub-processor.
2. Draft Data Processing Agreements (DPAs): Specify responsibilities and compliance requirements.
3. Implement Safeguards: Ensure data security measures are in place.
4. Conduct Regular Audits: Review processing activities for compliance.
5. Train Staff: Educate employees on GDPR obligations relevant to their roles.

Distinction Between a Data Controller & Data Processor For GDPR Compliance

The distinction between a data controller and a data processor is fundamental to GDPR compliance. Controllers oversee the “why” and “how” of data processing, while processors execute these activities under strict instructions. Understanding these roles—along with related concepts like data stewards, owners, and sub-processors—ensures accountability and clarity in managing personal data. By defining responsibilities, implementing robust agreements, and adhering to regulatory standards, organizations can navigate the complexities of data protection with confidence.