INTRODUCTION
In today’s data-driven world, the exchange and utilization of data have become crucial for businesses across industries. However, with the introduction of the General Data Protection Regulation (GDPR), protecting individuals’ privacy rights and ensuring the lawful processing of personal data has become paramount. Data-sharing agreements play an important role in facilitating the lawful and responsible sharing of data while striking a delicate balance between privacy protection and business advancement.
The GDPR, implemented in 2018, has transformed the landscape of data protection and privacy regulation. It establishes strict guidelines and principles that organizations must follow when handling the personal data of individuals within the European Union (EU) and the European Economic Area (EEA). Thus, compliance with the GDPR is not only legally mandated but also essential for maintaining customer trust and avoiding hefty penalties.
Data-sharing agreements serve as the contractual framework that governs the exchange of data between organizations. These agreements are designed to ensure that personal data is shared in a manner that respects the privacy rights of individuals and complies with the obligations outlined in the GDPR.
While businesses aim to maximize the value derived from data-sharing initiatives, they must navigate the intricate path of adhering to privacy regulations. Balancing privacy protection and business advancement is a delicate task. On one hand, organizations must safeguard individual’s personal information, ensuring its confidentiality, integrity, and appropriate use. On the other hand, they need to leverage shared data to drive innovation, enhance operations, and foster collaborations that promote business growth.
In this article, Team YLCC brings you a comprehensive guide on mastering GDPR-compliant data-sharing agreements!
KEY ELEMENTS OF GDPR-COMPLIANT DATA-SHARING AGREEMENT
Purpose
One of the foundational elements of a GDPR-compliant data-sharing agreement is clearly defining the purpose of the data-sharing activity. The agreement should explicitly state the intended use and objectives for which the data will be shared. This ultimately ensures that the data is not used for purposes beyond what the data subjects have consented to or what is legally permissible.
Here are some of the key points of this clause:
- Data sharing must have a lawful basis as outlined in the GDPR. The regulation provides several legal bases that organizations can rely on when processing personal data.
- These lawful bases include the necessity of processing for the performance of a contract, compliance with a legal obligation, protection of vital interests, consent, the performance of a task carried out in the public interest or in the exercise of official authority, and legitimate interests pursued by the data controller or a third party.
- It is important for organizations engaging in data sharing to identify and document the appropriate lawful basis for their activities. Consent is one common lawful basis, but it should be obtained in a manner that meets the stringent requirements of the GDPR.
- Other lawful bases may be applicable depending on the specific circumstances, such as when data sharing is necessary for the performance of a contract or when it serves a legitimate interest.
Data Minimization and Retention
The principle of data minimization is a fundamental concept in data protection and is particularly relevant when crafting GDPR-compliant data sharing agreements. Data minimization entails limiting the collection, processing, and storage of personal data to what is necessary for the specified purpose of the data sharing activity.
Data sharing agreements should incorporate provisions that adhere to the principle of data minimization. This means that only the minimum amount of personal data required to achieve the intended purpose should be shared between the parties involved and unnecessary or excessive data should not be included in the shared dataset.
Here are some of the key points:
- Organizations can mitigate privacy risks and reduce the potential impact of data breaches or unauthorized access by implementing data minimization practice. It also promotes the responsible use of personal data, ensuring that individuals’ privacy rights are respected.
- In addition to data minimization, data retention is another critical aspect to consider in data sharing agreements. Organizations should establish appropriate data retention periods and limitations in accordance with the GDPR’s principles.
- The GDPR requires that personal data should be kept in a form that allows identification of data subjects for no longer than is necessary for the specified purposes. Data sharing agreements should clearly outline the agreed-upon retention periods for the shared data. These periods should be based on factors such as the nature of the data, the purposes of the data sharing, and any legal or regulatory requirements.
- It is essential to avoid retaining personal data beyond the necessary timeframe. Storing data for longer than required not only increases privacy risks but also violates the principle of data minimization. Organizations should have processes in place to periodically review and securely dispose of shared data once it is no longer needed for its intended purpose.
Data Subject Rights and Consent
Under the GDPR, data subjects are granted certain rights that organizations must respect when processing their personal data. When crafting GDPR-compliant data sharing agreements, it is essential to address these data subject rights and establish mechanisms to uphold them.
The following points highlight an overview of data subject rights under the GDPR:
- Right to be informed: Data subjects have the right to be informed about the collection, use, and sharing of their personal data.
- Right of access: Data subjects have the right to access their personal data and obtain information about how it is being processed.
- Right to rectification: Data subjects can request the correction or updating of inaccurate or incomplete personal data.
- Right to erasure (right to be forgotten): Data subjects have the right to request the deletion of their personal data under certain circumstances.
- Right to restriction of processing: Data subjects can request the limitation of processing their personal data in certain situations.
- Right to data portability: Data subjects have the right to receive their personal data in a structured, commonly used, and machine-readable format and transmit it to another organization.
- Right to object: Data subjects can object to the processing of their personal data in specific circumstances, including direct marketing.
- Rights related to automated decision-making, including profiling: Data subjects have the right to be informed about and challenge automated decisions based on their personal data.
Consent is one lawful basis for data sharing under the GDPR. When relying on consent, organizations must ensure that it is freely given, specific, informed, and unambiguous. Consent should be obtained before the data sharing activity takes place and should be granular, allowing individuals to provide separate consent for different purposes of the data sharing.
Thus, data sharing agreements should outline how consent will be obtained and managed throughout the data sharing process and includes clearly explaining the purpose of the data sharing, informing data subjects about their rights and how to exercise them, and providing mechanisms for data subjects to withdraw their consent if they choose to do so.
Organizations should also implement a consent management practices, such as maintaining records of consent, regularly reviewing the validity of consent, and promptly addressing any withdrawal of consent by data subjects.
Security and Confidentiality Measures
A GDPR-compliant data sharing agreement should implement security measures which is importance to protect the shared data from unauthorized access, breaches, and other potential risks. Organizations must prioritize the confidentiality, integrity, and availability of the data they share.
Sharing data inherently involves a certain level of risk, as it increases the exposure of personal information to additional parties. Therefore, it is crucial for organizations to implement appropriate security measures to safeguard the shared data throughout its lifecycle. This includes measures such as encryption, access controls, data anonymization, regular security audits, and employee training on data protection best practices.
Here are some key points:
- Confidentiality clauses play a crucial role in data sharing agreements as they explicitly establish the obligation to keep shared data confidential and limit its use to the specified purposes. These clauses provide legal protection and serve as a deterrent against unauthorized disclosure or misuse of the data.
- Confidentiality clauses should also outline the obligations of all parties involved in the data sharing agreement to maintain the confidentiality of the shared data. This includes restrictions on sharing the data with unauthorized third parties and implementing appropriate security measures to protect the data from unauthorized access or disclosure.
- In addition to confidentiality clauses, organizations should consider incorporating provisions related to data breach notification. These provisions define the responsibilities and timelines for reporting any breaches or incidents involving the shared data to the appropriate parties, including data protection authorities and affected data subjects.
Data Transfers and Cross-Border Considerations
When engaging in data sharing agreements that involve transferring data outside the European Economic Area (EEA), organizations must navigate the requirements and safeguards outlined by the GDPR to ensure lawful and secure data transfers.
The GDPR imposes restrictions on transferring personal data to countries or organizations outside the EEA that are deemed to lack an adequate level of data protection. International data transfers to such countries or organizations can only take place if certain conditions are met.
The following are the conditions:
- Adequacy decision: Transferring data to a country or organization that has received an adequacy decision from the European Commission, indicating that it provides an adequate level of data protection.
- Standard Contractual Clauses (SCCs): Implementing SCCs, which are standardized contractual clauses approved by the European Commission, between the data exporter and the data importer.
- Binding Corporate Rules (BCRs): Implementing BCRs, which are internal rules and policies adopted by multinational organizations to ensure the protection of personal data transferred between their entities.
- Explicit consent: Obtaining the explicit and informed consent of the data subjects for the specific international data transfer.
- Derogations: Relying on limited derogations in specific situations, such as when the transfer is necessary for the performance of a contract, protection of vital interests, or the establishment, exercise, or defense of legal claims.
PRACTICAL TIPS FOR DRAFTING AND NEGOTIATING DATA SHARING AGREEMENTS
Clear and Precise Contract Language
When drafting data sharing agreements, using clear and unambiguous language is essential to ensure that all parties involved have a common understanding of their rights, obligations, and responsibilities.
The following are some of the suggestions for key provisions to include in the agreement:
- Parties involved: Clearly identify the parties entering into the agreement and their roles and responsibilities.
- Purpose and lawful basis: Clearly define the purpose of the data sharing activity and the lawful basis for the processing of personal data.
- Data minimization: Specify the types and categories of personal data that will be shared, ensuring data minimization principles are followed.
- Security measures: Outline the security measures to be implemented to protect the shared data, including encryption, access controls, and incident response procedures.
- Data subject rights: Address how data subject rights, such as access, rectification, and erasure, will be handled by the parties involved.
- Data retention and deletion: Define the agreed-upon retention periods and procedures for securely deleting or anonymizing the shared data.
- Data breach notification: Remember to specify the obligations and timelines for reporting data breaches to the relevant parties, including data protection authorities and affected individuals.
Assessing Third-Party Risks
When engaging third-party data processors in data sharing agreements, it is important to conduct due diligence and risk assessments to ensure their compliance with data protection requirements.
Here are some of the key points:
- Due Diligence: You should carefully assess the third party’s data protection practices, security measures, and their ability to meet GDPR requirements. AMake sure to request and review their privacy policies, data processing agreements, and any relevant certifications.
- Data Processing Agreements: Ensure that data processing agreements are in place with third-party processors, clearly defining their responsibilities, data protection obligations, and restrictions on sub-processing.
- Security Measures: Specify the security measures and controls that third parties must implement to protect the shared data and ensure they align with GDPR requirements.
- Data Transfers: If data is transferred to third parties outside the EEA, assess the appropriate safeguards or mechanisms for international data transfers.
Ongoing Compliance and Monitoring
To maintain GDPR compliance and ensure the effectiveness of data sharing agreements, the following points shall be considered:
- Compliance Monitoring: Establish processes for ongoing compliance monitoring, including periodic assessments of data processing activities, security measures, and adherence to the terms of the agreement.
- Documentation and Record-Keeping: Maintain comprehensive documentation of the data sharing agreement, consent records (if applicable), data processing activities, and any changes or updates made over time.
- Accountability Measures: Implement internal policies and procedures to promote accountability, such as appointing a data protection officer, conducting privacy impact assessments, and establishing a data breach response plan.
- Periodic Reviews: Regularly review and update data sharing agreements to ensure they align with changing legal requirements, technological advancements, and business needs.
Disclaimer: This article is for information purposes only. You are advised to consult a legal professional for drafting such crucial documents for your business.
This article has been written by Team YLCC. For any other queries, reach out to us at: queries.ylcc@gmail.com
