If you're a data processor working with sub-processors, UK GDPR compliance must be a central part of your operations.
As your business grows and you rely more on third parties for core services, such as cloud hosting or payment platforms, ensuring that your sub-processors handle personal data lawfully becomes critical. You remain accountable for how these third parties process data on your behalf, and failing to get it right could put your client relationships – and your reputation – at risk.
Our data protection solicitors can help you understand and apply your legal responsibilities with confidence. Whether you’re drafting sub-processor agreements, managing controller notifications, or addressing liability risks, we’ll work with you to design practical and scalable compliance strategies that protect both your data flows and commercial interests.
Contents:
- Key UK GDPR compliance for data processors engaging sub-processors
- How to assess sub-processor compliance with UK GDPR
- How to notify controllers about sub-processor changes
- What to include in sub-processor contracts
- Managing liability risks when using sub-processors
- Tips to streamline sub-processor compliance and stay ahead
- Protecting your business while staying compliant
Key UK GDPR compliance for data processors engaging sub-processors
As a data processor, you handle personal data on behalf of a data controller and must only process it following their instructions.
One of the key UK GDPR compliance challenges for data processors is ensuring personal data is handled strictly under a controller’s instructions, especially when working with sub-processors.
Before bringing a sub-processor on board, you must comply with the UK GDPR requirements. Take legal advice if you’re unsure whether a third-party supplier or subcontractor could act as a sub-processor.
Key obligations when appointing a sub-processor include:
- Obtain written authorisation from the controller before appointing a sub-processor. This authorisation can be specific or general.
- If the controller provides general authorisation, notify the controller of any changes to sub-processors and allow them to object before appointing a new sub-processor. You’ll need a clear process for managing objections.
- To maintain UK GDPR compliance, ensure your contract with the sub-processor mirrors or offers equivalent data protection terms to those you’ve agreed with the controller.
For a detailed explanation of the roles of controllers and processors under UK GDPR, see the ICO’s guidance on controllers and processors.
How to assess sub-processor compliance with UK GDPR
Sub-processors are typically third-party vendors engaged by you (the processor) to process personal data on behalf of the controller. Examples include a SaaS platform that stores customer data with a cloud hosting provider or an e-commerce platform that relies on a third-party payment processor.
UK GDPR applies to all processors, including sub-processors. They must comply with the same strict rules that apply to you. For example, sub-processors must:
- Process data only under the controller’s instructions.
- Implement strong security measures to protect personal data.
As a supplier and data processor, you should always ensure robust due diligence processes are in place. Before appointing a sub-processor, you must ensure they meet these standards by conducting due diligence, which includes:
- Reviewing their security practices.
Confirming they have a history of compliance with the UK GDPR. Verifying that they can meet your contractual obligations.
How to notify controllers about sub-processor changes
Controllers need to know exactly who is handling their data. Where your contract allows controllers who have given general authorisation to object to sub-processor changes, you must follow a well-documented, written process to notify them.
Practical tools to help streamline this process include:
- Notifying controllers via email when you appoint or change sub-processors.
- Keep an up-to-date list of sub-processors on your website and inform controllers of any changes.
- Use software to manage sub-processor notifications and updates, primarily if you work with many sub-processors.
Ensure your process is both efficient and compliant with all relevant legal requirements. For smaller businesses, this can be as simple as sending an email. However, for larger processors, a more sophisticated system may be necessary.
What to include in sub-processor contracts
Navigating strong sub-processor agreements is crucial to strike a balance between UK GDPR compliance and your business realities. But remember, you’re fully liable to the controller for the performance of the sub-processor’s obligations. So, the contract needs to:
- Specify what data the sub-processor will handle and how it will be protected.
- Include terms on important issues such as data breach notifications, security requirements, and audit rights.
- Ensure the sub-processor agrees to implement appropriate technical and organisational measures.
Although it may not always be possible to fully flow down the same obligations you have agreed with the controller and enforce them on all sub-processors, seeking legal advice to ensure your contracts are robust is crucial.
Managing liability risks when using sub-processors
Liability is a key concern when working with sub-processors. If something goes wrong, the controller can hold you responsible for any breaches or issues related to data processing.
To manage this risk, ensure your contract with the sub-processor includes strong liability provisions, such as:
- Indemnity clauses are where the sub-processor agrees to compensate you for any damages caused by their actions.
- Insurance requirements, ensuring the sub-processor has sufficient coverage to back up their indemnity obligations.
Negotiating these clauses with sub-processors can be challenging, but it’s essential to safeguard your business from potential risks. Consult with a data protection lawyer to ensure these provisions are legally sound.
Tips to streamline sub-processor compliance and stay ahead
To stay compliant with UK GDPR and manage sub-processor relationships effectively, it's important to:
- Regularly review and audit your sub-processors to ensure they’re still compliant.
- Keep clear and transparent records of your due diligence and ongoing monitoring.
- Implement processes and tools to promptly and efficiently notify controllers of any changes to sub-processors.
By establishing a clear and efficient system for managing your sub-processors, you can mitigate risks and ensure ongoing compliance with UK GDPR.
Protecting your business while staying compliant
Working with sub-processors adds operational value, but also legal complexity. UK GDPR compliance isn’t just about contracts and audits; it’s about building trust with controllers and demonstrating that you take data protection seriously. From selecting compliant sub-processors to managing change notifications and liability exposure, every step must be carefully planned and documented.
If you're unsure how to structure your sub-processor relationships or want to reduce your legal risks, our data protection solicitors can provide the support and clarity you need. We help businesses like yours establish solid processes to stay compliant, avoid disputes, and maintain strong relationships with their controllers.
