Processing: Overview, definition, and example
What is processing?
Processing refers to any action performed on data, such as collecting, storing, using, or sharing it. In legal and contractual contexts, processing typically relates to personal data and how businesses handle it under privacy laws like the GDPR or CCPA. It covers activities like recording customer details, analyzing user behavior, or transferring data to third parties.
Why is processing important?
Processing is important because it determines how data is used, protected, and shared. Businesses must comply with data protection laws to ensure personal information is handled lawfully and securely. Failure to manage data processing correctly can lead to legal penalties, reputational damage, and loss of customer trust.
For businesses, clearly defining processing activities helps establish accountability and transparency, ensuring compliance with regulations and building confidence with customers and partners.
Understanding processing through an example
Imagine an online retailer collects customer information to process orders. The retailer stores names, addresses, and payment details, then shares this data with a shipping company to deliver purchases. In this case, the retailer is processing customer data by collecting, storing, and sharing it.
In another example, a marketing company analyzes website visitor behavior to improve advertising strategies. The company tracks clicks, time spent on pages, and purchases to personalize ads. This involves processing data by collecting and analyzing user interactions.
An example of a processing clause
Here’s how a processing clause might appear in a contract:
“The Parties agree that any processing of personal data under this Agreement shall comply with applicable data protection laws. The Party processing data shall implement appropriate security measures and only use the data for the agreed purposes.”
Conclusion
Processing refers to any activity involving data, from collection to analysis and sharing. Businesses must handle data responsibly to comply with laws, protect privacy, and maintain customer trust. Defining processing terms in contracts helps ensure clarity, compliance, and security in data management.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.