Subprocessor: Overview, definition and example
What is a subprocessor?
A subprocessor is a third-party service provider that a company hires to handle part of the work or processing of data on behalf of another company, typically in the context of contracts or data processing agreements. This is commonly seen in industries like IT and data management, where a primary service provider may delegate certain tasks (e.g., cloud storage, customer support) to subcontractors.
Why is a subprocessor important?
Subprocessors are important because they allow a business to delegate specific functions to specialists or external companies, which can improve efficiency, reduce costs, and enhance service delivery. However, businesses need to ensure that any subprocessor they use complies with the same standards and regulations as the primary service provider, especially when handling sensitive data or fulfilling legal obligations.
Understanding subprocessors through an example
Imagine a company, DataTech Solutions, that provides data storage services. They partner with a cloud service provider, CloudCorp, to store their clients' data. To optimize the process, CloudCorp hires a subprocessor, DataSafe, to manage data backups. In this case, DataSafe is the subprocessor, helping CloudCorp fulfill its responsibilities to DataTech Solutions.
If DataTech Solutions has a data protection agreement with its clients, it will need to ensure that CloudCorp and DataSafe adhere to the same data protection rules and obligations, particularly when it comes to sensitive information.
An example of a subprocessor clause
Here’s how a subprocessor clause might look in a contract:
“The Service Provider may engage third-party subprocessors to perform certain services under this Agreement. The Service Provider will notify the Client of any such subprocessors and ensure that they are bound by the same terms and conditions regarding confidentiality, data protection, and security as outlined in this Agreement.”
Conclusion
A subprocessor is a third-party entity hired to carry out specific tasks on behalf of another company. While subprocessors can provide valuable services, businesses must ensure that proper safeguards are in place to protect sensitive information and maintain compliance with contractual and legal obligations.
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.