The Data Protection Directive governs how organisations can treat anything deemed as 'personal data'. It gives responsibilities to data controllers. They are held responsible for and must put in place processing contracts with their 'data processors'.
The guidance is designed to help organisations decide who qualifies as a data controller and who as a processor in a business environment of increasing complexity. It was produced by the Article 29 Working Party, the committee of the data protection regulators of the 27 EU countries.
"The Working Party recognises the difficulties in applying the definitions of the Directive in a complex environment, where many scenarios can be foreseen involving controllers and processors, alone or jointly, with different degrees of autonomy and responsibility," it said. "There are signs that there may be a lack of clarity, at least as to certain aspects of these concepts, and some divergent views among practitioners in different Member States that may lead to different interpretations of the same principles and definitions introduced for the purpose of harmonisation at European level."
The Working Party said that the drafting of the Directive and its aim not to become quickly obsolete by referring too closely to specifics has left the law open to misinterpretation.
"Although the provisions of the Directive have been formulated in a technology-neutral way and so far were able to resist well to the evolving context, these complexities may indeed lead to uncertainties with regard to the allocation of responsibility and the scope of applicable national laws," it said. "These uncertainties may have a negative effect on compliance with data protection rules in critical areas, and on the effectiveness of data protection law as a whole."
"The Working Party has already dealt with some of these issues in relation to specific questions, but deems it necessary now to give more developed guidelines and specific guidance in order to ensure a consistent and harmonised approach," it said.
The guidance splits the Directive's descriptions of the terms 'controller' and 'processor' into their constituent parts, working through a detailed definition of each.
"The concept of controller is autonomous, in the sense that it should be interpreted mainly according to Community data protection law, and functional, in the sense that it is intended to allocate responsibilities where the factual influence is, and thus based on a factual rather than a formal analysis," it concluded.
"This opinion also analyzes the concept of processor, the existence of which depends on a decision taken by the controller, who can decide either to process data within his organization or to delegate all or part of the processing activities to an external organization," it said. "Therefore, two basic conditions for qualifying as processor are on the one hand being a separate legal entity with respect to the controller and on the other hand processing personal data on his behalf."
"The role of processor does not stem from the nature of an actor processing personal data but from its concrete activities in a specific context and with regard to specific sets of data or operations," said the guidance. "Some criteria may be helpful in determining the qualification of the various actors involved in the processing: the level of prior instruction given by the data controller; the monitoring by the data controller of the level of the service; the visibility towards data subjects; the expertise of the parties; the autonomous decision-making power left to the various parties."
The Working Party concluded in its guidance that though modern business can make it difficult to clearly define these roles in specific situations, there was no reason to think that the terms themselves are not capable of continued use in the Directive.