Order processing contract: data protection and customer trust

In the digital world, protecting personal information is more important than ever. Companies that process personal data face the challenge of not only increasing the efficiency of their services, but also protecting the privacy of their customers. A key element in this effort is the order processing contract (AV contract). In this article we explain why this contract is a central pillar of data protection in the digital economy and how it contributes to a safe and trusting environment for companies and consumers. We are agency partners at eRecht24 and there you will receive, among other things, legally compliant sample contracts, e.g. B. for AV contracts, or even that eRecht24 Premium Generator, with which you can, among other things, create a data protection declaration, legal notice, cookie consent, etc. and many other options for a secured company.

What is a data processing agreement and is it so important?

Imagine a company wants another company to help it work with customer information - for example, storing email addresses or managing customer orders. In the European Union there are strict rules to protect this information, known as the “General Data Protection Regulation”, or **“GDPR” for short. In order for everything to run according to the rules, these two companies have to conclude a special contract: the data processing agreement. Simply put, this contract is an important document that provides clear instructions on how customers’ personal data may be handled. It ensures that the information is processed securely and in accordance with the law. This is particularly important when a company uses an external service provider to handle sensitive customer data. The contract specifies exactly what can be done with the data and ensures that both parties take data protection regulations seriously.

What does order processing mean?

As soon as companies outsource services that include access to customer data, they move into the area of ​​so-called order processing. But what does that mean exactly? Simply put, order processing occurs when personal data is collected, processed or forwarded by an external service provider on behalf of and in accordance with the company’s instructions. This service provider who is responsible for data processing is also referred to as a processor. The main responsibility for the secure and correct processing of the data remains with the company itself that commissions the processing. The service provider acts in a supportive manner in this context and may not use the data for its own purposes. Personal data includes any information that can uniquely identify an individual, such as names, addresses, account details or home telephone numbers. Even email addresses or login names are considered personal data if they have a direct connection to a real person. Data security and the protection of privacy are therefore the focus. Not only companies that collect data directly, but also those that commission third parties to process data must strictly adhere to the GDPR. In order to meet these requirements, it is necessary that the client and the processor conclude the order processing contract.

When is order processing involved?

In today’s business world, where data plays a major role, it often happens that companies outsource certain tasks related to the processing of this data to external service providers. Sometimes it’s not entirely clear when you reach the area of ​​order processing. In the following list we have listed some examples for you.

• Outsource payroll accounting You hand over responsibility for your company’s payroll accounting to a payroll office.
• Check customer satisfaction A call center will conduct a customer satisfaction survey on your behalf.
• Assign marketing tasks You commission an agency that e.g. B. Create statistics or send newsletters for your customers.
• Software support A programmer takes care of installing, maintaining and updating your software.
• Web hosting Your website is hosted by an external provider.
• IT support An IT service provider will repair or replace hardware for you.
• Document disposal You outsource the destruction of files to a specialized service provider.

Interestingly, the external service provider, such as the call center or marketing agency, does not even have to actually access the personal data. It is enough that theoretically there is the possibility of access to speak of order processing.

An example of when you need an AV contract.

If your agency e.g. For example, if you create websites for clients, you often work with a web host to make the site available on the Internet. Since this web host theoretically has access to the website’s data, it is important to also conclude an AV agreement with them. Likewise, you need a contract with your customer. But be careful: Only you should be listed as responsible in the privacy policy of the customer website, not the web host. However, you must specify which web host you use in the AV contract. In principle, you always need an AV contract if external providers have access to the personal data you process. A few more examples are given in the following list:

• Web analytics tools These tools collect data about how visitors use your website. Since they collect information about users’ behavior and some identifiers, you must conclude an AV contract with the provider, for example Google Analytics.
• Web Hosting Provider Each website is hosted on a server and the hosting provider potentially has access to personal information collected on that website. Therefore an AV contract is necessary.
• Email marketing tools If you send newsletters, these services process email addresses and possibly other information from your customers.
• External accounting software This software processes sensitive data such as financial information from customers and employees.
• Cloud Services When storing data in the cloud, providers theoretically have access to this information. Google Drive or Dropbox are examples here. B. to.
• Remote maintenance tools They enable e.g. B. with TeamViewer remote access to computer systems, potentially allowing access to personal data.

What does it look like for service providers abroad?

Service providers within the EU and EEA If you work with service providers from other EU countries or the European Economic Area (EEA), you can do this relatively easily. The reason for this is that the General Data Protection Regulation (GDPR) applies in all of these countries. This means that they all offer the same level of protection for personal data as Germany. This makes collaboration easier as no additional data protection agreements are required to ensure the level of protection. Dealing with service providers outside the EU Working with service providers from non-EU countries, including the USA, requires more attention. According to the GDPR, data transfer to such countries is only permitted if certain conditions are met. These conditions are intended to ensure that the level of protection for the transferred data corresponds to that of the GDPR. There are various mechanisms to ensure this:

• Adequate level of protection The third country must offer a level of protection recognized by the European Commission. This is currently the case for a limited number of countries.
• Binding Corporate Rules Large international corporations can use these internal guidelines to ensure data protection within their group of companies.
• Express consent Particularly when using services from US providers such as Google Analytics or Zoom, you must obtain the express consent of the data subjects.
• Data Privacy Framework After the end of the Privacy Shield, a new agreement between the EU and the USA is in the works, the “Data Privacy Framework”. Companies should check whether US service providers are certified under this agreement to ensure an adequate level of data protection. In our article The “EU-U.S. Data Privacy Framework” – data protection agreement between the EU and the USA find out more about the topic.

It is crucial that companies using service providers from third countries fully address data protection requirements. In doing so, they should not only take into account the legal framework, but also assess the risks for the people affected. Data protection is an important concern for consumers and complying with GDPR not only protects personal data but also increases trust in your company.

Risks without a data processing agreement

Compliance with the GDPR and entering into an AV contract are not optional, but a legal necessity for companies that process personal data. To avoid huge fines, legal disputes and claims for damages, companies should ensure they complete these important contracts on time. Without this, data processing is not legally protected, which can have serious consequences:

• Heavy Fines Non-compliance with the GDPR can result in fines of up to 20 million euros or 4% of global annual turnover, whichever is greater. These penalties are designed to emphasize the importance of data protection and encourage companies to comply.
• Warnings and legal proceedings Companies that do not conclude an AV contract also expose themselves to the risk of warnings from competitors and possible legal proceedings. Such legal disputes can not only be expensive, but can also damage the company’s reputation.
• Claims for damages Individuals whose data has been processed unlawfully can claim damages. Both the client and the processor can be held responsible unless they can prove that they are not to blame for the data protection breach. However, without an AV contract, this proof is difficult to provide.

Are sample contracts GDPR compliant?

Sample contracts can provide a practical starting point if you want to create an order processing contract (AV contract) in accordance with the General Data Protection Regulation (GDPR). They provide structure and can help ensure that no important aspect is overlooked. However, it is crucial to be careful when using templates like this:

• Check source Not every template on the Internet meets the current legal requirements. It is important that the sample contract is from a trustworthy source such as eLaw24 comes from data protection authorities or specialist legal portals.
• Attorney review Ideally, the template should have been prepared or at least reviewed by a lawyer. This increases legal certainty and ensures that the contract complies with the specific requirements of the GDPR.
• Individual adaptation A sample contract serves only as a framework. It is necessary to adapt it to the specific conditions of your data processing activities. This applies in particular to the type of data processed, the purpose and scope of the processing as well as the technical and organizational measures that must be taken.

Include the AV contract in the general terms and conditions

An efficient and innovative strategy for mastering the issue of order processing contracts is to incorporate this contract into your general terms and conditions. The GDPR requires that personal data processed on behalf of the company must be protected by an AV contract. However, this does not necessarily have to be available as a separate document. Integrating the AV contract into your general terms and conditions offers several advantages:

• Automatic validity With the acceptance of your general terms and conditions for every order or service, the AV contract automatically becomes part of the business relationship. This simplifies the process significantly and ensures that you are always GDPR compliant.
• Liability Protection This method ensures that you are consistently protected when processing personal data. Since the AV contract is an integral part of your general terms and conditions, you minimize the risk of legal consequences and at the same time strengthen data protection.
• Efficiency and clarity By bundling your contractual documents, you avoid redundant agreements and ensure clear conditions both internally and for your customers.

To ensure that the integration of the AV contract into your general terms and conditions complies with legal requirements, we recommend paying attention to the following points:

• Customization Make sure that the integrated AV contract is specifically tailored to your processing activities and the associated risks.
• Transparency The relevant provisions of the AV contract should be presented clearly and understandably in the general terms and conditions to avoid misunderstandings.
• Legal Review Have the amended Terms and Conditions reviewed by a data protection expert or lawyer to ensure compliance with GDPR and other relevant regulations.

Our recommendation for legally secure AV contract templates

Legally compliant documentation is necessary and it is therefore essential to use legally compliant templates when creating AV contracts. We therefore recommend using it specialized offers, such as B. from eLaw24. This service provides, among other things, lawyer-reviewed templates for AV contracts that provide a reliable basis for your contractual regulations. Not only is legal security guaranteed, but also protected from possible fines and legal disputes. We can confirm the effectiveness and reliability from our own experience, so you can make your company GDPR-compliant and protect yourself and your customers, this contributes significantly to the security of your company.

Conclusion

The order processing contract is a fundamental element in data protection that helps companies meet the requirements of the General Data Protection Regulation (GDPR) and strengthen the trust of their customers. By defining clear responsibilities between clients and processors, it ensures the secure handling of personal data and helps minimize legal risks. Through clear agreements between the contracting parties and integration into the general terms and conditions, it offers an effective way to comply with the GDPR, while the use of verified templates from specialist providers guarantees a solid legal basis. In the digital economy, the AV contract is therefore indispensable for compliance with data protection standards and preserving privacy.