Data Controller or Data Processor?

Data Controller or Data Processor?

How to Interpret Two Core Definitions of Data
Protection Legislation

Companies and
individuals may face difficulties in determining which one of the definitions
they fall under and whether they or the ones they are working with have data
protection responsibility. Interaction between these two concepts is of paramount
importance, as it imposes obligations in terms of liability. This piece aims to
inform companies involved in the processing of personal data to be able to
determine whether they are or the third parties they work with are acting as a
data controller and/or as a data processor under Turkish data protection
legislation.

Along with information
systems, business models become more complex. A number of organizations may be
working together in an initiative that involves processing personal data. Even
if the "data controller" and the "data processor" are defined under the data
protection legislation, companies and individuals may face difficulties in
determining which definition they fall under and whether they or the company
they are working with have data protection responsibility within the scope of
the Law No. 6698 on Protection of Personal Data.

Processing of personal data means
any operation performed on personal data, wholly or partly, whether through
automatic means, or if the data is part of a data filing system, through
non-automatic means, such as collection, recording, storage, preservation,
alteration, retrieval, disclosure, transfer, acquisition, making available,
categorizing or blocking. Considering this wide definition, entities and individuals
who are involved in the aforementioned activities may fall under the scope of
data controller or data processor, and might be held liable for their actions.

According to Article 3/1(i) of the DP
Law; data controller is;

"the real person or legal entity which sets the objectives and means of
processing personal data and who is in charge of establishment and management
of data filing system".

Data processor on the other hand is
defined as;

"the
real person or legal entity, which processes personal data based on the
authority given by and on behalf of the data controller" under Article 3
(1-g) of the DP law.

One of the main reasons there is a
distinction between the two terms are to prevent loss of a right when the data
is being processed. There is a significant line in between the data controller
and processor because the data controller will be the one to determine the
reason for process, and the processor will be the one to act within the scope
of framework determined by the controller. As indicated under Article 12(3) of
the DP Law the data controller is obligated to carry out or have carried out
necessary inspections within his institution and organization in order to
ensure implementation of the provisions of the DP Law.

Within the scope of EU Data
Protection Directive 95/46/EC ("Directive") data controller means a person who
(either alone or jointly or in common with other persons) determines the
purposes for which and the manner in which any personal data are, or are to be,
processed. A data controller must be a "person" recognized in law, that is to
say: individuals; organizations; and other corporate and unincorporated bodies
of persons. For example; a government department sets up a database of
information about every child in the country. It does this in partnership with
local councils. Each council provides personal data about children in its area,
and is responsible for the accuracy of the data it provides. It may also access
personal data provided by other councils (and should comply with the data
protection principles when using that data). The government department and the
councils should be deemed data controllers in relation to the personal data on
the database.

As a general principle under DP Law
and EU legislation, data controller determines the purposes for which and the
manner in which personal data will be processed. Therefore, the data controller
is the actor who decides "how" and "why" personal data is processed.

Data
processor, in relation
to personal data, means any person (other than an employee of the data
controller) who processes the data on behalf of the data controller. For
example a utilities company engages another company which operates call centers
to provide its customer services functions on its behalf. The call center staff
has access to the utilities company's customer records for the purpose of
providing those services but may only use the information they contain for specific
purposes and in accordance with strict contractual arrangements. The utilities
company remains the data controller. The company that operates the call center would
be considered as a data processor.[1]

In some cases, there are difficulties
in determining data controller and processor responsibilities. For example, in
the franchise business model, the parent company decides which personal data
will be collected and how personal data will be processed, and the company with
the branch must comply with these rules. However, the branch that collects
personal data is directly related to the data subjects and is the first point
of contact where personal data is collected. If the branch makes the decision
on setting the objectives and means of processing personal data and who is in
charge of establishment and management of data filing system, the parent
company should not be considered "data controller" but the branch should.

With regards to determining whether
an organization is a data controller or a data processor the following list can
be useful; [2]

• to collect the personal data in the first
  place and the legal basis for doing so;
• which items of personal data to collect, i.e.
  the content of the data;
• the purpose or purposes the data are to be
  used for;
• which individuals to collect data about;
• whether to disclose the data, and if so, who
  to;
• whether subject access and other individuals'
  rights apply ie the application of exemptions; and
• how long to retain the data or whether to make
  non-routine amendments to the data.

According to Article 29 Data
Protection Working Party, an independent EU advisory body, there are three ways
a controller can be appointed[3]; (a) Control stemming from
explicit legal competence: establishes a task or imposes a duty on someone to
collect and process certain data. For example, this would be the case of an
entity which is entrusted with certain public tasks (e.g., social security) which
cannot be fulfilled without collecting at least some personal data, and sets up
a register with a view to fulfil them. (b) Control stemming from implicit
competence: stems from common legal provisions or established legal practice
pertaining to different areas for example the employer in relation to data on
his employees, the publisher in relation to data on subscribers, the
association in relation to data on its members or contributors. (c) Control stemming
from factual influence. This is the contractual relations between the different
parties involved.

According to Information
Commissioner's Office data processor may decide:

what IT systems or other methods to use to
collect personal data;
• how to store the personal data;
• the detail of the security surrounding the
  personal data;
• the means used to transfer the personal data
  from one organization to another;
• the means used to retrieve personal data about
  certain individuals;
• the method for ensuring a retention schedule
  is adhered to; and
• the means used to delete or dispose of the
  data[4].

In order for data subjects to
securely disclose their personal data, the data controllers and data processors
are obligated to process the personal data within the scope of the purpose of
processing. The data controller has the right to decide on which items to
collect, to determine the purpose of processing and whether to disclose the
data or not which gives the controller a freedom to carry out its activities in
a manner and technical style, and as per Article 17 of the Directive, must
implement appropriate technical and organizational measures to protect personal
data against accidental or unlawful destruction. Whereas, the processor mainly
is given the option to rely on decisions taken by controller and will be
obliged to follow the rules and take necessary steps determined by the
controller. As per Article 16 of the Directive, the data processor acting under
the authority of the controller who is allowed to process the data and has
access to it, is required to act based on the controller's instructions or based
on law.

Authors:
Gönenç Gürkaynak, Esq., Ilay Yilmaz and Nazli Pinar Taskiran, ELIG,
Attorneys-at-Law

First
published in Mondaq on April 25, 2017.

[1] https://ico.org.uk/for-organisations/guide-to-data-protection/key-definitions/

[2] http://ec.europa.eu/justice/policies/privacy/docs/wpdocs/2010/wp169_en.pdf

[3] http://ec.europa.eu/justice/policies/privacy/docs/wpdocs/2010/wp169_en.pdf

[4] http://www.thesolicitorsgroup.com/News/Article.aspx?ArticleID=3569921a-a91a-4eaf-a712-f71147164715