Data Processing Chain: What is a Subprocessor?

Mar 10, 2025

What is a Subprocessor?

A subprocessor is defined as a third-party entity engaged by a data processor to assist in processing personal data on behalf of a data controller. This relationship is critical in modern digital ecosystems where companies often outsource functions such as cloud storage, customer relationship management (CRM), or email marketing. For instance, a company might use Salesforce (processor) for CRM, and Salesforce might use Amazon Web Services (AWS) for storage (subprocessor). This cascading chain ensures efficiency but introduces complexity in compliance.

The GDPR, effective since May 25, 2018, provides detailed regulations under Article 28, which, while not explicitly using “subprocessor,” refers to “another processor” engaged by the initial processor. This “another processor” is what is commonly understood as a subprocessor. The role involves handling operational functions like cloud infrastructure, as noted in sources like Captain Compliance: What is a Data Subprocessor?. The definition aligns with the need for transparency and accountability in data flows, especially in complex cloud architectures.

Legal Framework and Requirements

Under GDPR Article 28, several key requirements must be met:

Controller’s Approval: The processor must obtain prior specific or general written authorization from the controller to engage a subprocessor, as outlined in ICO: What does it mean if you are a processor?. General authorization requires the processor to inform the controller of changes, allowing objections.
Contractual Obligations: A contract must exist between the processor and subprocessor, mirroring the controller-processor contract. This “back-to-back contract” must include details like the subject matter, duration, nature, and purpose of processing, as per INPLP: GDPR: Rights and Obligations of Sub-Processors. It must also ensure compliance with Article 28(3), covering security measures and data subject rights.
Security and Compliance: Subprocessors must implement technical and organizational measures, such as encryption and access controls, to protect data, as noted in GDPR Summary: Sub-Processor. They must also assist in responding to data subject requests and report breaches promptly.
Liability: The processor remains fully liable to the controller for the subprocessor’s compliance. If the subprocessor fails, the processor faces potential fines, as seen in cases where processors were penalized for subprocessor breaches, such as a €1.2M fine mentioned in Visualping.io: What is a Subprocessor.

Practical Examples and Applications

Real-world examples illustrate the concept:

A retailer (controller) uses Mailchimp (processor) for email campaigns, and Mailchimp outsources analytics to Segment (subprocessor). Mailchimp must notify the retailer and ensure Segment complies with GDPR.
An HR platform like BambooHR (processor) might use Gusto (subprocessor) for payroll, with BambooHR remaining liable for Gusto’s compliance.

These examples highlight the need for transparency, with companies like Zapier listing subprocessors on privacy pages (Zapier Subprocessors), though updates can lag, causing compliance challenges.

While the GDPR is central, other laws also address subprocessors:

CCPA/CPRA (California): Uses “service provider” similarly, with businesses remaining liable, but with less stringent subprocessor requirements compared to GDPR, as per general legal analyses.
LGPD (Brazil): Mirrors GDPR, requiring processing agents (including subprocessors) to follow controller instructions, as noted in privacy law overviews.
PIPEDA (Canada): Holds organizations accountable for data transferred to third parties, implying subprocessor oversight without specific terminology, according to Canadian privacy guidance.

Compliance Challenges and Trends

Managing subprocessors involves challenges:

Transparency Issues: Companies struggle to keep subprocessor lists updated, with X discussions (as of March 2025) highlighting delays in notifications, impacting controller trust.
Consent Delays: Approval processes can slow operations, with a 2024 X post noting a firm rejecting a subprocessor due to security concerns, delaying projects.
Liability Risks: Processors face fines for subprocessor breaches, with a February 2024 article on Visualping.io citing a €1.2M fine, emphasizing accountability.

Trends as of March 2025 include:

Automation Tools: Companies like Scrut Automation (Scrut Automation: Managing Sub-Processor Risk) offer software for subprocessor management, tracking compliance.
Regulatory Scrutiny: EU regulators post-Schrems II focus on subprocessor chains, especially international transfers, according to recent privacy law articles.
AI Subprocessors: The classification of AI tools like chatbots as subprocessors is debated, with no definitive GDPR ruling, but controllers are advised to treat them as such, per Statsig: What is a Sub-Processor and why is it important?.

Management Strategies

To manage subprocessors effectively:

Inventory: Maintain an updated list, notifying controllers of changes, as seen in Deepnote’s approach (Deepnote Privacy).
Due Diligence: Assess subprocessor security and compliance before engagement, as recommended in Captain Compliance.
Contracts: Use Data Processing Agreements (DPAs) with clear terms, often based on GDPR’s Standard Contractual Clauses, per RescueTime: What are your sub-processors, as defined by the GDPR?.
Monitoring: Conduct regular audits and require breach reporting, as outlined in ICO Guidance.

Fines and Enforcement

While direct fines on subprocessors are rare, processors have been fined for subprocessor failures. For example, a 2021 French case saw a processor fined €75,000 for inadequate security measures, as per Mondaq: GDPR: When It Comes To Data Security, Processors Are No Longer Safe. The GDPR Enforcement Tracker (GDPR Enforcement Tracker) shows processors account for about 2% of fines, highlighting the growing scrutiny.

Obligation	Description
Controller Approval	Processor must get prior written consent, specific or general, from the controller.
Contractual Terms	Contract must mirror controller-processor terms, covering security and compliance.
Security Measures	Subprocessor must implement encryption, access controls, and other safeguards.
Breach Notification	Subprocessor must report breaches promptly to the processor, who notifies the controller.
Data Subject Rights	Assist in responding to requests like access or deletion, ensuring compliance.
Audits	Allow controller or auditors to verify compliance, ensuring transparency.
Liability	Processor remains fully liable for subprocessor’s compliance, facing potential fines.