UK: How Much Do Data Centres And Cloud Providers Need To Know About The Data? - Part One

The volume, profile and relevance of regulation around data has increased significantly in the last few years.

We've seen record fines handed out for breaches affecting millions, (TalkTalk and Yahoo), charities lambasted for wealth screening practises (which were widespread but not transparent), revelations about government monitoring and back-door access to private corporations' systems and outcries over attempts by government to create a central health database ( And now we have the General Data Protection Regulation 2016 ("GDPR"), bringing major changes for data controllers and, for the first time, direct statutory obligations for data processors too.

So if you are a data centre operator or cloud service provider, how much do you need to know about all of this? After all, it's your customers' data, not yours, so you aren't responsible for it, right?

If only the world were that simple...

There's a sliding scale depending on what type of service you are providing, and how close you are to the data itself and the systems in which it resides. Those factors will determine whether any of the legislation applies to you directly. You should also be aware of legislation and industry requirements affecting your customers as well, to be able to anticipate what they will want to see from you.

In this article, the first of a two-part series, we look how GDPR applies to different types of service providers along this scale.

The General Data Protection Regulation 2016 ("GDPR")

For the first time, the GDPR puts statutory obligations on data processors. A "processor" processes data on behalf of another (the "controller"), under the controller's instruction and direction. To "process" is very wide and covers almost anything to do with data other than pure transit. Storage and deletion are "processing".

Colocation provider

Pure colocation operators' positions have been, and will remain, that they are not processors under GDPR. As the hardware on which data is processed is not owned by the colocation provider, they are not a processor.

Two 'buts'.

Firstly, there are some limited activities where the provider will process data. Most data centres require visitors to submit a passport or other identification to gain entry. The operator records those details in order to maintain security and will be a controller of that data. Where security guards are provided by a third party, operators will need to ensure that they have appropriate clauses in their contracts to cover this processing. CCTV over common areas of the data centre involves processing of data. Whether the operator is a controller or processor here will depend on what degree of control the operator has over the CCTV system.

Secondly, whilst operators are not processing data, the security around the data centre is part of the security ecosystem that customers will evaluate to determine whether the data is protected by "appropriate technical and organisational measures" from theft, loss, accidental disclosure. The standard required for security by the GDPR has not changed from that in the current Data Protection Act 1998. However, controllers are required to obtain "sufficient guarantees" from their processors that the processor is capable of complying with the GDPR. Whilst operators will not be processors for the vast majority of data that resides in their data centres, operators should anticipate customers asking more details questions around security and requiring more documentation of security systems, including evidence of testing and results, incident logs and certifications.

So the main changes under GDPR which will affect colocation providers are:

  • Where the operator is a controller (i.e. for employee data, access identification document and possibly CCTV), the full force of the GDPR will apply e.g. mandatory record keeping, mandatory breach notification, more detailed privacy notices, carrying out Data Protection Impact Assessments for systems like CCTV;
  • Where the operator is a processor (which will apply in limited scenarios e.g. CCTV where the customer prescribes how the CCTV will operate, but the operator will not be a processor for the data that resides on the customer's servers in the data centre), the operator will need to comply with the processor specific obligations in relation to that data (see advise for platform as a service (PaaS) operators below);
  • Anticipate that customers may be asking more detailed questions about security and require more evidence. Remember though that you are not a processor of this data, so do not have a direct obligation under GDPR to ensure that there is adequate security in place.

PaaS provider

Providers of platforms within the technology stack will definitely be processors on the basis that store data or host applications in which data resides. However, if the service is limited to providing a mere platform onto which the customer installs their own applications which carry out the actual transactions with the data, then the provider will not be a controller.

The big change for PaaS providers is that you now have direct statutory obligations as a processor, whereas previously your data protection obligations were only those flowed down in contracts by controllers. You could therefore be subject to regulatory fines for failing to comply with your obligations, in addition to contractual liabilities. Fines are substantial - up to €20million or 4% of global annual turnover (whichever is greater).

Key obligations you will need to comply with are:

  • security (which is a joint responsibility with the controller);
  • ensuring international transfers occur using an approved transfer mechanism (also a joint responsibility with the controller);
  • mandatory record keeping of your processing;
  • ensuring that your sub-processors can provide "sufficient guarantees" that they comply with the GDPR;
  • assisting the data controller to implement data subject rights and with their own security obligations (but in a manner appropriate to the nature of the processing) and assisting with Data Protection Impact Assessments.

Key actions for PaaS providers are therefore:

  • prepare evidence that your company is capable of implementing the GDPR as controllers are required to ensure that they have "sufficient guarantees" from you. It will be much simpler if you are prepared for the question rather than allowing each customer to require different evidence. In the future, hopefully the regulators will approve some certifications or codes of conduct to simplify this;
  • determine what security you deem to be appropriate for the platform, given that you will not know exactly what data your customer will be processing. Be very clear with customers that they will need to take the risk that actual security is suitable as determined by the customer given that only they will have detailed knowledge of their applications, processing, types of data, categories of data subjects etc;
  • have a Data Protection Impact Assessment for your platform/systems that is suitable for sharing with customers. Customers are likely to want to see these to feed in to their own assessments (which will be mandatory in certain circumstances);
  • consider how your system meets the principles of privacy by design and privacy by default. This means that privacy considerations should be one of the design principles of software systems, rather than being bolted on afterwards. Whilst this is not a direct obligation on processors in the GDPR, it is something that controllers have to show and the recitals to the legislation note that controllers will be reliant on their suppliers to achieve this;
  • think about what you need from customers so that you can meet your GDPR statutory obligations. The GDPR expects controller's obligations to be set out, as well as the processor's. This is your opportunity to ensure that it is clear which party is doing what in areas where both have responsibility like security. It also gives you a contractual remedy for damages if the customer fails to perform (even if you cannot get any indemnity protection);
  • be ready for negotiation of GDPR compliant processing clauses. Whilst the GDPR sets out certain points that must be covered, there is leeway and the ability to shape the clause to the types of services being provided;
  • carry out diligence on your supply chain. It is your responsibility to ensure that all your sub-processors are capable of being GDPR compliant. You will be liable to your customers for your sub-processors' failings and actions. Customers may want to see evidence of your diligence to satisfy themselves that they can comply with the principle of accountability.

SaaS providers

If you provide access to a software application as a cloud service, you will be a processor, so everything set out above in relation to PaaS providers above is relevant, except that the nature of your services will be different. Therefore the level of assistance that you will need to give to customers relating to data subject rights and security will be higher and more involved.

Key actions for SaaS providers:

  • decide how to cost in the price of compliance with GDPR. Should this be built into the price of the service or chargeable separately depending on the level and complexity of assistance and compliance?
  • Decide how to resource and approach the extended data subject rights. For example, can you build access to and modification of personal data into systems through dashboards and portals so that data subjects can effectively help themselves to their data? Or will you need to train a customer services team to manually effect requests for copies of data, amendments, deletions etc?
  • Decide how to tackle joint obligations such as security and international transfers. Operationally who will make decisions? Contractually who will take the risk of the actual security being deemed insufficient by a regulator?

Managed service provider

Regulators have acknowledged that some service providers have a greater degree of control and freedom in how data is used in order to provide a service. These providers will actually be controllers in their own right. Sophisticated outsourcing services could fall into this bucket, or professional service providers operating in a cloud environment.

The distinction between who is a processor and who is a controller has not changed under GDPR. If you are on the borderline, now is the time to conduct a thorough analysis to determine and record why you believe you are just a processor and not a controller. The consequence of getting that wrong is a fine for failing to meet the controller's obligations, which is likely to attract fines at the higher end of the spectrum.

Controllers clearly bear the full brunt of the GDPR requirements and the principles, including accountability.

Points to consider where you are a service provider who is a controller:

  • How will privacy notices for both you and the customer be presented without confusing data subjects? Where you are truly joint controllers, the GDPR requires it to be very clear to data subjects about what entity is doing what and how they can enforce their data subject rights, but even if you are not joint controllers, both parties' processing activities will need to be clear in order to be transparent.
  • Related to privacy notices is being clear with data subjects how they enforce their rights and which entity they need to deal with. Providers should consider how their systems interact with the customer's to ensure that operationally data is consistent.
  • If there is a breach, both parties will have a duty to report to the regulator, and possibly to data subjects as well. This could put a provider in an awkward position commercially if the customer does not believe that a breach should be reported, or wants to limit disclosure to the regulator.
  • Watch the relationship between data protection issues and confidentiality. Just because a provider is a controller does not mean that you are free to do whatever you want with the data that you process as a customer is still likely to view this as "their" data and confidential. For example, if you intended to run big data style analytics on data that you process across customers in similar sectors in order to gain insights into overarching trends, other restrictions in the contract could restrict or prevent that.

The GDPR come into force on 25 May 2018, so with just a year to go, now is definitely the time to create action plans in order to become compliant.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
21 Sep 2017, Seminar, London, UK

Has Cloud replaced traditional outsourcing models? We will compare cloud to outsourcing, consider whether they have effectively become the same thing for many solutions and assess some of the advantages and disadvantages of each model.

3 Oct 2017, Seminar, London, UK

Join us over breakfast for our third retail-focused seminar.

17 Oct 2017, Workshop, Birmingham, UK

This practical workshop will take in-house counsel through the life of a brand, providing guidance on issues which regularly arise.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.