SaaS Agreements – Brexit – Prepare Now

As a SaaS Supplier or SaaS customer you will be aware that the UK plans to leave the EU on the 29th of March 2019 – Brexit. In light of the various leaving scenarios currently being discussed of which a “no deal Brexit” is looking likely, it is essentail that SaaS suppliers and SaaS customers take steps now to ensure that they can continue to lawfully process and transfer personal data between the EU and the UK following Brexit.

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SaaS Agreements – Brexit – EU Data Transfers to the UK after Brexit

Under EU and UK data protection laws, UK SaaS suppliers are lawfully permitted to transfer personal data of SaaS customers located in the EU to any country within the EEA. From the 30th of March 2019, when the UK leaves the EU (“Brexit Date”), the UK will no longer be part of the EEA and will become a “third country” for data protection purposes, just like the USA.

The European Commission recently confirmed in a Notice that on the Brexit Date, UK based SaaS suppliers can no longer lawfully transfer personal data of SaaS customers located in the EU (i.e. in France, Germany, Spain etc.) to the UK,

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SaaS Agreements – Data Protection – What SaaS Suppliers need to know about the GDPR

From the 25th of May 2018 the EU General Data Protection Regulation (GDPR) will come into force and change existing data protection laws in all 28 EU member states. The GDPR will place direct obligations on SaaS suppliers (data processors) in relation to data processing activities. In addition customers (data controllers), their clients (data subjects) and local data protection authorities will be able to enforce breaches of the new rules directly against SaaS suppliers.

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SaaS Agreements – Brexit – EU Data Transfers

Once the UK leaves the EU, the UK will no longer be a member of the EEA. UK SaaS suppliers will no longer be lawfully permitted to continue to transfer personal data of EU SaaS customers to the UK unless the UK government, or alternatively SaaS suppliers themselves, put in place measures to make the transfer legal under EU data protection laws.

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SaaS Agreements – Data Protection – Privacy Shield Update

Similar to the rules under the Safe Harbor scheme, SaaS customer and SaaS suppliers need to self-certify their compliance with the principles of the Privacy Shield. The following are the core principles which must be adhered to.
Core Principles

Notice must be given to data subjects about specific issues;
Choice to opt out of disclosure of data to third parties;
Accountability for onward transfer to third parties;

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SaaS Agreements – Data Protection – Privacy Shield Approved

EU data protection law prohibits SaaS suppliers and SaaS customers from transferring personal data to countries or territories outside the EEA unless they are considered to provide adequate protection. Below is a summary of the current position following the recent announcement that the EU-US Privacy Shield has been adopted by the EU Commission and will now replace Safe Harbor.

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SaaS Agreements – Legal Implications of Brexit

SaaS suppliers and SaaS customers wondering about the business implications of a Brexit and how to prepare for this should be aware of the following. Despite the result of the referendum in the UK indicating that the UK will leave the European Union (EU), currently this has no legal consequence or effect upon the operations of SaaS suppliers or SaaS customers.

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SaaS Agreements – FAQs – EU Model Clauses

EU model clauses are standard data processing agreements that have been approved by the EU Commission as providing adequate protection. There are currently two sets of standard contractual clauses for transfers of personal data between data controllers and one set for transfers between a data controller and a data processor. EU model clauses must be used unamended (other than where specific details may be added, as set out in the notes to the clauses).

Where personal data is transferred from:

a data controller in the EU (SaaS customer) to a data processor outside of the EEA (SaaS supplier); or
a SaaS supplier within the EU to a sub-processor located outside of the EEA;

the SaaS supplier will need to enter into EU model clauses with the SaaS customer or SaaS sub-processor, as applicable.

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SaaS Agreements – Data Protection – Which law applies?

UK SaaS suppliers who provide cloud computing services to SaaS customers located outside of the UK are increasingly being required to comply not just with UK data protection law, but also the data protection laws of the countries in which the SaaS customer and its clients are based. This increasingly creates problems for SaaS suppliers, as data protection laws generally assume that data is stored/processed in one place. However when operating in the cloud data is often moved between jurisdictions and often it may be unclear exactly where data is being stored or processed and who is storing and processing it.

Two recent cases against Facebook and Google show the extent of this developing problem.

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SaaS, ASP Agreements – Distributor or Agent – Is there a Difference?

To find leads and sell SaaS software to customers on a global basis many suppliers use distributors or agents in the countries in which they wish to sell their products, but where they have no physical presence themselves. Suppliers need to decide whether the local partner acts as an agent or a distributor. There are important differences, advantages and disadvantages.

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