Guidelines 02/2019 on processing of personal data under 6(1)(b) GDPR in the context of the provision of online services to data subjects

Section 2.6  Termination of contract

40. A controller needs to identify the appropriate legal basis for the envisaged processing operations before the processing commences. Where Article 6 (1)(b) is the basis for some or all processing activities, the controller should anticipate what happens if that contract is terminated.

41. Where the processing of personal data is based on Article 6 (1)(b) and the contract is terminated in full, then as a general rule, the processing of that data will no longer be necessary for the performance of that contract and thus the controller will need to stop processing. The data subject might have provided their personal data in the context of a contractual relationship trusting that the data would only be processed as a necessary part of that relationship. Hence, it is generally unfair to swap to a new legal basis when the original basis ceases to exist.

42. When a contract is terminated, this may entail some administration, such as returning goods or payment. The associated processing may be based on Article 6 (1)(b).

43. Article 17 (1)(a) provides that personal data shall be erased when they are no longer necessary in relation to the purposes for which they were collected. Nonetheless, this does not apply if processing is necessary for certain specific purposes, including compliance with a legal obligation pursuant to Article 17 (3)(b), or the establishment, exercise or defence of legal claims, pursuant to Article 17 (3)(e). In practice, if controllers see a general need to keep records for legal purposes, they need to identify a legal basis for this at the outset of processing, and they need to communicate clearly from the start for how long they plan to retain records for these legal purposes after the termination of a contract. If they do so, they do not need to delete the data upon the termination of the contract.

44. In any case, it may be that several processing operations with separate purposes and legal bases were identified at the outset of processing. As long as those other processing operations remain lawful and the controller communicated clearly about those operations at the commencement of processing inline with the transparency obligations of the GDPR, it will still be possible to process personal data about the data subject for those separate purposes after the contract has been terminated.

Example 4 (for thirst 3 examples, see section 2.5) An online service provides a subscription service that can be cancelled at any time. When a contract for the service is concluded, the controller provides information to the data subject on the processing of personal data.

The controller explains, inter alia, that as long as the contract is in place, it will process data about the use of the service to issue invoices. The applicable legal basis is Article 6 (1)(b) as the processing for invoicing purposes can be considered to be objectively necessary for the performance of the contract. However, when the contract is terminated and assuming there are no pending, relevant legal claims or legal requirements to retain the data, the usage history will be deleted.

Furthermore, the controller informs data subjects that it has a legal obligation in national law to retain certain personal data for accounting purposes for a specified number of years. The appropriate legal basis is Article 6 (1)(c), and retention will take place even if the contract is terminated.