A Data Protection Officer (DPO) is responsible for monitoring compliance with data protection laws within a company. Companies can appoint either an internal or an external DPO. Both options have their advantages and disadvantages. Below we describe the differences between an external and an internal DPO based on various aspects:
1. Costs :
- External DPO : Cost-effective as companies do not have to bear long-term salary and training costs. External DPOs often work on a flat or hourly basis, which makes costs more predictable.
- Internal DPO : Higher overall costs due to salary, benefits and continuous training.
2. Knowledge and expertise :
- External DPO : Brings specialised knowledge and extensive experience in data protection. External DPOs often have certifications such as CIPP/E or CIPM and are always up to date with the latest legal requirements (Article 37 paragraph 5 GDPR).
- Internal DPO : Must be regularly trained and educated to stay up to date with data protection developments. This can be time-consuming and costly.
3. Independence and objectivity :
- External DPO : Can act more independently and objectively as he has no internal political or personal interests. This minimises the risk of conflicts of interest.
- Internal DPO : May be influenced by internal structures and relationships, which may affect objectivity.
4. Availability :
- External DPO : Available on-call and flexible to deploy as needed, providing a scalable solution that can adapt to the needs of the business.
- Internal DPO : Is permanently present in the company, which ensures continuous availability. However, this can lead to overload, especially in smaller companies.
5. Resource efficiency :
- External DPO : Efficient in the use of resources, as companies do not need to provide internal capacity for training or special data protection tools.
- Internal DPO : Often requires additional resources for training and specialized tools to meet data protection requirements.
6. Up-to-dateness of knowledge :
- External DPO : Typically has access to the latest developments and best practices in the data protection area, as they often manage multiple clients and are continuously learning.
- Internal DPO : Must be actively trained to stay up to date, which incurs additional time and costs.
7. Flexibility :
- External DPO : Offers a high degree of flexibility and can be involved more or less intensively depending on the needs of the company.
- Internal DPO : Less flexible, as it is usually firmly integrated into the company structure and cannot be scaled as easily.
8. Responsibility and liability :
- External DPO : Has professional liability insurance that covers risks. This provides companies with additional protection against potential claims for damages.
- Internal DPO : Liable within the scope of his employment, but the company bears the full risk in the event of data protection violations.
9. Training and awareness raising :
- External DPO : Provides specialised training and awareness-raising activities aligned with best practices and current developments in data protection.
- Internal DPO : Must develop training programs themselves or attend external training courses, which entails additional costs and organizational effort.
10. Strategic consulting :
- External DPO : Can provide strategic advice based on broad experience across different industries. This enables a comprehensive and holistic view on data protection strategies.
- Internal DPO : Has deeper insight into the company’s specific processes and structures, but may have less experience in applying data protection strategies in different contexts.
Effectiveness of the external data protection officer
The effectiveness of an external data protection officer is particularly evident in the combination of cost savings and high levels of expertise. The flexibility and specialized knowledge enable external DPOs to work efficiently and purposefully without placing excessive strain on the company’s internal resources. This is particularly advantageous for small and medium-sized companies that do not have the capacity to maintain a full-time internal DPO. Overall, the external DPO offers a cost-effective, flexible and highly specialized solution for compliance with data protection laws.
