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A data processor is a person who processes data on behalf of a data controller. A data controller decides the purpose and manner to be followed to process the data, while data processors hold and process data, but do not have any responsibility or control over that data.
Machines that perform operations on data, such as calculators or computers, could also be considered data processors, and now cloud service providers can be labeled data processors as well.
Data processors obtain, hold and process data. They perform certain operations on data that may comprise organizing, altering or adapting the data, the retrieval and usage of the data, disclosure of the data as may be necessary and to combine, block, erase and perform other similar operations. Data processors do not need to comply with rules that concern the collection and usage of data, as this is mostly meant for data controllers. Data processors' sole responsibility is to process the data as per instruction, without taking ownership of the data. Data processors take the data as input, then process it and generate the output. This is true for both machines and human beings, whichever is processing the data.
Often market research companies, payroll companies and even accountants process information that is personal in nature but on behalf of others. Hence, they can be considered data processors.