GDPR/Contracts

Let's clarify the "contract" lawful basis under GDPR and how it applies to your expense app, along with data retention policies.

Lawful Basis: Contract

Under GDPR, "contract" is one of six lawful bases for processing personal data. It applies when processing is necessary for performing a contract with the data subject (the user) or for taking steps at their request before entering into a contract.

Key points about "contract" as a lawful basis:

• Necessity is Key: The processing must be essential for fulfilling the contract. If you can provide the service without processing certain data, you can't rely on "contract" for that processing.
• Direct Relationship: There must be a direct contractual relationship between you (the data controller) and the user.
• No Unnecessary Processing: You can't use "contract" as a justification for processing data for unrelated purposes, like marketing or analytics, unless you have a separate lawful basis (e.g., consent).
• Example: If you offer a paid subscription for premium features, processing payment information is necessary for fulfilling the contract.

How Your Expense App Can Be Contract-Based:

The core functionality of a personal expense app—allowing users to record, categorize, and track their expenses—can be considered a service provided under a contract (even if it's a free service). The "contract" doesn't have to be a formal written document with signatures; it can be implied through the user's actions of using the app after being presented with terms of service.

Here's how the "contract" basis applies to your app:

• Data processed for core functionality: The data users input (expense amounts, categories, dates, etc.) is necessary for the app to function as intended. Therefore, processing this data can be justified under the "contract" basis.
• Terms of Service (ToS) and Privacy Policy: These documents form the basis of the "contract." The ToS outlines the terms of using your app, and the Privacy Policy explains how you process user data. Users accept these terms when they create an account or begin using the app.

Data Retention Policy (Contract Basis):

Since the lawful basis is "contract," the data retention period should be tied to the duration of the contract. This means:

• Active Account: As long as the user has an active account and uses the app, you have a legitimate reason to retain their data to provide the service.
• Account Termination: When the user terminates their account (cancels the "contract"), you no longer have a contractual basis to retain their data. You should then delete their data, unless you have another lawful basis for retaining it (e.g., legal obligation for tax records).
• Inactivity: You mentioned 5 years of inactivity. This is a reasonable approach. After a period of inactivity (clearly defined in your ToS and Privacy Policy), you can consider the contract to be effectively terminated and delete the user's data.

Example Wording for Your Privacy Policy:

"We collect and process your expense data (amount, category, date, etc.) to provide you with the expense tracking service as outlined in our Terms of Service. This processing is necessary for the performance of our contract with you. We retain your data for as long as your account is active. If your account is inactive for five years, or if you request account deletion, we will delete your personal data, unless we are legally required to retain it (e.g., for tax or accounting purposes)."

Important Considerations:

• Transparency: Be very transparent in your Privacy Policy about what data you collect, why, and how long you keep it.
• User Control: Give users control over their data. Provide options to export their data or request account deletion.
• Legal Obligations: Be aware of other legal obligations that might require you to retain data for specific periods (e.g., tax laws). These obligations can override the "contract" basis for retention.
• Consult Legal Counsel: Again, this information is for general understanding. Consulting with a legal professional specializing in data privacy is crucial for ensuring full GDPR compliance.

By clearly defining the contractual relationship with your users and implementing a transparent data retention policy, you can establish a strong foundation for GDPR compliance in your expense app.