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Exam CIPP-E topic 1 question 163 discussion

Actual exam question from IAPP's CIPP-E
Question #: 163
Topic #: 1
[All CIPP-E Questions]

SCENARIO -
Please use the following to answer the next question:
BHealthy, a company based in Italy, is ready to launch a new line of natural products, with a focus on sunscreen. The last step prior to product launch is for BHealthy to conduct research to decide how extensively to market its new line of sunscreens across Europe. To do so, BHealthy teamed up with Natural Insight, a company specializing in determining pricing for natural products. BHealthy decided to share its existing customer information – name, location, and prior purchase history – with Natural Insight. Natural Insight intends to use this information to train its algorithm to help determine the price point at which BHealthy can sell its new sunscreens.
Prior to sharing its customer list, BHealthy conducted a review of Natural Insight’s security practices and concluded that the company has sufficient security measures to protect the contact information. Additionally, BHealthy’s data processing contractual terms with Natural Insight require continued implementation of technical and organization measures. Also indicated in the contract are restrictions on use of the data provided by BHealthy for any purpose beyond provision of the services, which include use of the data for continued improvement of Natural Insight’s machine learning algorithms.
In which case would Natural Insight’s use of BHealthy’s data for improvement of its algorithms be considered data processor activity?

  • A. If Natural Insight uses BHealthy’s data for improving price point predictions only for BHealthy.
  • B. If Natural Insight receives express contractual instructions from BHealthy to use its data for improving its algorithms.
  • C. If Natural Insight agrees to be fully liable for its use of BHealthy’s customer information in its product improvement activities.
  • D. If Natural Insight satisfies the transparency requirement by notifying BHealthy’s customers of its plans to use their information for its product improvement activities.
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Suggested Answer: B 🗳️

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aliblabla
3 months, 2 weeks ago
Selected Answer: B
What Ssourav (below) states is correct, but is not the right answer to the question asked about improvement of the algorythm. Therefor B answers the questions asked more specifically.
upvoted 3 times
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Ssourav
3 months, 3 weeks ago
Selected Answer: A
A. If Natural Insight uses BHealthy’s data for improving price point predictions only for BHealthy. Explanation: In the GDPR context, a data processor is an entity that processes personal data on behalf of a data controller and according to the controller's instructions. If Natural Insight uses BHealthy’s data solely for the purpose of improving price point predictions specifically for BHealthy, and follows BHealthy’s instructions in this context, it is acting as a data processor.
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