Data Processing Requirements for Tech Companies According to NDPR

Key Takeaways

1. Understand the legal basis of personal data processing under Nigeria's Data Protection Act and its extension to tech companies.

2. Misunderstanding or disregard of NDPR and NDPA data processing requirements for tech companies exposes organizations to legal sanctions, data breaches, and loss of public trust.

3. Establish a clear legal basis for all data activities, document compliance steps, and implement user-centric consent management systems.

Introduction

In Nigeria's fast-growing technology ecosystem in fintech, e-commerce, health tech, and logistics, data is innovation currency. But with all such data, capability comes legal responsibility.

The Nigeria Data Protection Act (NDPA) of June 2023 superseded the Nigeria Data Protection Regulation (NDPR) of 2019, which created a unified, new data privacy framework. For more information on the transition, read our blog on NDPR to NDPA-GAID: Nigeria’s New Era of Data Protection. The Act aligned with global best practices such as the EU's GDPR, creating a new benchmark for compliance.

For tech companies, startups, and multinationals alike, compliance is obligatory rather than optional. Under the NDPA, all data processing activities involving personal data have to be supported by a good legal basis. Failure to comply will likely lead to hefty fines and customer distrust


 

What are the Legal Grounds for Data Processing Under the NDPA?

According to Section 25 of the Nigeria Data Protection Act (NDPA), may be processed only if it falls within one of six legitimate bases. Technology companies must specify, record, and communicate which legal basis applies to every processing activity.

These lawful bases shape how information is collected, stored, and processed and outline how user rights are treated and safeguarded. The six primary lawful bases and their effects on technology companies are listed below.

1. Consent

Consent is the foundation of ethical data handling. For technology companies that collect discretionary or behavioral data, such as user behavior, location, or marketing interest, explicit consent has to be given.

The NDPA requires that:

1. Users must be informed about what data is collected and why.

2. Consent must be documented and revocable at any time.

3. Businesses must offer accessible mechanisms for users to withdraw consent, such as dashboards or opt-out settings.

 

2. Contractual Necessity

This applies when processing is necessary to fulfill a contract. For instance, an e-commerce platform processing a customer’s address and payment details for order delivery falls under this ground.

Companies must ensure data collection is limited strictly to what’s required for the contract and not reused for unrelated purposes.

3. Legal Obligation

The processing is also lawful where it is necessary because of a legal duty. The examples are keeping records for tax or pension purposes.

In NDPA, computer technology companies must be in a position to quote the specific law or regulation necessitating such processing. This is for purposes of accountability and regulatory auditing.

4. Public Interest or Official Authority

This would primarily be used in government departments or companies running on official commissions, like public health programs or national identification systems.

A tech firm running a government vaccination site, for example, may rely on this ground, provided the purpose is narrowly defined in law and processing is strictly required for that purpose.
 

5. Legitimate Interest

This flexible legal basis applies when data processing is necessary for a legitimate business interest of a firm, e.g., fraud detection, security, or systems optimization, provided it does not exclude individuals' rights.

Firms must conduct and maintain a Legitimate Interest Assessment (LIA) to support this basis under NDPA.

How to Implement Data-Driven Compliance for Tech Companies

How can tech companies implement data compliance? In a bid to continue to be compliant and mitigate risk exposure, technology companies must integrate data protection into their procedures by doing the following:

1. Document Legal Basis: Record the legal justification for every processing activity.

2. Conduct Data Protection Impact Assessments (DPIAs): Especially for high-risk activities that affect user privacy.

3. Maintain Processing Records: Keep accurate logs of all processing operations, categories, and retention periods.

4. Train Employees: Ensure all staff understand NDPA requirements and responsible data handling practices.

5. Implement User Controls: Provide users with easy-to-use tools to manage consent and preferences.
 

ALSO READ: From NDPR to NDPA–GAID: Nigeria’s New Era of Data Protection

What are the Common Mistakes and Legal Risks Tech Companies Make? 

Many companies still fall short of compliance data processing requirements due to:

1. Implied consent: Assuming user consent through inaction or bundled terms.

2. Misuse of legitimate interest: Relying on it without a proper balancing test.

3. Outdated legal grounds: Failing to update processing justifications as business purposes evolve.

These missteps can lead to hefty fines, suspension of operations, or reputational damage under NDPA.

What are the Legal Consequences of Non-Compliance with Data Processing Requirements for Tech Companies?

What happens if a tech company like Google or Amazon fails to meet the data processing requirements for tech companies? The Nigeria Data Protection Commission (NDPC) enforces the NDPA with powers to:

1. Impose financial penalties

2. Suspend or restrict data processing, and

3. Initiate civil actions for privacy violations.
 

Non-compliance not only risks penalties but also undermines customer trust, which is increasingly tied to business credibility and market competitiveness.

INTERESTING READ: Best Practices for Data Protection and Privacy

FAQ 

Q1: What tech companies have the most data?

The 7 most data-rich companies in the world are

1. Google

2. Facebook

3. Amazon

4. IBM

5. Cloudera

6. Kaggle

7. General Electric (GE)

Q2: How do tech companies store data in 2025?

Tech companies use storage systems like Hadoop Distributed File System (HDSF), Amazon S3, Azure Blob storage, and Google Cloud Storage. As opposed to single-server storage, tech companies prefer these storage systems because of their reliability, speed, and scalability. If a company used just one server and it failed (due to hardware issues, power outage, or natural disaster), all the data and services would be lost.

Q3: What do big tech companies do with users’ information?

Big tech companies collect users’ information, such as personal info (name, email, etc.), users’ usage data, and device and technical data, and use this data to personalize services and show you targeted ads. They may also share or license aggregated/anonymized data and comply with legal or government requests.

Q4: What is Section 35 of the Nigeria Data Protection Act?

Section 35 outlines the obligations of data controllers to ensure the accuracy, integrity, and confidentiality of personal data during processing.

Q5: What is Section 65 of the Nigerian Data Protection Act?

Section 65 specifies the enforcement powers of the Nigeria Data Protection Commission (NDPC), including audits, sanctions, and corrective measures.

Q6: What is Section 25 of the Nigeria Data Protection Act?

Section 25 defines the lawful bases for processing personal data, which include consent, contractual necessity, legal obligation, public interest, and legitimate interest.

Q7: Does NDPR require a data protection officer?

Yes. Both the NDPR and NDPA require data controllers and processors whose activities involve large-scale data handling to appoint a Data Protection Officer (DPO) to oversee compliance efforts.

Conclusion

For tech companies, compliance with the NDPA is more than a legal checkbox; it’s a strategic advantage. Establishing valid legal grounds for every data activity fosters transparency, accountability, and user trust.

By integrating structured compliance frameworks, appointing qualified Data Protection Officers, and leveraging automated solutions for record management, tech companies can secure user data while remaining audit-ready.

As regulatory expectations around data privacy evolve, Youverify remains dedicated to setting the benchmark for compliance excellence. Our technology not only simplifies NDPR adherence but also builds the foundation for customer trust, data integrity, and long-term growth.  Book a demo today to learn more about how youverify can help you stay compliant and audit-ready.