Grammarly GDPR Compliance in Germany: DPA, AVV, and Data Privacy

Grammarly offers a Data Processing Agreement (DPA) for Enterprise customers. German businesses using Grammarly must assess what employee text data Grammarly processes, confirm the DPA is in place as the Auftragsverarbeitungsvertrag (AVV) required under Article 28 DSGVO, and evaluate whether the Betriebsrat must be involved before deployment. Because Grammarly analyzes employee-written text — including emails, contracts, and internal documents — it raises specific Beschäftigtendatenschutz (employee data protection) concerns under German law.

Does Grammarly Have a Data Processing Agreement (DPA)?

Grammarly provides a Data Processing Agreement, but availability depends on your subscription plan:

• Grammarly Enterprise: Full DPA available, covering sub-processors, data deletion timelines, and Standard Contractual Clauses for EU-US transfers.
• Grammarly Business: DPA available on request through the account management process.
• Grammarly Free and Premium: No DPA available. These plans are not suitable for processing personal data of employees or customers under GDPR.

This plan-tier restriction makes Grammarly fundamentally different from tools like HubSpot or Zendesk, which offer DPAs to all paying customers. German companies that deploy Grammarly on Free or Premium plans for employee use are likely in breach of Article 28 DSGVO.

The Grammarly DPA covers:

• Processing scope: Categories of personal data processed (text written by employees, metadata about corrections and suggestions)
• Sub-processor obligations: Third parties Grammarly uses to deliver the service, including cloud infrastructure providers
• EU data transfer mechanisms: Standard Contractual Clauses (SCCs) for transfers of personal data from the EU/EEA to Grammarly’s US infrastructure
• Data retention: How long Grammarly retains text snippets and user data
• Security measures: Technical and organizational measures Grammarly maintains

Grammarly AVV for German Businesses (Auftragsverarbeitungsvertrag)

Under German law, the Data Processing Agreement functions as the Auftragsverarbeitungsvertrag (AVV) required by Article 28 DSGVO whenever a controller engages a processor to handle personal data on its behalf.

Steps for German companies deploying Grammarly Enterprise or Business:

1. Confirm plan eligibility: Verify that your Grammarly subscription includes DPA access before deployment.
2. Execute the DPA/AVV: Request and sign the DPA through your Grammarly account manager or the customer portal.
3. Document in your records of processing: Add Grammarly to your Verzeichnis von Verarbeitungstätigkeiten (Article 30 DSGVO processing register) as a processor for employee communication data.
4. Review Standard Contractual Clauses: Verify that the EU SCCs (Commission Decision 2021/914) are incorporated into the DPA for the EU-US data transfer.
5. Check the sub-processor list: Review Grammarly’s published sub-processor list and update your employee-facing privacy notices accordingly.

Deploying Grammarly without a valid DPA while employees process personal data through the tool constitutes a GDPR violation and exposes the company to supervisory authority fines.

What Data Does Grammarly Collect From Employees?

This is the central GDPR question for Grammarly deployments. Grammarly’s browser extension and desktop app analyze text as it is being written — in real time. Depending on your configuration and plan, Grammarly may process:

• Email content: Text written in Gmail, Outlook, and other email clients
• Document content: Text written in Google Docs, Microsoft Word, and other editors
• Internal messaging: Text composed in Slack, Teams, and similar platforms
• Confidential business content: Contract drafts, proposals, HR correspondence, and legal documents

For German businesses, this creates two distinct GDPR concerns:

• Employee personal data: Grammarly processes data attributable to employees in the course of their work. The legal basis for this processing must be established (typically Art. 6(1)(b) DSGVO — performance of employment contract — or a legitimate interest assessment).
• Third-party personal data: Employees may write about or to third parties (clients, candidates, patients), making Grammarly a processor of that third-party personal data too.

Grammarly allows administrators to configure snippet storage settings — reducing the amount of text that Grammarly retains on its servers. For sensitive industries (legal, medical, financial), disabling text storage is strongly recommended and should be documented as a technical measure in your DPIA.

Is Grammarly GDPR Compliant? EU Data Residency and Subprocessors

Grammarly’s infrastructure is primarily hosted in the United States. Unlike some enterprise software vendors, Grammarly does not currently offer an EU data residency option that routes all processing to EU-based servers.

Key facts on data transfers:

• Standard Contractual Clauses: Required for any EU-US data transfer. Grammarly incorporates SCCs into its Enterprise DPA as the transfer mechanism under Chapter V GDPR.
• No EU data center option: As of 2026, Grammarly does not offer the ability to elect EU-only processing. All user text passes through US-based infrastructure.
• Sub-processors: Grammarly uses third-party cloud infrastructure providers (including AWS and Google Cloud). The sub-processor list is available to Enterprise customers and should be reviewed against your data transfer impact assessment requirements.

For German companies with strict data localization requirements — common in healthcare, banking, and public sector procurement — the absence of an EU data residency option is a significant factor in the procurement decision. Conduct a Transfer Impact Assessment (TIA) as part of your DPIA if deploying in these sectors.

Grammarly Enterprise vs. Business — GDPR Compliance Differences

Feature	Grammarly Enterprise	Grammarly Business	Free/Premium
DPA/AVV available	Yes	On request	No
Custom data retention	Yes	Limited	No
Admin controls (snippet storage)	Yes	Partial	No
SSO/centralized provisioning	Yes	Yes	No
Sub-processor list access	Yes	On request	No
GDPR-ready for employee deployment	Yes (with DPA)	With DPA + review	No

For German enterprises with more than 20 employees, Grammarly Enterprise is the only plan tier that provides the full set of controls needed for GDPR-compliant deployment.

Works Council (Betriebsrat) Requirements for Grammarly

Grammarly raises specific co-determination issues under German labor law. The Betriebsrat has mandatory participation rights under §87(1) No. 6 BetrVG for technical systems capable of monitoring employee behavior or performance.

Grammarly qualifies as such a system because it:

• Analyzes every word employees write in real time
• Generates correction statistics and writing quality metrics per user
• Maintains logs of writing activity across integrated applications
• Can reveal patterns in an employee’s communication style, responsiveness, and writing volume

Before deploying Grammarly in any organization with a works council, you must:

1. Inform the Betriebsrat about the planned introduction of Grammarly, including which features will be activated and which data Grammarly collects
2. Negotiate a Betriebsvereinbarung (works agreement) defining permissible use cases, the scope of data collection, and any restrictions on admin access to per-user writing statistics
3. Document the agreement before going live — deploying Grammarly without works council involvement can result in an injunction against the system’s use

The works agreement should specifically address whether administrators will have access to individual-level writing statistics or only aggregate team data, as this determines the monitoring risk under BetrVG.

Compliance Checklist for German Companies Deploying Grammarly

Use this checklist before going live with Grammarly in a German business context:

• Plan eligibility confirmed: Enterprise or Business plan with DPA access verified
• DPA/AVV signed: Grammarly DPA executed with your account manager
• SCCs confirmed: Standard Contractual Clauses incorporated into the DPA for EU-US transfers
• Sub-processor list reviewed: Current list reviewed, privacy notices updated
• Records of processing updated: Grammarly added to Article 30 DSGVO processing register
• Employee privacy notice updated: Grammarly’s data processing disclosed in employee-facing privacy notices
• Snippet storage configured: Text retention disabled or minimized in Grammarly admin settings
• DPIA conducted: Required for large-scale processing of employee text data — document transfer risks and mitigations
• Transfer Impact Assessment: Completed for EU-US text data transfers given absence of EU data residency
• Betriebsrat informed: Works council notified before deployment
• Betriebsvereinbarung concluded: Works agreement governing permissible use and data access signed

Compound Law assists with DPA review, SCC gap analysis, DPIA preparation, Transfer Impact Assessments, and Betriebsrat negotiations for Grammarly deployments across Germany and the DACH region. See our compliance services for details.

Compare Grammarly with Cursor and Copilot for Microsoft 365, both of which process employee-authored code or text and raise comparable Betriebsrat and GDPR considerations.

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Frequently Asked Questions

Is Grammarly GDPR compliant in Germany?

Grammarly can be used in a GDPR-compliant manner, but only under Grammarly Enterprise or Business plans where a DPA is available. Free and Premium plans lack a DPA and are not suitable for processing employee or customer personal data. Compliance also requires Standard Contractual Clauses for EU-US data transfers, updated records of processing, and — in organizations with a works council — a Betriebsvereinbarung before deployment.

Does Grammarly have an AVV (Auftragsverarbeitungsvertrag)?

Yes, but only for Enterprise customers (and on request for Business customers). Grammarly’s Data Processing Agreement functions as the AVV required under Article 28 DSGVO. Free and Premium plans do not include a DPA. If your organization uses Grammarly without an Enterprise or Business subscription, you cannot lawfully process employee personal data through the tool.

Can I use Grammarly for confidential legal documents?

Use caution. Grammarly analyzes text as you write it, which means confidential content — including legal documents, HR correspondence, and contracts — passes through Grammarly’s servers. In Enterprise plans, snippet storage can be disabled to reduce retention risk. For highly sensitive content, legal and compliance teams should configure Grammarly to minimize storage or exclude specific applications from the browser extension’s scope.

Does Grammarly store my employees’ text?

By default, Grammarly stores text snippets to improve its suggestions. Under Grammarly Enterprise, administrators can configure reduced or disabled snippet storage. This setting should be reviewed and documented as part of your data minimization obligations under Article 5(1)(c) DSGVO. Check your current plan’s admin settings and confirm the storage configuration with your account manager.

Do I need a Betriebsrat agreement to use Grammarly?

If your organization has a works council (Betriebsrat) and Grammarly will be deployed for employees, co-determination rights under §87(1) No. 6 BetrVG are almost certainly triggered. Grammarly monitors employee writing activity in real time, which qualifies as a technical monitoring system under German labor law. A Betriebsvereinbarung must be negotiated and signed before the tool goes live. Deploying without works council involvement risks an injunction against the system’s use.