Who is the data controller?source
Microsoft. Their documentation reads "Clarity is GDPR-compliant as a data controller."
A processor handles data on your instructions. A controller decides for itself. Installing Clarity is closer to introducing your visitors to Microsoft than to hiring a vendor.
Will Microsoft sign a DPA?source
No. "We are not able to sign any additional terms or contracts (e.g., DPAs)."
A data processing agreement is the standard instrument for this relationship, and many procurement and security reviews require one. There is no version of Clarity that comes with a signed DPA, at any price, because there is no price.
Can you delete one person’s data?source
No. "You need to delete the entire project to delete user’s data."
A GDPR erasure request for a single visitor cannot be honoured without destroying the entire project’s history. In practice that means it cannot be honoured.
How long is it kept?source
Recordings for 30 days. Favourites and "randomly selected sample of recordings" for up to 9 months.
The 30-day figure is the one usually quoted. The 9-month tail is the one that matters for a retention schedule, and it is a sample you did not choose.
Where is it stored?source
"Clarity data is stored in one of Microsoft’s US data centers."
For an EU or UK operator this is a transfer out, and it is not configurable. There is no EU-region option to select.
What are the cookies for?source
"Any third-party cookies used by Clarity are to support operational purposes like advertising." The visitor opt-out Microsoft points to is the Digital Advertising Alliance’s, at optout.aboutads.info.
The opt-out being an advertising-industry mechanism tells you which category this sits in. That is not a leak or a scandal; it is the arrangement, stated plainly by them.
What is masked by default?source
PII is detected and masked in the browser, so it "never reaches Clarity servers". The mode is one of "relaxed, balanced (default), or strict".
This part is genuinely well built, and better than a lot of paid tools. Worth knowing the default is balanced rather than strict, so the strictest setting is one you opt into.