Data Protection Impact Assessment#

Every organization collects and stores personal data and information, which exposes individuals to risk. Having a systematic process in place that helps businesses identify, assess, and mitigate the privacy risks associated with their data processing activities will help them ensure that their information processing operations are conducted in an ethical and responsible manner. This article explores the compliance requirements of a DPIA, including events triggering a DPIA, the process involved, benefits to be gained, timing and elements to be included.

Understanding a Data Protection Impact Assessment#

A DPIA is a methodical approach to analyzing data processing activities, aiming to identify and mitigate data protection risks. These assessments encompass both compliance and broader risks to individuals’ rights, including societal and economic impacts. The core emphasis of the assessment revolves around the potential harm that individuals might encounter due to the processing, encompassing various dimensions such as physical, material, and non-material impacts. These potential adverse consequences encompass a range of issues including but not limited to discrimination, fraudulent activities, identity theft, breaches of confidentiality, and the relinquishing of control that the data subject has over their own personal data. Assessment involves gauging the likelihood and severity of impacts on individuals. A DPIA does not require eliminating all risks, but rather documenting and justifying any remaining ones.

DPIAs are obligatory for all high-risk processing, yet they offer wider benefits, such as compliance, financial gains, and reputation enhancement. They establish accountability and trust. A DPIA can address individual processes or groups of similar ones.

Integrating a DPIA into organizational processes is vital, and the results should ideally shape plans. DPIAs are ongoing, subject to regular reviews, ensuring continuous alignment with evolving circumstances. A DPIA is critical in the establishment of an organization’s compliance policies and procedures.

DPIA vs Privacy Impact Assessment#

Data Protection Impact Assessments (DPIA) and Privacy Impact Assessments (PIA) share similarities, yet they diverge in certain aspects. Both serve as foundational evaluations conducted during a project’s lifecycle to comprehend potential privacy risks.

A Privacy Impact Assessment (PIA) concentrates on scrutinizing an organization’s acquisition, utilization, distribution, and safeguarding of personally identifiable information, with a focus on addressing prevailing vulnerabilities. Conversely, a DPIA operates under the regulatory framework of GDPR and is focused on identifying and mitigating high-risk activities associated with the manipulation of personal data.

A DPIA is mandatory when novel technology or data processing could potentially affect the rights of data subjects. They involve an analysis of data management methods prior to processing, uncovering potential vulnerabilities.

Similar to PIAs, DPIAs confirm the existence of any remaining risks after assessment. While DPIAs are obligatory for all relevant organizations across private and public sectors, PIAs primarily pertain to the public sector within specific legal jurisdictions. A DPIA becomes necessary when new technology or data processing presents a considerable risk.

Where is a Data Protection Impact Assessment Required?#

The data protection impact assessment (DPIA) was introduced by the General Data Protection Regulation (GDPR) in the European Union (EU) and applies to all organizations with an established presence in the EU, where they are processing the personal data of individuals in the EU. Many other countries have also introduced the requirement for a DPIA within their own privacy laws, which mirror the GDPR’s regulations, including the United States, where DPIA is mandated under each state’s privacy laws. China introduced its own data privacy law, Personal Information Protection Law (PIPL) as recently as 2021, which also includes a requirement for a DPIA. Although a DPIA is not a requirement in all parts of the world, they are becoming increasingly prevalent and it is considered good practice for an organization to do a DPIA where any significant project involves data processing of personal information.

When to Conduct a DPIA#

Prior to embarking on any processing that carries the potential for considerable risk, a Data Protection Impact Assessment (DPIA) is essential. While the exact risk magnitude may not be gauged initially, organizations must analyze factors that could potentially have a considerable impact on individuals. Specifically, under GDPR guidelines, a DPIA becomes obligatory when an entity plans to engage in systematic and extensive profiling with significant outcomes, engage in large-scale processing of special category or criminal offense data, or large-scale and systematic monitoring of a publicly accessible areas on a considerable scale.

There are a number of additional circumstances for which an organisation should conduct a DPIA and in many cases, it will be mandatory to do so. To evaluate high-risk processing and the need to undertake a DPIA, organizations can turn to guidelines outlined in the GDPR and provided by the Information Commissioner’s Office, delineating several criteria, which include:

  • Evaluation or scoring, particularly related to personal aspects

  • Automated decision-making with legal or equivalent effects

  • Handling sensitive or highly personal data

  • Processing data extensively on a large scale

  • Innovatively employing technology

  • Processing impeding rights, service access, or contractual obligations

  • Utilizing profiling or special category data for decisions on service access

  • Collecting personal data without offering a privacy notice

  • Processing data that jeopardizes individuals’ physical health or safety in security breaches

  • any application of artificial intelligence to the processing of personal data

  • any automated decision-making about an individual’s ability to access a product or service

  • any processing of biometric or genetic data (other than the use of genetic data for the delivery of primary health care)

  • any combination or matching of data from multiple sources

  • any geolocation or behavioural tracking

  • targeted marketing, profiling, or automated decision-making based on personal data of children or other vulnerable individuals, and any online services of any nature offered directly to children.

While these guidelines indicate a DPIA necessity when two or more criteria are met, even a single criterion could trigger the need for a DPIA in a business context. Even in instances where explicit high risk is not evident, it is judicious to undertake a DPIA for all significant new projects involving personal data.

DPIA Exemptions#

There are certain circumstances where a DPIA may not be required, including:

  • When the processing is not expected to lead to significant risks to individuals’ rights and freedoms

  • If the nature, scope, context, and purposes of the processing closely resemble those of previously assessed processes, the findings of a prior DPIA can be applied

  • When a processing operation is legally grounded in the European Union and has stipulated that an initial DPIA is unnecessary, provided that the legal basis established the DPIA standards during its inception

  • If the processing appears on the discretionary list (defined by the supervisory authority) of operations exempt from DPIA requirements.

An Effective DPIA Process#

Organizations should initiate the DPIA early in the project, aligned with planning and development, involving the data protection officer and other relevant stakeholders. Though not compulsory under GDPR, publishing the DPIA offers benefits like demonstrating compliance and building trust. For best practices, the business should consider publishing all DPIAs, redacting sensitive details, if necessary.

At a minimum, the DPIA must include the following mandatory information:

  • Thoroughly outlining the intended processing and its objectives

  • Evaluating the necessity and proportionality of the planned processing in respect of its goals

  • Identifying and evaluating pertinent risks

  • Describing the safeguarding measures to be implemented, including security safeguards and other steps demonstrating GDPR compliance.

The process for conducting a DPIA can be adaptable to suit an organization’s needs and should include the following steps:

1. Identifying the need and its legal basis: Determining whether or not to undertake a DPIA can be done most efficiently through the use of software, which can quickly identify if a DPIA is required or not.

2. Description of the processing: Details to be included are the nature, scope, context and the purposes of the processing to be conducted.

3. Consulting key stakeholders: It is required to advise individuals of the intended process and document their views.

4. Assessing necessity and proportionality: Necessity mandates that processing operations should solely serve the processing purpose. Proportionality necessitates collecting only relevant and adequate personal data for the processing’s intended purpose.

5. Risk identification and assessment: Determining high risk involves examining potential harm inflicted upon individuals, having consideration for the likelihood and severity of that harm, including impeded rights, restricted access to services or opportunities, loss of control over personal data usage, discrimination, identity theft, financial loss, damage to reputation, physical harm, compromised confidentiality, and re-identification of pseudonymized data.

6. Identifying risk mitigation measures: Consider ways to reduce risk, while taking into account the associated costs and benefits of each measure, including avoiding the collection of specific data categories, implementing further technological security protocols for data protection, providing staff with training to anticipate and manage risks, employing data anonymization or pseudonymization techniques.

7. Record outcomes: To finalize the DPIA, all key findings should be documented, including the status of each identified risk, the remaining residual risk after any additional measures are implemented and the need to consult with the ICO, if applicable.

Subsequent Actions Following DPIA Completion#

Should the organization determine that the intended processing could lead to a substantial risk, it might be necessary to engage with the relevant supervisory authority. In such instances, if risks are not satisfactorily mitigated, the supervisory authority possesses the power to mandate alterations or prohibit the proposed processing.

Irrespective of the outcome, the organization must execute any risk mitigation or compliance measures pinpointed in the DPIA, keeping comprehensive records of these actions. The DPIA should ideally be maintained as a dynamic document within the organization’s compliance framework. Regular reviews of DPIAs are advisable to ensure their relevance, and they might need to be repeated in case of substantial alterations to the organization’s personal data processing regarding the nature, scope, context, or goals.

Other Benefits of a DPIA#

Performing a DPIA will enhance an organization’s awareness of data protection risks linked to a project. This, in turn, will refine project design and facilitate effective communication on data privacy risks with relevant stakeholders. Key advantages of conducting a DPIA include:

  • Ensuring GDPR compliance and avoiding penalties

  • Building public trust by enhancing communication in respect of data protection concerns

  • Safeguarding users’ data protection rights

  • Cost benefits from streamlining operations and reducing unnecessary data collection and processing

  • Mitigating data protection risks for the organization

  • Integrating data protection safeguards into early-stage project design, thus minimizing costs and disruptions.

Final Words#

Conducting a Data Protection Impact Assessment is a pivotal step towards ensuring robust data protection practices within any organization. By systematically identifying and mitigating potential risks associated with data processing activities, a DPIA not only helps organizations comply with regulatory requirements, such as the GDPR, but also fosters a culture of transparency, accountability, and trust. Through thorough analysis, evaluation, and documentation of risks, organizations can make informed decisions that prioritize the rights and privacy of individuals while enhancing the overall quality of their projects and services. As the landscape of data protection continues to evolve, integrating DPIAs into standard operating procedures will prove instrumental in maintaining the balance between innovation and safeguarding individuals’ personal information. By embracing a DPIA as an integral part of data management practices, organizations can navigate the intricate realm of data protection with confidence, resilience, and a commitment to ethical data handling.