Introduction and significance of the DPIA:
The Data Protection Impact Assessment (DPIA) is a key tool of the General Data Protection Regulation (GDPR) to assess the risks of processing personal data and to take appropriate measures to mitigate the risks. Failure to carry out a DPIA can have significant legal and financial consequences. Here are the possible legal consequences explained in detail:
Fines and sanctions under Article 83 GDPR:
- Category 1 fines:
- Amount of fines: For less serious breaches of the GDPR, including failure to carry out a DPIA, fines of up to EUR 10 million or up to 2% of the total worldwide annual turnover of the previous financial year, whichever is higher, can be imposed.
- Examples of violations: This includes violations of the controller’s obligations under Article 35 GDPR, such as failure to carry out a DPIA or inadequate documentation of the DPIA.
- Category 2 fines:
- Amount of fines: For more serious infringements, fines of up to EUR 20 million or up to 4% of the total worldwide annual turnover of the previous financial year, whichever is higher, may be imposed.
- Examples of violations: If failure to carry out a DPIA results in a serious violation of the rights and freedoms of data subjects, higher fines may be imposed.
Legal and financial risks:
- Litigation:
- Legal action by data subjects: Data subjects whose rights and freedoms have been compromised by the failure to carry out a DPIA can take legal action and claim damages. This can result in significant financial burdens for the company.
- Legal costs: Litigation can be expensive, including attorney fees, court costs and potential damages.
- Loss of business opportunities:
- Loss of trust: Failure to carry out a DPIA can affect the trust of customers, business partners and employees in the company. A loss of trust can lead to a decline in business volume and financial losses.
- Negative coverage: Data protection breaches and non-compliance with GDPR can cause negative media coverage and reputational damage, which can negatively impact business.
Consequences for the persons concerned:
- Impairment of rights and freedoms:
- Loss of privacy: Failure to carry out a DPIA may result in the processing of personal data not being adequately protected, which puts the privacy of the data subjects at risk.
- Misuse of personal data: Inadequate risk mitigation measures may lead to personal data being misused, which may have serious consequences for the individuals concerned.
- Lack of transparency and control:
- Lack of information: Without a DPIA, the necessary transparency about the processing operations and the associated risks is often lacking. This can lead to the data subjects not being sufficiently informed and not being able to exercise control over their data.
- Limited exercise of rights: Data subjects may have difficulty exercising their data protection rights if the risks and measures are not clearly documented and communicated.
Relevant articles of the GDPR:
- Article 35: Data protection impact assessment
- Article 83: General conditions for imposing fines
- Article 82: Liability and right to compensation
- Article 84: Sanctions
Practical examples of legal consequences:
- Tech company case study: A tech company failed to conduct a DPIA before introducing a new facial recognition technology. This resulted in a significant data breach and the company was fined €5 million. In addition, several affected individuals sued for damages, resulting in further financial burdens.
- Healthcare provider case study: A healthcare provider failed to conduct a DPIA for the processing of sensitive health data. This resulted in an inadequate risk assessment and a data breach that compromised patient privacy. The regulator imposed a fine of €2 million and the company suffered significant reputational damage.
