How To Perform a Data Protection Impact Assessment (DPIA)?

In a technologically-dependent world infested with cybercrime, protecting personal information is now more important than ever. Individuals and businesses are always vulnerable due to the growing hazards that endanger data integrity. Many different and intricate risks exist, such as identity theft and unauthorized access. These can significantly harm your business and seriously injure your finances and credibility.

This is why you should urgently recognize the importance of Data Protection Impact Assessments (DPIA) as an indispensable tool to identify and mitigate any risks associated with data protection that may arise from any project undertaken by your company and impact your company or the people it interacts with. DPIAs enable organizations to comply with GDPR laws strategically by negotiating the complexity of cybersecurity risks.

Situations in which a DPIA may be appropriate involve a bank using a credit reference database to screen its clients, a hospital intending to use patient health data to create a new health information database, or a bus operator preparing to install on-board cameras to track the behavior of passengers and drivers.

However, organizations are not required to perform a DPIA under the GDPR for each privacy-related processing operation. In contrast, a DPIA is needed when the company’s data processing will likely endanger people’s rights and freedoms. When a DPIA is not completed as stipulated by the official rules, there may be legal repercussions, including severe fines from the European Data Protection Board. In this blog, we will briefly overview a data protection impact assessment covering what it is, who should be involved, what its benefits are, and the steps to conduct one successfully.

What is a Data Protection Impact Assessment (DPIA)?

A data protection impact assessment (DPIA) is a mechanism that organizations can use to identify risks that could violate compliance and examine how data processing systems, procedures, or technology influence people’s privacy. The General Data Protection Regulation (GDPR), implemented in May 2018 by the European Union, mandates that companies conduct data protection impact assessments (DPIAs) before engaging in certain data processing activities that pose a high risk to the rights and freedoms of individuals.

When a business starts any project that could put people’s personal information at high risk, the GDPR mandates a DPIA. Failure to complete a data protection impact assessment may result in fines for organizations of up to 2% of their yearly global revenue, or 10 million euros, whichever is higher.

DPIAs are one of the most crucial aspects of the GDPR since it is primarily concerned with providing individuals with greater control over their data and creating consistent data protection regulations, according to several legal experts. Despite being limited to the European Union, the GDPR’s provisions — such as the DPIA requirements, are being used globally by many non-EU businesses that conduct business internationally.

As per the GDPR, the onus of conducting a data protection impact assessment rests with the “controller,” denoting the entity or organization that decides on the objectives and techniques of handling data. The European Commission, the EU’s legislative branch, states that a DPIA is required in cases where a systematic assessment of a person’s characteristics, including profiling, an extensive processing of private information, or a thorough surveillance of public spaces, needs to be done.

Who Should Be Involved in Conducting a Data Protection Impact Assessment?

Ensuring the data protection impact assessment is conducted is the data controller’s responsibility. While it might be assigned to someone else, either inside or outside the company, the data controller is ultimately in charge. The project team, or anyone with the necessary experience and understanding of the project in question, should lead the DPIA.

If your company lacks the necessary internal knowledge and experience, or if a certain project is expected to have a high risk or significantly impact many people, consider hiring outside experts to conduct the data protection impact assessment.

Under Article 35 of the GDPR, a data controller must employ a designated Data Protection Officer (DPO) to consult about the DPIA. The DPIA process should also include documentation of the advice and the decisions made in response. If a data processor is engaged in the processing, they should help with the DPIA and supply any required information. A data protection officer (DPO) is an appointed individual who guides data protection procedures inside the organization. A staff member or an outside service provider can serve as the DPO.

The GDPR must appoint a DPO in the following situations:

• For public entities that process data, except courts operating by their role;
• In case the organization’s primary functions involve data processing and, due to their nature or goals, need a large-scale, routine, and systematic surveillance of data subjects or
• In this case, the organization’s primary functions include processing special categories of data (as defined by Article 9) and personal data related to criminal convictions (as determined by Article 10 of the GDPR) on a significant scale.

Sounds complicated? While conducting a DPIA may be complex, the benefits can make it seem worth the money and effort. Let’s check out what advantages a data protection impact assessment can bring your organization.

Benefits of a Data Protection Impact Assessment (DPIA)

Performing a DPIA can raise awareness of any project’s data protection issues inside your organization. This can improve the project’s design and your ability to inform pertinent parties about data privacy threats. A data protection impact assessment can:

• Enhance public trust through better information sharing on data privacy concerns
• Ensure that your company complies with GDPR to avoid trouble.
• Guarantee that there is no possibility of a violation of your users’ rights regarding data protection.
• Enable “data protection by design” to be incorporated into future initiatives by your organization.
• Lower operating expenses by removing pointless data collecting and processing and streamlining information flows inside a project as well as the risks to your organization associated with data protection
• Minimize costs and disruptions, including data protection measures early in project planning.

Data protection by design refers to integrating data privacy-enhancing technology and features into project designs. It can contribute to better and more affordable privacy protection for personal data.

Service settings must be automatically data protection-friendly to implement data protection by default.

The GDPR does not prescribe a precise procedure for conducting a DPIA, allowing for flexibility and scalability in accordance with your organization’s demands. However, if this is your first time, you can follow the steps outlined in the section below.

Steps To Conduct a Data Protection Impact Assessment (DPIA)

Here are a few basic steps to guide you through the process of conducting a DPIA successfully:

Step 1: Identify the Need for a DPIA

When you begin to evaluate the need for a data protection impact assessment, you must first identify what kind of data processing you are carrying out for your organization. The criteria to determine whether a DPIA is mandatory include profile scoring, automated legal decision-making, systematic monitoring of data subjects, sensitive data handling, large-scale data processing, combining datasets, data transfer outside the EU or the UK, and more.

You need to ensure to document the following prospects of the processing:

• Nature — How do you intend to use the information?
• Purpose — Why does your company wish to process the data?
• Scope — What kind of data will be handled?
• Context — Which internal and external elements could affect beliefs or impact?

This should happen as early in the project’s lifespan as is practical. You must ascertain the necessary resources, the persons who will be engaged, and the duration of the DPIA procedure.

The data protection impact assessment may need to be a continuous process that is reviewed or repeated as the project advances because the nature and operational implications for data privacy may need to be evident at an early point of the planning process.

Step 2: Describe the Information Flows and Their Purpose

This step involves specifying how personal information will be gathered, stored, used, and deleted as part of the DPIA project early on. This exercise should also determine the kind of information that will be utilized for the project and who will have access to it.

Getting an early grasp of how information will be used can be used to recognize the potential threats to data privacy that a project may provide and figure out possible ways to reduce those risks. The following questions can help you attain the information required:

• How is the data going to be gathered and used?
• How and where is the data going to be stored?
• Is there an involvement of any high-risk data categories?
• Where is the data being gathered from?
• Is the data going to be stored with any third parties?
• How many people are affected by the data collection?
• How much data is going to be gathered?
• What are the guidelines being followed for data retention?
• Where are the data processing activities going to occur?

Once all the data is collected, the data controller needs to describe the purpose of the data processing activities related to the project’s objectives. Each data processing activity should be explained in detail, followed by how it will impact the consumer and how it can be leveraged for the project.

Step 3: Consider Consultation

Create a consultation mechanism to get the opinions of those specific people or their representatives if the DPIA concerns the processing of personal data of current contacts such as current customers or workers.

It could be necessary to conduct more extensive public consultations or focused research if the DPIA includes a plan to gather the personal data of people you still need to identify. This could include conducting market research with a target audience or asking relevant consumer or campaign organizations what they think.

You must explain why you disregarded someone’s opinion if your DPIA decision differs from theirs. If you use one, you should ask a data processor for help and information. It would help if you mandated assistance from processors in your contracts with them. Every relevant stakeholder, especially the ones in charge of information security, should be consulted. In addition, consider consulting a lawyer or, if necessary, other impartial specialists like IT specialists, sociologists, or ethicists. There are no particular prerequisites to follow, though.

Step 4: Assess Necessity and Proportionality

In this stage, you should contemplate whether your plans can truly help achieve your goals and whether there is another reasonable, less invasive approach to accomplish the same goal to determine the need and proportionality of your actions.

Since this is a useful indicator of necessity and proportionality, you must be able to demonstrate how you maintain compliance with data privacy laws. Specifically, you should include pertinent information about the following items:

• Do laws in your location authorize this data collection?
• Are the proper procedures for consent in place?
• Are you putting any data subjects at unnecessary risk?
• Does the project’s goal require data processing to be met?
• How are the rights of consumers being maintained?
• Can we reduce how much customer data is used?
• Have similar projects in the past undergone comparable processing? If yes, were vulnerabilities found and fixed?

Step 5: Identify and Evaluate Risks To Personal Data

This step involves considering the possible effects on people and any material, emotional, or physical hurt or damage your processing may produce. You should examine whether the processing could, in particular, help with the following:

• Incapacity to use rights (such as the right to privacy, among others); incapacity to use services or possibilities;
• Loss of confidentiality related to sensitive information;
• Loss of control over how personal information is used;
• Discrimination, identity theft, or fraud;
• Financial pr reputational loss;
• Re-identification of data that has been pseudonymized; or,
• Any other notable economic or social disadvantage.

An evaluation of the security risks, including risk factors and the possible consequences of each kind of breach (such as unauthorized access to, alteration of, or loss of personal data), should be included. It would help if you considered the likelihood and the seriousness of the potential injury to determine whether the risk is high. Harm does not always have to occur for something to be deemed a risk or a high risk. Any substantial chance of serious damage may be sufficient to meet the criteria for high risk, even though it must be more than distant. On the other hand, a high likelihood of broad but less severe harm could still qualify as high risk.

You need to evaluate the hazards objectively. When considering the possibility and seriousness of threats, it is useful to use an organized matrix:

The risk assessment process is organized in the matrix highlighted above. You can modify a different approach that your business uses for the same objective. Consider the risks associated with your company, like the potential for legal action, harm to your reputation, or a decline in public confidence.

Step 6: Determine Mitigating Measures for Identified Risks

Once you understand the project’s possible hazards, carefully plan, develop, and implement the necessary risk mitigation strategies.

Data security tools can assist you in making sure that

• The required security measures are in place to stop external or internal actors from gaining unauthorized access to personal data;
• Policies for data retention are in place to ensure that data that is no longer needed is deleted;
• Technologies for discovery and monitoring give information on the locations of personal data, who may access it, how it is utilized, and how it moves within the company; and,
• Remediation tasks (clearing out access and removing redundant data) can be automated at scale.

Some options for risk reduction include refraining from collecting specific data types, limiting the processing scope, and minimizing retention periods. Implementing advanced technological security measures, staff training for proactive risk management, and adopting anonymization or pseudonymization practices are crucial steps. Writing internal guidelines to mitigate potential risks, adopting alternative technologies, establishing clear data-sharing agreements, updating privacy notices, providing opt-out options, and deploying new systems to facilitate individual rights exercises further contribute to a comprehensive strategy for enhancing data security.

Last, it is also imperative to record the information protection risks and how a particular mitigation solution will help address them.

Step 7: Conclude the DPIA

Following identifying potential risks, it is essential to document the subsequent actions meticulously. This includes detailing the additional measures slated for implementation and categorizing each risk as eliminated, reduced, or accepted. After incorporating supplementary measures, the assessment should encompass an evaluation of the overall ‘residual risk.’ Furthermore, a determination should be made regarding the necessity of consulting the Information Commissioner’s Office (ICO). This comprehensive recording process ensures transparency in risk management, facilitates accountability, and forms a foundational component of an effective risk mitigation strategy.

It is only sometimes necessary to mitigate every risk. Considering the advantages of processing and the challenges of mitigating, some risks (even a high risk) are acceptable. Before proceeding with the processing, you must speak with the ICO if there is still a high risk. You should also ask the DPO for advice on whether the processing is compliant and can proceed as part of the sign-off procedure, and you should record their response. You must document your reasoning if you choose not to heed their counsel. Any justifications for deviating from the opinions of specific people or other consultees should also be noted. This can also be considered as the process of approval.

Lastly, you need to create a DPIA report. It should contain the following details:

• An in-depth explanation of the project’s goals;
• An evaluation of hazards to consumer privacy and data protection;
• An assessment of the extent and needs of data processing; and,
• An explanation of the organization’s risk mitigation and GDPR compliance measures.

Whether the GDPR mandates it or not, it is recommended practice to publish DPIAs in full or in part. This shows accountability and openness to all stakeholders and promotes trust in your processing processes.

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