Overview

This article ensures that data subjects are not subject to decisions based solely on automated processing, including profiling, which have legal effects or significant impact on them. Exemptions apply when the decision is necessary for a contract, authorized by law, or based on explicit consent. In such cases, organizations must implement appropriate safeguards to protect the data subject’s rights.


Key Principles

  • Prohibition by Default: Decisions with legal or significant effects cannot be fully automated without safeguards.

  • Exemptions: Automated decisions are allowed when necessary for contractual obligations, legal requirements, or explicit consent.

  • Data Subject Rights: Individuals must be able to obtain human intervention, express their point of view, and contest the decision.

  • Transparency and Safeguards: Organizations must inform data subjects about automated decision-making and implement measures to protect rights.

Organizational Applicability

This article applies to all organizations processing personal data within the EU:

  • Controllers using automated processing systems that influence legal or significant outcomes for individuals.

  • Public and private sector entities conducting profiling for risk assessment, credit scoring, or automated decision-making.

  • Teams responsible for data analytics, AI/ML systems, compliance, and customer decision processes.

Implementation Requirements

  • Identify processes where automated decisions are made and assess their impact on data subjects.

  • Implement procedures to ensure human review, contestation, or intervention options.

  • Document the lawful basis for exemptions and maintain records of safeguards applied.

  • Inform data subjects about automated decision-making and their rights.

Implementation Guidance

  • Integrate human review points into automated decision workflows.

  • Provide clear notices about profiling and automated decisions to data subjects.

  • Ensure consent or contractual/legal justification is documented where exemptions apply.

  • Periodically audit automated decision systems for compliance and fairness.

Periodic Review

  • Frequency: Annually or when new automated decision systems are implemented.

  • Responsible Role: Data Protection Officer (DPO) or Compliance Team.

  • Outcome: Ensure automated decision-making processes comply with GDPR, and safeguards are in place.

Non-Compliance Risks

  • Fines: Up to €20 million or 4% of global annual turnover.

  • Legal Exposure: Complaints, enforcement actions, or invalidated automated decisions.

  • Reputational Damage: Loss of trust due to unfair or opaque automated decisions.

  • Operational Risk: Failure to implement safeguards may lead to regulatory scrutiny or legal challenges.