In December 2024, the European Data Protection Board (EDPB) issued an Opinion in response to a request from the Irish supervisory authority, focusing on the application of GDPR principles in the context of AI models. The Irish supervisory authority posed three specific questions:
- When and how can an AI model be considered “anonymous”?
- What is the appropriateness of legitimate interest as a legal basis for AI deployment and development?
- What are the consequences of unlawful processing of personal data on subsequent operations of the AI model?
Through its answers, the EDPB provided key guidance on how AI models interact with fundamental rights to privacy and data protection established in the GDPR.
Anonymous AI Models
According the EDPB, “[f]or a model to be anonymous, it should be very unlikely 1) to directly or indirectly identify individuals whose data was used to create the model, and 2) to extract such personal information from the model through queries.”
While anonymous data can help mitigate privacy concerns, it does not automatically make the AI model completely exempt from GDPR compliance. When a model is claimed to be anonymous, supervisory authorities will evaluate the claims of anonymity on a case-by-case basis, considering “all the means likely to be used” by the controller or a user.
The Opinion states that supervisory authorities should review the documentation provided by the controller when assessing if the model is truly anonymous. The EDPB outlines methods that the controller may use to demonstrate anonymity, which may include: 1) reducing the amount of personal data used during training, 2) taking steps to ensure this data cannot be identified, and 3) utilizing technical safeguards to prevent data extraction from the AI model using prompts or queries.
Key Takeaway: If a business claims an AI model relies on anonymous data, the claims of anonymity should be substantiated on a case-by-case basis with sufficient evidence and documentation. To do this, businesses with allegedly anonymous AI models may need to implement technical measures to limit the collection of data, reduce the likelihood of data being identifiable, protect against that data being extracted by users during deployment, and create documentation capable of demonstrating these efforts.
Legitimate Interest as a Legal Basis
Under the GDPR, a legitimate interest may constitute a legal basis for companies to process personal data when they have a justifiable reason to do so (beyond obtaining consent). However, the legitimate interest should be balanced against the data subject’s rights and interests, which requires careful consideration and justification when processing information from data subjects.
The Opinion provides a framework to assess if a legitimate interest can be a valid legal basis for processing personal data in AI development and deployment. The framework is comprised of a three-step test:
- Identify the legitimate interest pursued by the controller;
- Assess the necessity of the processing for purposes of the legitimate interest; and,
- Balance the legitimate interests against the rights and freedoms of the data subjects.
When conducting this test, the controller should be careful to identify an interest that is lawful, clearly articulated, and non-speculative. For example, a legitimate interest may be to develop an AI model’s conversational agent or to improve threat detection in an information system.
The controller should also adhere to GDPR data minimization principles, which state that the processing activities must be proportionate and in line with only what is necessary to achieve the legitimate interest.
Finally, controllers should conduct a nuanced balancing test. This test considers the unique circumstances of each case, which may include the data subject’s interest in retaining control over their data, personal benefits, or socioeconomic interest. The Opinion notes, the more precisely an interest is defined in relation to the purpose of the processing, the more precise the estimation of benefits and risks will be.
By employing this framework, developers and deployers should be able to decrease the likelihood that their AI models are disproportionately infringing on individual privacy rights and better align their AI practices with GDPR requirements.
Key Takeaway: The three-step analysis, according to the Opinion, is crucial to improving compliance for organizations relying on legitimate interest as a legal basis for processing in AI development or deployment. Organizations relying on legitimate interest in this AI context should review their processing activities to determine whether they are proportionate, transparent, and aligned with GDPR principles—like data minimization—to justify the reliance on legitimate interest as a legal basis for processing.
Consequences of Unlawful Processing
The Opinion notes that supervisory authorities enjoy discretionary powers to investigate and assess violations, and they can choose appropriate remedial measures based on the context of the case. However, the EDPB also provides guidance for the supervisory authorities, based on three scenarios.
- In the first scenario, personal data is retained in the AI model. The Opinion states that supervisory authorities will need to consider the surrounding circumstances of the AI model to determine if the development and deployment phases of the model involve different legitimate purposes for processing. If so, each should be examined separately.
- In the second scenario, personal data is retained in the model and is processed by another controller during deployment. In this instance, the supervisory authorities should determine if the deploying controller conducted an appropriate assessment to demonstrate accountability with Articles 5(1)(a) and 6 of the GDPR. This assessment should show that the AI model was not developed by unlawfully processing personal data.
- In the final scenario, a controller unlawfully processes personal data to develop the AI model, and then anonymizes the data before processing it in the context of deployment. The Opinion states that, if it can be demonstrated to the supervisory authorities that the deployment of the AI model does not entail the processing of personal data, then the GDPR does not apply. Therefore, the unlawfulness of the initial processing in development should not impact the deployment operation of the model.
While supervisory authorities do have substantial discretion in oversight of processing activities, the scenarios highlighted by the EDPB show that the development and deployment phases, while connected, may need to be evaluated independently.
Key Takeaway: Organizations should proactively ensure compliance at both the development and deployment stages of an AI model. Supervisory authorities will likely use the above examples as guidance, emphasizing the important of demonstrating lawful practices through each stage of the model.
The EDPB’s Opinion is an important guide for organizations navigating the intersection of AI and data privacy law. By addressing issues around anonymous AI models, legitimate interest, and lawful processing in development and deployment stages, the Opinion emphasizes responsible AI development.
As AI technologies continue to advance, businesses should be aware of the ways supervisory authorities are overseeing their AI models. The insights provided by the EDPB provide a foundation to help businesses to advance and develop new AI models, while also helping to safeguard and protect the rights of individuals.
