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Privacy Impact Assessments

April 03, 2025 01:20 PM

Introduction

This article is intended to provide a foundational understanding of what a privacy impact assessment is and why it is important. A privacy impact assessment (PIA) or data protection impact assessment (DPIA) is performed when processing data is likely to involve a high risk to individuals. Think of it as a company’s “self-check” to make sure the data processing is done safely. Throughout this process, organizations will determine the risk a certain project presents, make a plan to mitigate that risk, and take specific action to reduce it. At many organizations, the two terms "DPIA" and "PIA" are often used interchangeably, there are some subtle differences. Below is high-level overview:

DPIA/PIA

  • Focuses on assessing the impact of data processing activities, the data privacy implications, and the data protection needs.
  • Often legally mandated under data protection regulations like the GDPR and considered best practice for assessing privacy risks in many other jurisdictions.
  • Aims to identify and assess privacy risks, foresee potential privacy issues, and propose solutions to enhance privacy protection.

Regulations & Recommendations

Laws and regulations that require companies to perform DPIAs/PIAs are becoming increasingly more common. It is important to be familiar with these requirements to comply with local regulations and protect consumer data. Here is an example of an article from the Colorado Privacy Act regarding privacy impact assessments requirements:

  • Article 6-1-1309(1) and (2) of the Colorado Privacy Act requires controllers to conduct and document a data protection assessment for each processing activity that presents a heightened risk of harm to a consumer.
  • (See https://coag.gov/resources/colorado-privacy-act/ for more detail on what data processing activities are included.)

Risk can arise in any project. However, there are some categories of data that would be considered more high risk than others. It is crucial to be aware of what these are, as failure to properly protect sensitive data can result in serious consequences. For example, "In 2023, the FTC fined Microsoft $20 million for alleged violations of the Children's Online Privacy Protection Act (COPPA) related to the Xbox gaming system, specifically for collecting and retaining children's personal information without parental consent." (See Source)

Some specific categories of sensitive data may include, but are not limited to:

  • Biometric/Genetic Information
  • Children's Information
  • Information Obtained by Tracking
  • Race/Ethnicity
  • Sexual Orientation/Information Related to Sex
  • Gender
  • Health
  • Religious, Political, and Philosophical Views or Beliefs

DPIA/PIA Checklist

Working toward total compliance with local and global regulations may seem daunting, but there are plenty of resources available to assist with completion of DPIAs/PIAs. The Office of the Australian Information Commissioner provides the outline below to help guide the PIA process:

  • Threshold Assessment: Determine if a specific data processing activity would merit a PIA.
  • Planning: Determine what information is needed, how it is to be collected, and how existing risk could affect the organization.
  • Describe the Project: Project aims, scope, and timeframe.
  • Identify the Stakeholders: The people who are affected by a project’s success/failure.
  • Map Information Flows: Show how data will be collected, explicitly outlining its use purpose, how to implement security measures, and how corrections/adjustments can be made.
  • Compliance Check: Make sure procedures are compliant with local/federal government data regulations.
  • Managing Risks: Consider strategies for dealing with negative privacy impacts identified in the privacy impact analysis stage.
  • Formulate Recommendations: Review the assessment to make any necessary changes.
  • Prepare the Report: Compile your assessment into a consolidated project plan.
  • Respond and Review: Continue to revise and update the PIA as needed.

Risk Mitigation

Managing privacy risks by taking specific action is the most important step in the process. Identifying risks is only the beginning. Organizations must implement concrete measures to minimize potential harms to individuals while maintaining compliance and fostering public trust. A well-structured risk management framework ensures that privacy concerns are effectively addressed in abiding by the following principles:

  • Necessity: Minimizing the collection of personal information to what is strictly necessary.
  • Proportionality: Any negative privacy impact should be in proportion to, or balanced with, any benefits to be achieved from the project.
  • Transparency and Accountability: Privacy measures should be transparent to individuals, through adequate collection notices and privacy policies.
  • Implementation: Privacy protections should be included in legal terms or other binding obligations and built into new technologies.
  • Privacy by Design: Consider how organizational policies and procedures can support privacy.

By actively applying these principles and the CES Privacy Principles, we can take meaningful steps to manage risks, ensuring responsible and ethical data use. The CES Privacy Center is committed to partnering on any projects to efficiently and effectively complete DPIAs/PIAs as needed to mitigate risk and protect individuals.