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Artificial Intelligence (AI) is revolutionising industries across the UK, offering unparalleled opportunities for innovation and efficiency. But as businesses increasingly integrate AI technology into their operations, questions around GDPR compliance and data protection are becoming more significant than ever.

If you’re a business owner or data protection officer, you might be asking yourself, does GDPR apply to AI? The short answer is yes—but the implications can be complex. This blog post will help explain these complexities, so you can ensure your organisation remains GDPR compliant while leveraging the power of AI.

AI and GDPR Compliance: The Basics

GDPR (General Data Protection Regulation) is a legal framework implemented in order to protect individuals’ privacy and data rights across the European Union, and is mirrored by similar legislation in the UK. It applies to any organisation that processes personal data, regardless of whether the processing is done manually or via AI technology.  The use of AI brings unique challenges under GDPR, particularly because of how AI systems process vast amounts of data to learn and make predictions. This often involves collecting, storing, and analysing personal data, which puts you squarely in the realm of GDPR responsibility.

Here’s why GDPR applies to AI systems:

• AI systems often use large datasets that include personal data.
• Their automated decision-making features are specifically addressed under GDPR rules, like Article 22.

GDPR’s main goal is to give people more protection and control over their personal data. For AI applications to comply, businesses must balance innovation with their data protection responsibilities.

The GDPR Principles Applied to AI

To comply with GDPR while using AI, your organisation must adhere to the regulation’s six main principles when processing personal data. Here’s how they apply in the context of AI:

• Lawfulness, fairness and transparency

When using AI, you must ensure that data processing is lawful, fair, and transparent. You need to ensure that you are entitled to process the personal data, and are using it for lawful and fair purposes. Individuals must fully understand how their data is being used—this includes explaining the role AI technology plays in your privacy policy.

• Purpose limitation

Personal data collected for one purpose cannot be reused for another unless explicit consent is given or you otherwise meet one of the criteria required in order to use the data for this new purpose. If your AI system is repurposing data outside its original intent, you risk non-compliance.

• Data minimisation

Only process the data that is absolutely necessary for a specific purpose. AI rapidly scales data use, so take extra care to avoid collecting or processing unnecessary information.

• Accuracy

GDPR requires that personal data is kept accurate and up to date. If your AI makes decisions based on outdated or incorrect data, it could result in compliance breaches.

• Storage limitation

Personal data should only be retained for as long as necessary. AI systems, known for storing vast amounts of information, must have clear data retention policies in place. It is difficult at times to determine how long it is necessary to retain information, but the general rule is that if you no longer have a legitimate reason to hold onto the data in question you should be deleting or destroying it.

• Integrity and confidentiality

Data processed by AI systems must be appropriately secured. Taking steps such as encryption, anonymisation, or pseudonymisation reduce the potential risk of a data breach.

Key Challenges GDPR Poses to AI

Automated Decision-Making

Article 22 of GDPR specifically addresses automated decision-making and profiling, which are often integral to AI systems. If your AI system makes significant decisions about individuals (e.g., approving loans or hiring employees) without human involvement, you must ensure the following:

• Individuals are informed of the decision-making process.
• Opportunities exist for them to challenge decisions or request human intervention.

Failing to address this can lead to legal and reputational risks.

Data Transparency

AI algorithms, particularly machine learning models, are often described as “black boxes” due to their complexity. However, GDPR emphasises transparency. You should therefore  explain how your AI algorithms operate and how personal data factors into decision-making—even if the AI’s logic is sophisticated in a clear manner so that individuals can understand what is happening with their data.

Consent Management

AI systems often aggregate and process data collected from various sources, making obtaining valid consent tricky. You should ensure that you meet the necessary criteria for collecting personal data, consent being one of these.

Practical Tips for GDPR-Compliant AI Systems

If your organisation relies on AI, here are actionable steps to ensure compliance with GDPR regulations:

1. Check for Data Risks

Review how your AI uses data and take steps to reduce any risks. Keep a record of your review, the risks you have identified and the steps you are taking to mitigate these risks.

2. Use Privacy Tools

Protect personal data with methods like pseudonymisation or differential privacy.

3. Be Transparent

Clearly explain how your AI uses personal data in simple, easy-to-understand language in your privacy notices.

4. Review AI Often

Regularly check your AI to make sure it follows GDPR rules and makes fair decisions.

5. Get Legal Help

Work with a data privacy expert to stay compliant, especially if your AI operates in different countries with different laws.

Why GDPR Compliance is Crucial for AI Adoption

Non-compliance with GDPR can lead to severe penalties—including fines of up to €20 million or 4% of your organisation’s annual global turnover, whichever is higher. Beyond the financial consequences, breaches can result in damaged reputation and loss of trust among consumers.

Whilst it may seem complicated, compliance doesn’t have to be burdensome. Done correctly, it can even present an opportunity to build trust with your customers by demonstrating a genuine commitment to protecting their privacy and data rights. When done right, AI tools that align with GDPR can provide your business with both competitive and legal advantages.

AI and GDPR undoubtedly intersect in ways that challenge traditional data use, but by adhering to the guiding principles of GDPR, businesses can harness the power of AI ethically and responsibly.

If your organisation uses or plans to implement AI technology, now is the time to review its compliance with GDPR and ensure your systems align with data protection laws.

If you still have any questions about AI and GDPR compliance then please contact one of our Data Protection experts today.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.