What is legitimate interest

What is legitimate interest

Legitimate interest definition

Legitimate interest, as defined in the GDPR, allows organizations to process personal data without obtaining explicit consent if they have a genuine and legitimate reason for doing so, and if the processing is necessary to achieve their legitimate interests. This basis recognizes that certain data processing activities may be essential for the functioning of businesses or for pursuing legitimate purposes, provided that they are conducted in a fair and balanced manner that respects individuals’ rights and freedoms.

 

 

 

 

What does Article 6(1)(f) state about legitimate interests?

Legitimate interest is foreseen under Article 6 (f):

 

processing is necessary for the purposes of the legitimate interests pursued by the controller or by a third party, except where such interests are overridden by the interests or fundamental rights and freedoms of the data subject which require protection of personal data, in particular where the data subject is a child.

 

Find more legal basis in our article Legitimate interest.

 

 

 

When does Legitimate Interest apply and how to demonstrate it?

To determine whether legitimate interest is an appropriate basis for data processing, organizations must adhere to a three-part test:

 

Identifying the Legitimate Interest (..processing is necessary for..): Organizations must first identify a legitimate interest that justifies the need to process personal data. This could include purposes such as fraud prevention, network security, direct marketing, or ensuring the security and integrity of IT systems.

 

Assessing Necessity (..the purposes of the legitimate interests pursued by the controller or by a third party..): Once a legitimate interest is identified, organizations must assess whether the data processing is necessary to achieve that interest. This involves evaluating whether the same objectives could be achieved through less intrusive means or whether the processing is proportionate to the intended purpose.

 

Balancing with Individual Rights (..except where such interests are overridden by the interests or fundamental rights and freedoms of the data subject which require protection of personal data, in particular where the data subject is a child…): Finally, organizations must balance their legitimate interests against the rights and freedoms of the individuals whose data is being processed. This requires considering the potential impact on individuals’ privacy rights and ensuring that any adverse effects are minimized.

 

You must assess every aspect of the three-part test and record the results to illustrate the applicability of legitimate interests. This process is commonly referred to as a ‘legitimate interests assessment’ or LIA, although this precise terminology is not explicitly mentioned in the GDPR.

 

Once your Legitimate Interests Assessment (LIA) establishes the applicability of the legitimate interests basis, it’s imperative to conduct it prior to commencing data processing. Attempting to retrospectively apply legitimate interests after initiating data processing is not permissible. Processing data without a lawful basis constitutes unlawful activity, inevitably resulting in breaches of transparency and accountability obligations.

 

While there’s no prescribed procedure, approaching the LIA involves adhering to the three-part test mentioned above:

 

• The Purpose Test: Identify the legitimate interest.

 

• The Necessity Test: Evaluate whether the processing is necessary.

 

• The Balancing Test: Consider the individual’s interests.

 

 

What are examples of legitimate interests?

Company Profile:

XYZ Corporation is a leading retailer of consumer electronics, with a diverse product portfolio ranging from smartphones and laptops to home appliances and entertainment systems. The company operates through various channels, including brick-and-mortar stores, e-commerce platforms, and digital marketing channels. With a global presence, XYZ Corporation aims to engage with customers effectively while respecting their privacy rights.

 

Rationale for Legitimate Interest:

XYZ Corporation recognizes the importance of personalized marketing strategies in driving customer engagement and increasing sales. However, obtaining explicit consent for every marketing communication can be challenging and may result in reduced effectiveness. By leveraging legitimate interest as a lawful basis for its marketing activities, XYZ Corporation aims to:

 

Enhance Targeted Marketing: Utilizing customer data to tailor marketing communications based on individuals’ preferences, purchase history, and browsing behavior.

 

Improve Customer Experience: Providing relevant product recommendations, promotions, and offers to enhance the overall shopping experience for customers.

 

Drive Business Growth: Increasing sales and revenue by delivering targeted marketing messages to customers who are more likely to make purchases.

 

Legitimate Interest Assessment:

 

To determine the applicability of legitimate interest in its marketing strategies, XYZ Corporation conducts a thorough Legitimate Interests Assessment (LIA). The assessment involves the following steps:

 

Identifying Legitimate Interest: The company identifies its legitimate interest in marketing its products and services to existing and potential customers, aiming to drive sales and increase brand loyalty.

 

Assessing Necessity: XYZ Corporation evaluates whether the data processing activities involved in its marketing strategies are necessary to achieve its legitimate interest. This includes analyzing the types of data collected, the methods of data processing, and the potential impact on individuals’ privacy rights.

 

Balancing Test: The company considers the rights and freedoms of individuals whose data is being processed and assesses whether the benefits of its marketing strategies outweigh any potential risks or harms to individuals’ privacy rights.

 

Compliance Measures:

 

XYZ Corporation implements several measures to ensure compliance with data protection regulations and mitigate risks associated with legitimate interest in marketing:

 

Transparency: The company provides clear and accessible information to customers about its data processing activities, including the purposes for which their data is used and their rights regarding data protection.

 

Data Minimization: XYZ Corporation collects and processes only the data necessary for its marketing activities, avoiding unnecessary or excessive data collection.

 

Data Security: The company implements robust data security measures to protect customer data from unauthorized access, disclosure, or misuse.

 

Conclusion:

 

By conducting a thorough Legitimate Interests Assessment and implementing appropriate compliance measures, XYZ Corporation demonstrates the responsible use of legitimate interest in its marketing strategies. Through targeted and personalized marketing communications, the company aims to enhance customer engagement, drive sales, and foster long-term relationships with its customers while respecting their privacy rights and complying with data protection regulations.

 

Is legitimate interest appropriate for marketing purposes? 

 

The balancing test

 

The balancing test, also referred to as the necessity and proportionality assessment, is a fundamental component of data protection regulations such as the GDPR (General Data Protection Regulation). At its core, the balancing test requires organizations to weigh their legitimate interests in processing personal data against the rights and freedoms of the individuals whose data is being processed. This multifaceted evaluation aims to strike a delicate balance between achieving organizational objectives and safeguarding individual privacy rights.

 

• Importance of Proportionality and Justification

 

Central to the balancing test is the principle of proportionality, which necessitates that the extent of data processing is commensurate with the intended purpose. Organizations must justify the necessity and proportionality of their data processing activities, ensuring that they do not exceed what is reasonable and necessary to achieve their legitimate interests. This requires a careful examination of the potential benefits and risks associated with the data processing, as well as consideration of less intrusive alternatives.

 

In conducting the balancing test, organizations must consider a myriad of factors, including:

 

Nature of the Data: The sensitivity and nature of the personal data being processed, as well as the potential impact on individuals’ privacy rights.

 

 

Purpose of Processing: The specific purposes for which the data is being processed and the extent to which these purposes are essential for achieving the organization’s legitimate interests.

 

 

Proportionality: Whether the extent of data processing is proportionate to the intended purpose and whether less intrusive means could achieve the same objectives.

 

 

Potential Harms: The potential risks and harms to individuals’ rights and freedoms, including the risk of unauthorized access, misuse, or discrimination.

 

 

Mitigation Measures: The measures taken by the organization to mitigate risks and protect individuals’ rights, such as data minimization, pseudonymization, and encryption.

 

 

 

 

Do you need to verify whether your company is fully compliant with data protection laws?

Focus on your business and keep your compliance documents up-to-date with Seifti:

 

We provide you with GDPR consultancy and audit services, with all your data processing activities.

 

Our team will validate that your company’s current data protection policies and procedures are fully compliant.

 

Also, our experts will help you define the subject rights workflows to avoid issues with the Data Protection Authorities.

 

If you need further information, do not hesitate in contacting us!