Data Privacy, EU Privacy Laws, GDPR, Privacy

What Is a Data Protection Impact Assessment (DPIA) and When Does Your Business Need One?

July 17, 2025

Many businesses launch new apps, adopt third-party tools, or process sensitive personal data—without realizing that they may be legally required to conduct a Data Protection Impact Assessment (DPIA). Skipping this step can result in non-compliance, privacy risks, and regulatory penalties. In this blog, we explain what a DPIA is, when it’s required under data privacy laws like the General Data Protection Regulation (GDPR) and the California Privacy Rights Act (CPRA), and how your business can benefit from making DPIAs part of its risk management strategy.

What Is a Data Protection Impact Assessment (DPIA)?

A Data Protection Impact Assessment (DPIA) is a formal process used to identify and minimize privacy risks before starting a data processing activity that is likely to pose a high risk to individuals’ rights and freedoms.

A DPIA helps businesses:

Assess how personal data will be collected, stored, used, and shared
Identify potential privacy risks or harms
Evaluate whether the data use is necessary and proportionate
Recommend actions to mitigate risks
Document the decision-making process for accountability

DPIAs are not just good practice—they are required by law in many cases.

When Is a DPIA Required?

Under the General Data Protection Regulation (GDPR)

According to Article 35 of the GDPR, a DPIA is required when data processing is:

Likely to result in a high risk to the rights and freedoms of individuals
Involves systematic and extensive profiling
Includes large-scale processing of sensitive data (such as health, genetic, or biometric data)
Includes public monitoring (e.g., CCTV or location tracking)

Under the California Privacy Rights Act (CPRA)

The CPRA authorizes the California Privacy Protection Agency (CPPA) to issue regulations requiring businesses to perform risk assessments (similar to DPIAs) when processing personal information that presents significant risk to consumer privacy.

Examples of high-risk processing that may require a DPIA include:

Selling personal data of minors
Using AI to profile users for marketing or employment decisions
Sharing geolocation data with third parties
Collecting sensitive personal information such as racial or health data

Why DPIAs Matter to Your Business

Businesses that skip DPIAs may unintentionally create serious legal, financial, and reputational risks.

Without a DPIA, your organization could:

Violate the GDPR, CPRA, or other state-level privacy laws
Launch new products or tools that collect sensitive data without adequate protections
Fail to detect and mitigate data processing risks in advance
Be unprepared for audits, investigations, or consumer complaints
Face fines, lawsuits, or enforcement actions from regulators

A DPIA acts like a privacy “stress test” for your project. It shows regulators and customers that your business takes data protection seriously and builds privacy into its design—not as an afterthought.

What Should Be Included in a DPIA?

A comprehensive DPIA should cover:

A description of the project or processing activity
The types of personal data involved
The purpose and legal basis for processing
An assessment of privacy risks and potential harms
Measures to mitigate those risks
Stakeholder involvement (such as legal, IT, and privacy teams)
A documented decision on whether to proceed or revise the activity

For very high-risk projects, it may also be necessary to consult with a data protection authority before moving forward.

How Curated Privacy LLC Can Help

At Curated Privacy LLC, we support businesses by building DPIA processes that are practical, scalable, and fully compliant with data protection laws.

Our services include:

Evaluating whether your projects require a DPIA under the GDPR, CPRA, or other laws
Conducting customized DPIAs tailored to your industry and processing activities
Assisting with risk analysis, mitigation planning, and documentation
Updating your internal workflows to make DPIAs a standard part of your product or service development
Training your team to recognize high-risk processing early and respond correctly

We make DPIAs easy to manage—even if your business doesn’t have a full legal or compliance team.

Final Thoughts

A Data Protection Impact Assessment is more than a legal requirement—it’s a business advantage.

It helps prevent costly mistakes, protects your customers, and builds trust in your brand. As data privacy laws expand in the U.S. and globally, DPIAs will become a must-have for responsible organizations—not just a “nice to have.”