OpenAI Fined by Italy (Approx $15M) Over Privacy Breaches

Src: Reuters

Data protection authority of Italy, known as Garante, has imposed a fine of approximately $15.6 million on OpenAI following a comprehensive investigation into the firm's data handling practices related to its AI chatbot, ChatGPT.

Announced on December 20, 2024, the decision concludes a nearly two year inquiry that began after the Garante temporarily blocked ChatGPT in March 2023 due to privacy concerns, making Italy the first Western country to take such action against the service.

Several significant breaches of the General Data Protection Regulation (GDPR) were revealed by the investigation.

It was discovered that OpenAI has trained ChatGPT using personal data without an appropriate legal basis for such processing. Users' rights under the GDPR are violated by this lack of transparency.

According to the Garante, OpenAI did not implement sufficient mechanisms to verify the ages of its issuers, risking exposure of children under 13 to inappropriate content generated by the AI.

The firm failed to notify the authority about a data breach that happened in March 2023, further compounding its violations.

Along with the financial penalty, OpenAI must conduct a six-month public awareness campaign in Italy to educate users on its data collection practices and their rights when it comes to the use of their personal data.

The fine is criticized by OpenAI as "disproportionate" and plans to appeal the decision. According to the firm, this penalty exceeds nearly twenty times its revenue generated in Italy during the relevant period and contends that it undermines Italy's ambitions in AI development.

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