Balancing Compliance, Privacy, and Ethics: Why Companies Need Distinct DPO, CO and AI Ethics Officers

In today’s regulatory landscape, many companies are navigating a complex web of privacy, compliance, and ethical responsibilities. Recent €50,000 fine by the Belgian DPA against a company that appointed its Head of Compliance as DPO serves as a clear warning. The Belgian DPA argued that holding both positions created a conflict of interest, as the DPO’s independent oversight was compromised by their simultaneous involvement in the compliance function. Similarly, the German DPA fined an e-commerce company €525,000 in 2022 for assigning a managerial employee with operational responsibilities as DPO. In both cases, the DPAs emphasized that the issue was not with having an employee as DPO—allowed by GDPR—but with the conflict of interest created by overlapping responsibilities.

GDPR’s Article 38.6 requires that DPOs operate independently and be free from conflicting duties. Combining DPO and compliance functions often places the DPO in the position of monitoring activities they themselves are partly responsible for enforcing, undermining objectivity. As compliance often involves overseeing legal and regulatory frameworks within an organization, a Compliance Officer as DPO would be both monitoring and executing compliance actions, jeopardizing the neutrality needed to fulfill GDPR’s mandates.

The Growing Need for an AI Ethics Officer—and Should They Be Separate?

With the EU AI Act, AI oversight is gaining regulatory attention, highlighting the need for an AI Ethics Officer. This role would manage the ethical considerations and regulatory risks associated with AI, such as fairness, transparency, and bias—areas not covered by traditional data privacy roles like the DPO. While a DPO focuses on data privacy and GDPR compliance, an AI Ethics Officer would concentrate on AI-specific regulations and ethical guidelines, ensuring AI initiatives align with societal and organizational values.

Some organizations might consider combining the AI Ethics and DPO roles, given their overlapping focus on responsible data handling. However, just as with the DPO and Compliance Officer, combining the roles may lead to conflicts. An AI Ethics Officer’s proactive, ethical oversight could be compromised if they are also responsible for data privacy, especially when privacy concerns intersect with ethical risks unique to AI. A dedicated AI Ethics Officer can more effectively address AI compliance without conflicting with the DPO’s statutory focus on GDPR requirements.

Key Recommendations for Role Structuring in Compliance Teams

1. Separate Compliance and DPO Functions: In light of recent DPA decisions, it’s wise to assign DPO duties to a role independent from compliance functions. This ensures the DPO can objectively assess data processing activities without conflicts of interest.
2. Appoint an AI Ethics Officer to Handle AI-Specific Oversight: As AI regulations expand, establishing a distinct AI Ethics Officer role helps manage the ethical and societal impacts of AI systems, allowing for focused, unbiased oversight.
3. Define Clear Responsibilities and Reporting Lines: Assign specific duties to the DPO, Compliance Officer, and AI Ethics Officer, with clear reporting to top management. This reinforces the independence of each role, particularly for the DPO’s GDPR obligations.
4. Conduct Regular Role Audits: Periodic assessments can help identify potential conflicts as responsibilities evolve, particularly for internal DPOs with other duties within the organization.

Conclusion

The recent rulings by the Belgian and German DPAs illustrate the risks of combining Compliance and DPO roles. By establishing separate roles for Data Privacy, Compliance, and AI Ethics, companies can safeguard against conflicts of interest, ensuring each role can independently fulfill its responsibilities. This approach not only ensures regulatory compliance but also supports ethical governance, building public trust in company practices.