What does a Privacy Impact Assessment (PIA) address?

• A. Design of user interface.
• B. Evaluation of how AI systems collect, store, and process personal data to ensure regulatory compliance.
• C. Server location optimization.
• D. Marketing analytics.

Answer: (B)

PIA focuses on privacy risks stemming from how data is collected, stored, and processed by a system, with the aim of ensuring compliance with privacy laws and protecting individuals’ rights. In AI contexts, this means examining what data is used, how it flows through the system, who has access, how it’s stored and secured, how long it’s kept, and for what purposes it’s used. It also covers data minimization, lawful bases or consent, transparency to data subjects, and governance controls. The goal is to identify potential harms—such as re-identification risks or biased outcomes—and propose mitigations like data anonymization, stricter access controls, defined retention limits, and privacy-preserving techniques. This focus on data handling and regulatory compliance distinguishes it from concerns about user interface design, server location optimization, or marketing analytics, which address different aspects of a system.