Understanding Legitimate Interest under GDPR
Not every data processing needs consent
When people think of GDPR, they often think about getting consent for everything. But consent is only one legal basis under GDPR.
Another important basis is Legitimate Interest.
It allows companies to process personal data if they have a valid business reason that does not override the rights and freedoms of individuals.
However, using legitimate interest is not a free pass. It comes with specific responsibilities.
Let’s break it down.
⚖️ What is legitimate interest?
Legitimate interest means that your company has a real, lawful reason to process personal data without needing direct consent from the individual.
Typical examples:
- Preventing fraud
- Securing your IT systems
- Direct marketing (under strict conditions)
- Internal administrative purposes between related companies
You must always ask yourself: Would a reasonable person expect this use of their data?
🧠 The balancing test
Before you rely on legitimate interest, GDPR requires you to perform a balancing test.
You must consider:
- What is your interest in processing the data?
- How does the processing impact the individual's privacy?
- Are there less intrusive ways to achieve the same goal?
- Would people reasonably expect their data to be used this way?
If the individual's rights outweigh your business interest, you cannot use legitimate interest.
📝 Document your decision
If you rely on legitimate interest, you must document:
- Your business interest
- The balancing test you performed
- Why you believe the interest outweighs the risks
- Any measures you take to minimize the impact
This documentation is important for accountability and in case regulators ask for proof.
📢 Inform your users
Even when using legitimate interest, you must inform individuals:
- That you are processing their data
- What your legitimate interests are
- How they can object to the processing
This information usually appears in your privacy policy.
❌ When legitimate interest is not enough
You cannot use legitimate interest if:
- The processing is unexpected or intrusive
- Sensitive personal data is involved (like health data)
- You cannot show that your interest is strong enough
- You ignore a user’s objection without a valid reason
In these cases, you need another legal basis, often explicit consent.
🛠️ How ToolHive helps
In ToolHive, you can link each tool and data process to the correct legal basis, including legitimate interest. You can also record your balancing tests and make sure your documentation is easy to find if needed.
Clear records mean stronger compliance and fewer risks.
🚀 Legitimate interest is powerful but not automatic
Legitimate interest gives businesses important flexibility under GDPR. But it comes with the responsibility to think carefully, document your decisions, and respect individual rights.
Used correctly, it builds trust instead of breaking it.
Want to better track your GDPR compliance steps? Start your free trial of ToolHive today and stay ahead with structured, visible data management.