From regulatory ruling to company action: navigating data protection in 2026
From a regulatory standpoint, recent decisions by EU supervisory authorities and courts have clarified core obligations under the GDPR compliance framework. This article explains a representative ruling, outlines practical implications for businesses, and lists concrete steps companies should take to align operations with evolving data protection expectations.
Table of Contents:
normative decision in question
The authority in the case set a clear precedent on lawful bases and transparency.
The Authority has established that controllers must document legal bases and communicate them in a way that data subjects can understand. Compliance risk is real: regulators are prioritizing demonstrable accountability over formalistic checklists.
The ruling targeted processing for profiling and direct marketing where consent and legitimate interest had been used interchangeably. Regulators found deficiencies in impact assessments, retention policies, and vendor oversight. The decision emphasised proportionality and the need for layered, intelligible privacy notices.
From a practical standpoint, the decision signals closer scrutiny of automated decision-making and cross-border data flows. For investors and startups, this affects product design, go-to-market strategies, and due diligence in fundraising.
2. interpretation and practical implications
From a regulatory standpoint, the ruling clarifies accountability when controllers delegate processing across borders. The Authority has established that contractual clauses alone are insufficient without demonstrable oversight and implemented safeguards. This finding draws on EDPB guidance and recent Court of Justice of the European Union interpretations on accountability and joint-processing roles.
what the decision means in practice
For investors and startups, the ruling changes product design, go-to-market strategies, and due diligence in fundraising. Companies that rely on multi-tier sub-processing must show active monitoring, technical testing, and documented remediation. Compliance risk is real: regulators expect evidence, not promises.
practical steps companies should take
Perform a mapping of the processing chain to identify all sub-processors and data flows. Adopt written procedures for onboarding and auditing sub-processors, including security testing and incident-response obligations. Require demonstrable proof of implementation, such as penetration-test reports and audit logs, not just signed contracts.
Update privacy impact assessments to reflect multi-jurisdictional risks and mitigation measures. Integrate contractual rights with operational controls: access restrictions, encryption at rest and in transit, and formal escalation channels for non-compliance. Ensure board-level reporting on third-party risk and remediation timelines.
risks and enforcement exposure
The ruling increases exposure to administrative fines and corrective measures when oversight is lacking. Supervisory authorities may order processing suspensions or require targeted audits. Reputational damage and investor scrutiny can follow public enforcement actions.
best practices for investors and deal teams
In due diligence, request evidence of active oversight over sub-processors, including recent audit reports and remediation records. Factor third-party control gaps into valuation and closing conditions. Require contractual clauses that enable audits and rapid termination for material non-compliance.
implications for product and market strategy
Design privacy and security controls into products from the start. Limit data transfers to jurisdictions with equivalent protections or add supplementary safeguards. For cloud and SaaS decisions, prefer providers that publish routine independent audits and maintain transparent sub-processing registries.
The Authority’s emphasis on demonstrable implementation raises the bar for operational accountability and investor assessment. Companies that translate contractual commitments into verifiable controls will reduce compliance and business risk.
3. what companies must do
From a regulatory standpoint, the ruling requires companies to convert contractual promises into demonstrable operational practice. The Authority has established that paper commitments alone will not satisfy oversight obligations. Compliance risk is real: regulators will assess evidence of continuous governance, not only documentation.
Companies that translate contractual commitments into verifiable controls will reduce compliance and business risk. Practical priorities are:
embed privacy in operations
Move privacy responsibilities from legal teams into product, IT and procurement. Map data flows across systems and vendors. Ensure technical teams implement privacy-by-design measures and record implementation steps as part of development lifecycles.
treat processors as subject to scrutiny
Extend due diligence and monitoring to processors. Require measurable service-level indicators, regular security reporting and third-party audits. Maintain a risk-based supplier inventory and update it after every contractual change.
maintain living risk assessments
Replace static assessments with dynamic risk registers. Link assessments to incident scenarios, penetration test results and system changes. Document review cycles and versions to show continuous oversight.
operationalise incident readiness
Test incident response plans through tabletop exercises and simulated breaches. Record timelines, decisions and remediation steps. Ensure notification thresholds and escalation paths are actionable and regularly validated.
measure controls with objective metrics
Define measurable controls such as patching cadence, encryption coverage and access-review frequency. Collect evidence automatically where possible and retain logs suitable for regulator review.
align contracts with verification rights
Ensure contracts grant audit and remediation rights. Specify reporting formats, testing frequency and corrective-action deadlines. Avoid clauses that rely solely on attestations without verification mechanisms.
what this means for governance
Boards and senior management must receive concise, metric-driven reports on privacy posture. From a regulatory standpoint, demonstrating active oversight is as important as legal compliance. The Garante has established that visible management involvement reduces enforcement risk.
Companies that prioritise these steps will better demonstrate continuous oversight and lower exposure to regulatory enforcement. The next expected development is increased scrutiny of operational evidence during regulatory inquiries.
- Perform a renewed DPIA: update data protection impact assessments to reflect actual processing activities, newly deployed technologies and any sub-processing arrangements. From a regulatory standpoint, the DPIA must match operational reality.
- Strengthen supplier governance: implement a tiered third-party risk model with periodic audits, measurable performance metrics and contractual SLAs that bind suppliers to security and data protection obligations.
- Document implementation: retain evidence of technical measures, test results, penetration-test findings and remediation timelines. The Authority has established that documentation is central to demonstrating accountability.
- Operationalize incident response: maintain tested playbooks, standardized notification templates and decision logs to support timely breach reporting to supervisory authorities and affected data subjects.
- Train and certify: provide role-based privacy and security training and keep records of completions and competency assessments for relevant staff.
4. Risks and possible sanctions
From a regulatory standpoint, the ruling increases focus on operational proof rather than contractual promises. The next expected development is increased scrutiny of operational evidence during regulatory inquiries.
the ruling and its regulatory interpretation
The Authority has established that mere contractual clauses do not discharge obligations. Regulators will assess whether stated protections are implemented in practice. This shifts enforcement from paper to operation.
practical implications for companies
Companies must translate policies into verifiable processes. Evidence, not statements, will determine compliance outcomes. The risk compliance is real: insufficient documentation or weak controls will attract enforcement attention.
what companies should do now
Update DPIAs and supplier oversight to reflect current processing. Maintain test logs, audit trails and decision records. Operationalize breach playbooks and train staff with documented assessments of competence.
possible sanctions and liability risks
Supervisory authorities may impose fines, corrective orders or temporary restrictions on processing. Enforcement may also trigger reputational damage and contractual liability toward customers and partners.
best practices for compliance
Adopt a risk-based supplier tiering model, schedule regular proof-of-control audits and centralize evidence repositories. Use standardized templates for incidents and retain retention schedules for test results and remediation records.
The Authority will likely prioritise requests for concrete evidence during audits and investigations. Companies should expect more detailed inquiries into operational practices and be prepared to produce supporting documentation on demand.
5. best practice checklist for compliance
Companies should expect more detailed inquiries into operational practices and be prepared to produce supporting documentation on demand. From a regulatory standpoint, enforcement now targets deficiencies in governance as well as technical controls. The Authority has established that lack of timely remedial action aggravates liability. Compliance risk is real: administrative fines, corrective orders and processing bans remain likely outcomes for systematic failures.
The immediate priorities are clear. First, align documentation with live operations. Second, demonstrate ongoing remediation and senior oversight. Third, prepare for civil claims and heightened supervisory scrutiny.
To convert regulatory expectations into operational reality, adopt this pragmatic checklist:
- update DPIAs and records: ensure data protection impact assessments and processing records reflect current systems, new technologies and all sub-processors.
- map responsibilities: define clear accountability at executive and operational levels, and document decision-making on high-risk processing.
- evidence remediation: keep dated records of fixes, tests and follow-up reviews to show remedial action was taken promptly.
- strengthen contracts: revise supplier and processor agreements to include enforceable data protection clauses and audit rights.
- operational audits: schedule periodic internal audits and be ready to provide audit trails, logs and test results to supervisors.
- tailored training: implement role-specific training for staff handling high-risk processing and for teams that respond to supervisory inquiries.
- incident readiness: maintain an incident response plan with escalation paths, breach reporting templates and evidence preservation procedures.
- proportional security: apply technical and organisational measures proportionate to the risk level, and document the rationale for chosen controls.
- monitor enforcement trends: track supervisory decisions and regulator guidance to anticipate areas of heightened scrutiny.
- prepare for civil exposure: assess potential liabilities from data subject claims and factor them into risk registers and insurance arrangements.
From a regulatory standpoint, demonstrable evidence of governance and remediation materially reduces enforcement risk. The Authority has established that transparent cooperation with supervisors can influence corrective outcomes. Companies that convert policy into verifiable practice will better contain financial and reputational exposures. The risk of fines remains tied to scale and persistence of failures; prepare documentation accordingly.
practical measures to strengthen data protection posture
From a regulatory standpoint, effective data protection requires aligned processes, measurable controls and clear governance. The Authority has established that regulators will scrutinize operational evidence. Compliance risk is real: inadequate controls raise exposure to enforcement and operational loss.
what to do now
- Map processing activities: maintain up-to-date records of processing activities (ROPA) linked to business objectives and data flows. Ensure maps show sources, purposes, recipients and retention periods.
- Apply risk-based controls: match technical and organizational measures to the assessed risk level of each processing activity. Prioritise high-impact processes for encryption, pseudonymisation and access control.
- Implement continuous monitoring: define metrics and dashboards that track control performance. Schedule periodic third-party audits to validate effectiveness and detect regressions.
- Combine contractual obligations with oversight: set clear obligations in supplier contracts and follow with verification activities, on-site assessments or independent attestations.
- Assign executive accountability: designate board- or C-suite-level ownership for data protection. Require regular reporting on the organisation’s data protection posture and remediation progress.
- Adopt RegTech: use automation for DPIAs, consent management, data subject request workflows and audit trails. Automation reduces manual error and strengthens evidence collection.
interpretation and practical implications
These measures translate into concrete tasks for small teams and investors evaluating targets. Map completeness helps investors understand hidden liabilities. Strong controls reduce breach likelihood and potential valuation impacts. RegTech adoption can lower operational costs and speed due-diligence checks.
what companies should implement first
Start with a verified ROPA and a targeted DPIA for high-risk processing. Then implement monitoring dashboards and a supplier verification cadence. Assign an executive sponsor to ensure resources and timely reporting.
risks and enforcement focus
Regulators will prioritise systemic failures and lack of governance evidence. The Authority has shown interest in contractual gaps with processors and weak audit trails. Failure to demonstrate remediation can increase sanction severity.
best practices for ongoing compliance
Adopt proportionate measures, maintain clear documentation and test controls regularly. Use independent audits to validate claims. From a regulatory standpoint, demonstrable evidence matters more than intentions.
Expect regulators and investors to seek the same documentation used internally: ROPA, DPIAs, audit reports and remediation logs. Maintain those records as living artifacts to reduce compliance and investment risk.
next steps for operationalising compliance
Maintain the records referred to above as living artifacts to reduce compliance and investment risk. From a regulatory standpoint, treating GDPR compliance as an ongoing operational programme signals governance maturity to supervisors.
The Authority has established that regulators expect demonstrable evidence of continual monitoring, risk assessment and remediation. Compliance risk is real: failure to sustain controls can trigger enforcement, fines and reputational harm that affect business valuation and investor confidence.
practical actions for companies
Commission a combined legal and technical assessment to map processing, identify gaps and prioritise remediation. Use a documented project plan with milestones, owners and measurable outcomes. Deploy RegTech selectively to automate recordkeeping, consent management and data subject request workflows.
Adopt simple reporting dashboards that show control status to boards and investors. Train teams on procedures that link policy to daily operations. Preserve audit trails and change logs so external reviewers can verify the continuity of compliance efforts.
implications for investors
From a regulatory standpoint, investors should factor data protection governance into due diligence. Review policies, evidence of testing and incident response capability. Strong governance reduces tail risk and supports more accurate valuation.
Expected regulatory trends point to deeper scrutiny of operational controls and technical safeguards. Companies that maintain documented, up-to-date compliance programmes will be better positioned to absorb regulatory attention and protect investor value.
