Privacy-by-Design through Systematic Privacy Impact Assessment - a Design Science Approach

A major problem for companies that develop and operate IT applications that process personal data of customers and employees is to ensure the protection of this data and to prevent privacy breaches. Failure to adequately address this problem can result in considerable reputational and financial damages for the company as well as for affected data subjects. We address this problem by proposing a methodology to systematically consider privacy issues in a step-by-step privacy impact assessment (so called ‘PIA’). Existing PIA approaches lack easy applicability because they are either insufficiently structured or imprecise and lengthy. We argue that employing the PIA proposed in this article, companies will be enabled to realise a ‘privacy-by-design’ as it is now widely heralded by data protection authorities. In fact, the German Federal Office for Information Security (BSI) ratified the approach we present in this article for the technical field of RFID and published it as a guideline in November 2011. The contribution of the artefacts we created is twofold: First, we provide a formal problem representation structure for the analysis of privacy requirements. Second, we reduce the complexity of the privacy regulation landscape for practitioners who need to make privacy management decisions for their IT applications.