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    OpenAI fined $15.7 million by Italian data protection agency for undisclosed data breach and improper data handling practices

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    OpenAI has been fined $15.7m by Italy’s data protection agency IDPA, over undisclosed data breach and improper data collection practices. The IDPA found that OpenAI did not let users know their data was being used for AI training, and did not check user ages. The agency has now mandated a six-month educational campaign to help users understand OpenAI’s data collection practices. OpenAI has moved its European office to Ireland and the chatbot service was unblocked in Italy in late April after an initial block in March following privacy concerns.

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    OpenAI, maker of the famous AI-powered chat tool ChatGPT, was hit with a $15.7 million fine from Italy’s data protection agency, known as the IDPA, following concerns about their data collection tactics. The IDPA’s investigation found that OpenAI didn’t disclose details about a data breach which happened last March.

    It also turned out that OpenAI used people’s personal info to train their AI chat model but they hadn’t made it clear to users what’s happening, breaking transparency rules. The IDPA also expressed concern that OpenAI didn’t check if users were old enough to use their services.

    Consequently, the IDPA has told OpenAI to run a six-month campaign to help people understand how ChatGPT works, especially with respect to data collection. They want users to know how they can reject the idea of OpenAI using their info for AI training and how to use the rights they have under the EU’s data privacy laws.

    If companies break these laws, they can be fined up to $20 million or 4% of their annual sales. OpenAI managed to negotiate a smaller fine thanks to their cooperation during the investigation.

    The investigation led OpenAI to move its European HQ to Ireland. Any further investigations will, therefore, be led by the Irish authorities.

    Italy blocked OpenAI’s ChatGPT in March 2023 due to privacy worries. This sparked an investigation into suspected rule-breaking in data privacy. Despite getting some flak for the ban, Italy said they would lift the restriction provided OpenAI met certain transparency conditions. The AI chatbot was back in action in Italy by April 29.

    OpenAI has yet to comment on these recent developments.

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