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Ghosts in the Algorithm: Busting AI Hallucinations under the GDPR

Linda Torries – Tech Writer & Digital Trends Analyst by Linda Torries – Tech Writer & Digital Trends Analyst
March 2, 2025
in AI Regulations & Policies
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Ghosts in the Algorithm: Busting AI Hallucinations under the GDPR
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The Rise of General-Purpose Artificial Intelligence and the Challenge of AI Hallucinations

The rise of general-purpose artificial intelligence (GPAI) systems is transforming industries by generating human-like text, images, and other content. However, these advancements bring a significant challenge: AI hallucinations – instances where AI produces plausible but false or nonsensical information. Such hallucinations undermine the reliability of AI outputs and pose risks when disseminated as factual data, especially in critical fields like law, healthcare, and journalism.

AI Hallucinations and Data Subject Rights

A recent article and a study explore the complex interplay between AI hallucinations and data subject rights under the General Data Protection Regulation (GDPR). They examine high-profile cases where individuals were inaccurately portrayed by AI systems, leading to data protection complaints. In April 2024, the consumer organization Noyb filed a complaint with the Austrian Data Protection Authority (DPA), alleging that ChatGPT violated GDPR’s accuracy principle by providing an incorrect date of birth for a public figure and failing to rectify the error when notified.

Regulatory Perspectives

Drawing on regulatory perspectives, the article and the study focus on the nuanced approaches proposed by DPAs such as the Hamburg DPA and the UK’s Information Commissioner’s Office. In July 2024, the Hamburg DPA published a Discussion Paper that ignited extensive debate. This paper’s significance lies in the Hamburg DPA’s focus on the critical distinction between GPAI systems and Large Language Models (LLMs), which constitute only one component of GPAI systems.

The Hamburg DPA’s Focus on LLMs

According to the Hamburg DPA, LLMs themselves do not contain personal data and, as such, fall outside the scope of the GDPR—a stance that has drawn criticism examined in detail in the study – as well as the Hamburg DPA’s response. However, the true significance of the Discussion Paper lies in its call to shift regulatory attention toward other components of GPAI systems—particularly their outputs, where the GDPR clearly applies—rather than the internal mechanics of LLMs.

ICO’s Risk-Based Approach

Similarly, the ICO proposed a risk-based approach to the issue of AI hallucinations, tailoring accuracy requirements to the purpose and context of AI use and emphasizing information and transparency. The combination of these guidances could be very helpful to mitigate the risks of violating the principle of accuracy and data subject rights under the GDPR when GPAI systems generate incorrect personal information, without hindering the development of these technologies in Europe.

Industry Efforts to Address AI Hallucinations

This study also explores the multifaceted efforts by GPAI system creators to address these issues, explaining in detail the technical and legal measures implemented to reduce hallucinations and mitigate associated risks. While these measures represent significant progress, they are yet far from perfect, and ongoing refinement is necessary as the technology evolves.

Conclusion

By weaving together regulatory insights and industry practices, the study argues for a balanced approach and for ongoing collaboration among stakeholders to refine strategies that effectively manage AI hallucinations within the GDPR framework.

FAQs

Q: What are AI hallucinations?
A: AI hallucinations are instances where AI produces plausible but false or nonsensical information.

Q: What is the significance of the Hamburg DPA’s Discussion Paper?
A: The paper’s significance lies in its call to shift regulatory attention toward other components of GPAI systems, particularly their outputs, rather than the internal mechanics of LLMs.

Q: What is the ICO’s risk-based approach to AI hallucinations?
A: The ICO proposed a risk-based approach, tailoring accuracy requirements to the purpose and context of AI use and emphasizing information and transparency.

Q: How can we mitigate the risks of violating the principle of accuracy and data subject rights under the GDPR when GPAI systems generate incorrect personal information?
A: By adopting a balanced approach and ongoing collaboration among stakeholders to refine strategies that effectively manage AI hallucinations within the GDPR framework.

Q: How can I read more about AI hallucinations and the GDPR?
A: Read the IAPP article here or the full study here.

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Linda Torries – Tech Writer & Digital Trends Analyst

Linda Torries – Tech Writer & Digital Trends Analyst

Linda Torries is a skilled technology writer with a passion for exploring the latest innovations in the digital world. With years of experience in tech journalism, she has written insightful articles on topics such as artificial intelligence, cybersecurity, software development, and consumer electronics. Her writing style is clear, engaging, and informative, making complex tech concepts accessible to a wide audience. Linda stays ahead of industry trends, providing readers with up-to-date analysis and expert opinions on emerging technologies. When she's not writing, she enjoys testing new gadgets, reviewing apps, and sharing practical tech tips to help users navigate the fast-paced digital landscape.

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