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Ethical AI and Data PrivacymediumMultiple ChoiceObjective-mapped

AI Associate Ethical AI and Data Privacy Practice Question

A company is subject to GDPR and wants to use customer purchase history to predict future buying behavior. What is the primary requirement they must fulfill under GDPR when using customer data for AI predictions?

Answer choices

Why each option matters

Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.

Correct answer & explanation

Obtain explicit consent from customers to use their data for AI predictions

GDPR requires a lawful basis for processing personal data, such as consent or legitimate interest. The right to explanation is also relevant for automated decisions, but the primary requirement is obtaining a lawful basis (e.g., consent) before using the data.

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

  • Obtain explicit consent from customers to use their data for AI predictions

    Why this is correct

    GDPR requires a lawful basis; consent is often required for processing personal data for profiling or predictive analytics.

  • Ensure the AI model is hosted in the same country as the customer

    Why it's wrong here

    Data localization may be a separate requirement but is not the primary GDPR requirement for using data for predictions.

  • Provide a discount to customers who opt in to data usage

    Why it's wrong here

    Incentives are not required by GDPR; consent must be freely given.

  • Anonymize all customer data before training the model

    Why it's wrong here

    Anonymization can reduce privacy risks but is not mandatory if you have a lawful basis; it is one possible approach.

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