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EU court: an automated credit score can itself be an 'automated decision'

In SCHUFA (C-634/21), decided on 7 December 2023, the Court of Justice held that an automated score can fall under GDPR Article 22 when a third party draws strongly on it for a contract decision.

Polity Atlas editorsPublished 7 Dec 2023
Original sourceCourt of Justice of the European UnionRead at Court of Justice of the European Union ↗

What happened. A German administrative court asked whether a credit agency's automated calculation of a repayment-probability score is itself 'automated individual decision-making'. The Court of Justice answered yes where a third party, to which the score is sent, draws strongly on it to establish, implement or terminate a contract.

Why it matters. Article 22(1) GDPR gives people a right not to be subject to a decision based solely on automated processing that has legal or similarly significant effects. The ruling means preparatory scoring can trigger that protection, not only the final decision. The case concerned a private credit agency, but the reasoning on what counts as a 'decision' is relevant wherever automated scores feed public or private decisions.

What to watch. How national authorities and courts apply the judgment, and how it interacts with the EU AI Act's rules for high-risk systems.