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Privacy & law4 September 2026 · 2 min read

Legitimate interests: the three-part test, explained

Most business data processing doesn't rely on consent at all; it relies on legitimate interests, and that has to pass a three-part test you should write down.

1Purpose: is there alegitimate interest?2Necessity: is processingneeded for it?3Balancing: do people'srights override it?
The legitimate interests assessmentICO guidance on legitimate interests

Applied to licensing records

  • Purpose: raising revenue from records the company already holds.
  • Necessity: only the records and fields actually needed.
  • Balancing: de-identification, exclusions and opt-outs tip it in favour.

Write it down

A documented legitimate interests assessment, alongside a DPIA for higher-risk processing, is what a regulator will ask to see.

Key takeaways
  • Three tests: purpose, necessity, balancing.
  • Safeguards strengthen the balance.
  • Document it before processing starts.
Sources
  • ICO: Legitimate interests guidance

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