European Union: Court of Justice of the European Union issued ruling in lawsuit on automated decision-making including profiling regarding assessment of the creditworthiness of a natural person

On 27 February 2025, the Court of Justice of the European Union ruled in Case C-203/22 that individuals subject to automated credit assessments must receive an explanation allowing them to understand and challenge the decision. The case concerned a refusal by a mobile operator to grant a contract based on an automated credit check. The Court clarified that controllers must describe the principles applied in decision-making, including how personal data influenced the outcome, rather than merely disclosing the algorithm. If trade secrets or third-party data are involved, national authorities must assess the balance between transparency and confidentiality.