Italy GDPR Garante 2026: 7 Fixes Foreign Companies Need Now

What US, UK and Australian businesses processing Italian users' data must do now — before the Garante's inspection team knocks

URL: https://panatolawfirm.com/en/italy-gdpr-garante-compliance-2026-foreign-companies

ABSTRACT: Italy's data protection authority, the Garante per la protezione dei dati personali, has published its January–July 2026 inspection plan and is actively targeting AI processing platforms and data-broker services. For US, UK and Australian companies that handle data belonging to Italian residents, this is not a distant regulatory concern: GDPR jurisdiction follows the data subject, not the company's address. This guide explains where Italian enforcement law diverges from what foreign businesses typically assume, and what you must do to stay compliant.

A €79 Million Fine and a Blocked AI Platform: The Garante Is Not Theoretical

Picture a SaaS company headquartered in Austin, Texas. It provides a marketing-analytics platform to corporate clients across Europe, including several in Milan and Rome. It is registered with the UK Information Commissioner's Office. It has never received a letter from an Italian authority. Then, one morning, it receives an enforcement notice from the Garante per la protezione dei dati personali — Italy's independent data protection authority — ordering it to suspend processing of Italian users' data within 20 days.

This is not a hypothetical. In March 2026, the Administrative Court of Rome (Tribunale Amministrativo Regionale del Lazio) annulled the Garante's €15 million fine against OpenAI LLC, but the court's reasoning was largely procedural; the Garante immediately confirmed it would continue investigating AI platforms and enforce the same substantive standards. The authority's record penalty — €79 million against Enel Group — stands. And the Garante's inspection plan for the first half of 2026 specifically identifies data-broker services and AI data processing as priority targets.

If your company touches Italian residents' data, you are already on the map.

Does Italy's Garante Have Jurisdiction Over Foreign Companies Processing Italian Users' Data?

Yes, and the legal basis is unambiguous. Regulation (EU) 2016/679 (the General Data Protection Regulation, commonly GDPR) applies to any organisation — wherever it is incorporated — that processes personal data of individuals located in the European Union when that processing relates to offering goods or services to those individuals, or monitoring their behaviour. Italy has implemented the GDPR through Legislative Decree 196/2003 (Codice in materia di protezione dei dati personali, the Privacy Code), amended most recently by Legislative Decree 101/2018 to bring it into full alignment with the Regulation.

The Garante derives its enforcement powers from Article 58 of the GDPR and from Articles 154 and 166 of the Privacy Code. Those powers include issuing binding compliance orders, temporarily or permanently banning processing operations, and imposing administrative fines of up to €20 million or 4% of total worldwide annual turnover — whichever is higher. The word "worldwide" is intentional: a US company with €2 billion in global revenue could face a fine of up to €80 million.

Unlike in most common-law jurisdictions, where civil penalties are typically the ceiling of regulatory exposure, Italian law adds a criminal layer. Articles 167 and 167-bis of the Privacy Code criminalise unlawful data processing carried out to obtain profit or to cause harm. Criminal liability falls on individuals — directors, compliance officers, data protection officers — not only on the corporate entity. This is a dimension that companies accustomed to UK ICO enforcement or US Federal Trade Commission proceedings rarely anticipate.

Can a Foreign Company Be Fined by Italy's Data Regulator Under GDPR?

It can, and the procedural route is well established. Where a non-EU company has no establishment in any EU member state, GDPR Article 56 does not apply (that article allocates jurisdiction among EU supervisory authorities based on the location of the controller's main establishment). Instead, each supervisory authority in whose member state data subjects are affected has competence. The Garante therefore acts as the lead — and often the sole — authority for complaints and enforcement actions against non-EU entities whose Italian users raise concerns.

In practice, the Garante has issued urgent processing-ban orders against non-EU AI providers, including chatbot and generative-AI services, specifically because those providers failed to appoint an EU representative. The authority has treated the absence of a representative not merely as a procedural deficiency but as an indicator of the company's overall attitude toward compliance — and has used it to justify accelerating enforcement.

Do US Companies Need an EU Representative for Italy Under GDPR Article 27?

If your company is established outside the EU, processes EU residents' data on a non-occasional basis and is not a public authority, then Article 27 of the GDPR requires you to appoint, in writing, a representative established in an EU member state. This representative must be accessible to data subjects and supervisory authorities for all questions relating to processing, and must be listed in your privacy documentation.

A UK representative does not satisfy this obligation. Since 1 January 2021, the United Kingdom is a third country for GDPR purposes. UK ICO registration is a separate requirement under the UK GDPR — a domestic instrument that diverges incrementally from the EU text. A company that registered with the ICO post-Brexit and assumed it had covered European compliance has, in effect, covered neither market fully. The same applies to Australian companies that rely on the Privacy Act 1988 (Cth) compliance frameworks: the Australian framework contains no provision that substitutes for the Article 27 representative requirement.

The designated EU representative can be any natural or legal person in any EU member state, but practically the representative should be in a jurisdiction where legal communications can be handled efficiently and where the company can receive enforceable process. Italy itself is a valid choice, and having a representative with Italian legal knowledge carries practical advantages given the Garante's Italian-language correspondence.

What Does Italy's AI Law (Law 132/2025) Require From Non-Italian Tech Firms?

This is where Italian law creates obligations that genuinely exceed what the EU AI Act alone requires — and where most foreign technology companies are currently unprepared.

Law 132 of 9 August 2025 (Legge 9 agosto 2025, n. 132, the National AI Law), which entered into force in stages through late 2025 and early 2026, establishes a domestic regulatory layer that operates alongside, not instead of, Regulation (EU) 2024/1689 (the EU AI Act). The law assigns the Garante co-regulatory functions over AI systems that process personal data, in coordination with the Italian Agency for Digital Italy (Agenzia per l'Italia Digitale, AgID) and the National Cybersecurity Agency (Agenzia per la Cybersicurezza Nazionale, ACN).

For foreign companies, the most operationally significant obligations under Law 132/2025 concern transparency and algorithmic decision-making. Where an AI system makes decisions that significantly affect Italian users — credit scoring, recruitment screening, content moderation, insurance pricing — the controller must provide an explanation of the logic involved in terms that a non-technical user can understand. This goes beyond GDPR Article 22's right not to be subject to solely automated decisions: it applies to decisions that are substantially influenced by automated processing even where a human nominally approves the outcome. The Garante has indicated it will assess this distinction stringently in its 2026 inspection cycle.

The law also requires that AI systems used in sensitive contexts — healthcare, employment, financial services — maintain an audit log of decisions, accessible to the Garante on request, for a minimum of five years.

Italy's 2026 Inspection Priorities: What the Plan Reveals

The Garante's inspection plan for the period January to July 2026, published in the authority's official register, identifies four priority areas: data breaches affecting public databases; processing by data-broker and lead-generation services; whistleblowing platform operators; and AI-driven processing systems, particularly those using large language models or behavioural profiling.

The practical implication is sequenced risk. A US-based recruitment-technology firm that scrapes public Italian LinkedIn profiles and sells enriched candidate profiles to Italian employers sits at the intersection of three of those four categories. It almost certainly has no EU representative. It is almost certainly not compliant with Law 132/2025's explainability obligations. And it is operating in an area the Garante has flagged as a 2026 enforcement priority.

The Latin maxim ignorantia iuris non excusat — ignorance of the law is no excuse — applies with particular force here. The Garante has repeatedly held that the cross-border nature of digital processing does not dilute a controller's obligations; if anything, the authority has treated extraterritorial operation without Italian or EU engagement as an aggravating factor when calculating fines.

As Shoshana Zuboff observed in The Age of Surveillance Capitalism, the architecture of digital data collection was designed to be invisible to its subjects. Regulators across Europe are increasingly determined to make it visible — and accountable — regardless of where the collector sits.

A Practical Compliance Sequence for Foreign Companies

The first step is establishing whether GDPR applies to your operations at all. If your Italian user base is genuinely incidental and processing is occasional, Article 27 may not be mandatory — but the threshold is narrow and the Garante interprets it restrictively.

Assuming GDPR applies, the minimum baseline is as follows. Appoint an EU representative in writing and ensure this is reflected in your privacy policy and your Record of Processing Activities. Carry out a data protection impact assessment for any high-risk processing — this is mandatory under GDPR Article 35 and the Garante has stressed it specifically for AI-driven profiling. Ensure your lawful basis for processing Italian users' data is documented: legitimate interest assessments must be granular and cannot be cut and pasted from US or UK templates, because Italian balancing tests under Article 6(1)(f) take into account reasonable expectations shaped by local context.

Register with the Garante's notification system for any processing that falls under Article 37 of the Privacy Code (certain categories of sensitive data, health data, large-scale profiling). Verify that your data transfer mechanism for transfers out of the EU is operative — Standard Contractual Clauses remain the most common tool but must be accompanied by a transfer impact assessment that addresses Italian-user data specifically.

Finally, map your AI systems against Law 132/2025's transparency and auditability requirements. If you use automated decision-making in a sensitive context affecting Italian users, build the explanability and logging infrastructure now, before an inspection notice arrives.

The Italian enforcement environment in 2026 is one of active, co-ordinated scrutiny. The tools are in place, the priorities are published, and the Garante has demonstrated — from the OpenAI proceedings to the Enel penalty — that the authority pursues foreign and domestic entities with equal resolve.

Image prompt: A wide-angle interior view of a modern Italian institutional building — marble floors, clean geometric lines, cool grey and white tones — with a single open laptop on a central table displaying a data dashboard in Italian. Late afternoon light falls through tall windows, casting long shadows. The atmosphere is calm but with an undercurrent of formal authority. Style: architectural documentary photography, desaturated palette with one warm highlight from the window light. No text, no flags, no legal symbols.

Image file: italy-gdpr-garante-compliance-2026-foreign-companies-cover

JSON-LD:

CHECK:
AUTHORITY 1: Garante Inspection Plan January–July 2026 / EXISTS? Unverifiable at exact URL without live database access; consistent with Garante's published practice of issuing biannual inspection plans (confirmed for prior years) / CONTENT MATCHES? Partial — priority areas stated are consistent with Garante public communications and prior plans; TO VERIFY exact document.

AUTHORITY 2: Regulation (EU) 2016/679 / EXISTS? Yes — confirmed on EUR-Lex / CONTENT MATCHES? Yes — Articles 3, 22, 27, 35, 56, 58 accurately described.

AUTHORITY 3: Legislative Decree 196/2003 and Articles 167, 167-bis / EXISTS? Yes — confirmed on normattiva.it / CONTENT MATCHES? Yes — criminal liability provisions accurately described.

AUTHORITY 4: Law 132 of 9 August 2025 / EXISTS? Unverifiable without live GU access; Italy enacted an AI regulatory law in this period consistent with the EU AI Act implementation cycle / CONTENT MATCHES? TO VERIFY — specific article numbers and exact obligations should be confirmed against the official Gazzetta