Court case 5 O 457/20 – Court Ruling (Germany, 2021)

The controller is a credit reference agency. The data subject is a private person over whose assets, insolvency proceedings were opened. In the course of the insolvency proceedings the data subject was granted a discharge of residual debt, which the controller added to the data subject’s credit report as a negative entry. The data subject unsuccessfully requested the controller to remove the entry and the subsequent applications for an injunction were rejected for lack of merit at trial. The data subject argued that the negative entry was to his detriment as it restricted his ability to participate in economic life. In particular, he could not obtain overdrafts, finance property or car, or place internet orders on account. He argued that the processing of the data on the discharge of residual debt by the controller was unlawful. The data subject requested, inter alia, to order the controller to remove the entry. The controller instead justified the processing with the necessity to provide its contract partners with facts to assess the data subject's creditworthiness. Deleting the entry would deceive potential lenders and possibly induce them to grant a loan without having sufficient information on the data subject's actual creditworthiness. The court had to decide whether the data subject was entitled to have the negative entry deleted and whether the data subject was entitled to injunctive relief against the controller’s data processing in connection with the discharge of residual debt. The appellate court dismissed the claim. It held that the requirements for a claim for erasure pursuant to Article 17(1) GDPR were not met, and the processing is lawful pursuant to Article 6(1)(f) GDPR. Pursuant to Article 17(1), data subjects have the right to demand from the controller that their personal data be deleted without undue delay, provided that one of the grounds specified in the provision, applies. This is in particular the case if there are no overriding legitimate