The rapid expansion of IoT technology, as one of the most significant manifestations of digital transformation, has resulted in an unprecedented increase in the large-scale collection, processing, and exchange of personal data. Features such as constant device connectivity, automated processing, and big data analytics have generated fundamental challenges in the field of privacy. The primary objective of this study is to elucidate privacy risks within the IoT environment and to assess the management of these risks under the framework of GDPR of the European Union. This research is theoretical in nature and adopts a descriptive–analytical approach, drawing upon library-based sources to examine issues such as location tracking, data attribution and re-identification, and information security breaches in IoT ecosystems. The findings indicate that the data-driven nature of IoT systems, absent the integration of protective requirements at the design stage, may lead to widespread violations of individuals’ fundamental rights. In contrast, the GDPR framework, by institutionalizing principles such as transparency, accountability, data minimization, and data protection by design, provides a preventive and structural approach to risk management. Achieving a balance between technological innovation and the safeguarding of fundamental rights is possible only through a proactive and rights-based approach to data governance.