Europe’s New Artificial Intelligence Rules’ Effects on Businesses 

June 28, 2021
Sarah Gormley

In April, the European Commission came out with the statement to regulate artificial intelligence. Their goal is to turn Europe into a global hub that uses trustworthy Artificial Intelligence through the combination of a legal framework on AI and a new Coordinated Plan with the Member States.

The new rules are greatly endorsed by privacy advocates. While it may be the best way to create a trustworthy Artificial Intelligence system, the new regulations could create drastic changes for businesses, changing how they operate completely. A survey from Gartner IT Service company shows that 37% of businesses use some kind of AI technologies. With the pandemic causing a surge in digital practices, a great number of organizations could be forced to check AI systems constantly or conduct risk assessments. Companies that go against the AI rules could face fines up to 6% of their global turnover or €30 million — whichever is the largest. This is very similar to the General Data Protection regulation’s (GDPR) consequences for not following its rules. 

High-Risk Business

The EU’s new regulations aim at “high-risk” AI systems on a greater level than other risk systems. These “high-risk” systems include facial recognition, self-driving cars, and all AI systems used in the financial industry. The steps that businesses developing AI systems will have to undertake include: a risk assessment, use of high-quality data to train systems, provide clear information to the user, constant detailed documentation on the system and its purpose to show compliance with the law, log activity to be recorded and tracked, and have appropriate human oversight to ensure a great level of security and accuracy.

Many businessmen and women have strong feelings against this new system, including Guillaume Couneskn, partner at law firm Linklaters in Brussels who believe that “if inappropriately calibrated, this approach could stifle innovation and create barriers to the adoption of AI in the European Union.”

Black-Box Solution 

AI typically acts under a glass box solution, meaning that businesses have full visibility into the inner workings of their machines. The new black box solution that will be implemented prevents organizations from seeing the inner workings of machines, keeping them from understanding how machines reach decisions. Andre Franca, Director of Applied Science at Deep-tech company causaLens shows backlash of this idea in her statement that “With fines of up to 4% of a firm’s global annual turnover, it’s imperative that organisations are able to understand how their AI models work to prove compliance to regulators and the board.”

Non-AI System Users Affected

The amount of personal and sensitive data an industry processes determines how closely they will be inspected, whether they develop the AI systems in question or not. The sectors that will most likely be targeted the most include healthcare, transport, and essential public services. 

The effects on businesses stated above are merely possibilities that businessmen and women have come up with. It is hard to determine what the actual result of the new Artificial Intelligence system will be until it is put into action.

 

Reference:

“GDPR 2.0: What Do Europe’s New AI Rules Mean for Businesses?” TechCentral.ie, 28 June 2021, www.techcentral.ie/gdpr-2-0-what-do-europes-new-ai-rules-mean-for-businesses/.

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