European Union agrees to first law in the world to regulate Artificial Intelligence ( AI )

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Following 3-day ‘marathon’ talks, the Council presidency and the European Parliament’s negotiators have reached a provisional agreement on the proposal on harmonised rules on artificial intelligence (AI), the so-called artificial intelligence act. 

The draft regulation aims to ensure that AI systems placed on the European market and used in the EU are safe and respect fundamental rights and EU values. This landmark proposal also aims to stimulate investment and innovation on AI in Europe.

The main elements of the provisional agreement

Compared to the initial Commission proposal, the main new elements of the provisional agreement can be summarised as follows:

  1. rules on high-impact general-purpose AI models that can cause systemic risk in the future, as well as on high-risk AI systems
  2. a revised system of governance with some enforcement powers at EU level
  3. extension of the list of prohibitions but with the possibility to use remote biometric identification by law enforcement authorities in public spaces, subject to safeguards
  4. better protection of rights through the obligation for deployers of high-risk AI systems to conduct a fundamental rights impact assessment prior to putting an AI system into use.

In more concrete terms, the provisional agreement covers the following aspects:

Definitions and scope

To ensure that the definition of an AI system provides sufficiently clear criteria for distinguishing AI from simpler software systems, the compromise agreement aligns the definition with the approach proposed by the OECD.

The provisional agreement also clarifies that the regulation does not apply to areas outside the scope of EU law and should not, in any case, affect member states’ competences in national security or any entity entrusted with tasks in this area. Furthermore, the AI act will not apply to systems which are used exclusively for military or defence purposes. Similarly, the agreement provides that the regulation would not apply to AI systems used for the sole purpose of research and innovation, or for people using AI for non-professional reasons. 

AI Act: different rules for different risk levels

The new rules establish obligations for providers and users depending on the level of risk from artificial intelligence. While many AI systems pose minimal risk, they need to be assessed.


Unacceptable risk

Unacceptable risk AI systems are systems considered a threat to people and will be banned. They include:

  1. Cognitive behavioural manipulation of people or specific vulnerable groups: for example voice-activated toys that encourage dangerous behaviour in children
  2. Social scoring: classifying people based on behaviour, socio-economic status or personal characteristics
  3. Real-time and remote biometric identification systems, such as facial recognition

Some exceptions may be allowed: For instance, “post” remote biometric identification systems where identification occurs after a significant delay will be allowed to prosecute serious crimes but only after court approval.

High risk

AI systems that negatively affect safety or fundamental rights will be considered high risk and will be divided into two categories:

1) AI systems that are used in products falling under the EU’s product safety legislation. This includes toys, aviation, cars, medical devices and lifts.

2) AI systems falling into eight specific areas that will have to be registered in an EU database:

  1. Biometric identification and categorisation of natural persons
  2. Management and operation of critical infrastructure
  3. Education and vocational training
  4. Employment, worker management and access to self-employment
  5. Access to and enjoyment of essential private services and public services and benefits
  6. Law enforcement
  7. Migration, asylum and border control management
  8. Assistance in legal interpretation and application of the law.

All high-risk AI systems will be assessed before being put on the market and also throughout their lifecycle.

Generative AI

Generative AI, like ChatGPT, would have to comply with transparency requirements:

  1. Disclosing that the content was generated by AI
  2. Designing the model to prevent it from generating illegal content
  3. Publishing summaries of copyrighted data used for training

Limited risk

Limited risk AI systems should comply with minimal transparency requirements that would allow users to make informed decisions. After interacting with the applications, the user can then decide whether they want to continue using it. Users should be made aware when they are interacting with AI. This includes AI systems that generate or manipulate image, audio or video content, for example deepfakes.

General purpose AI systems and foundation models

New provisions have been added to take into account situations where AI systems can be used for many different purposes (general purpose AI), and where general-purpose AI technology is subsequently integrated into another high-risk system. The provisional agreement also addresses the specific cases of general-purpose AI (GPAI) systems.

A new governance architecture

Following the new rules on GPAI models and the obvious need for their enforcement at EU level, an AI Office within the Commission is set up tasked to oversee these most advanced AI models, contribute to fostering standards and testing practices, and enforce the common rules in all member states. A scientific panel of independent experts will advise the AI Office about GPAI models, by contributing to the development of methodologies for evaluating the capabilities of foundation models, advising on the designation and the emergence of high impact foundation models, and monitoring possible material safety risks related to foundation models.

The AI Board, which would comprise member states’ representatives, will remain as a coordination platform and an advisory body to the Commission and will give an important role to Member States on the implementation of the regulation, including the design of codes of practice for foundation models. Finally, an advisory forum for stakeholders, such as industry representatives, SMEs, start-ups, civil society, and academia, will be set up to provide technical expertise to the AI Board.

Penalties

The fines for violations of the AI act were set as a percentage of the offending company’s global annual turnover in the previous financial year or a predetermined amount, whichever is higher. 

However, the provisional agreement provides for more proportionate caps on administrative fines for SMEs and start-ups in case of infringements of the provisions of the AI act.

The compromise agreement also makes clear that a natural or legal person may make a complaint to the relevant market surveillance authority concerning non-compliance with the AI act and may expect that such a complaint will be handled in line with the dedicated procedures of that authority.

Entry into force

The provisional agreement provides that the AI act should apply two years after its entry into force, with some exceptions for specific provisions.

Reference:

  1. European Council ( Council of the European Union )
  2. European Commission
  3. European Parliament

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