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The Artificial Intelligence Act (the "AI Act") is coming to you soon….  


On 16 June 2023, the European Parliament passed the text of the Artificial Intelligence Act (the "AI Act") by an overwhelming majority. The AI ACT paves the way for the European Council to debate the text of the AI Act in the coming weeks and is one step closer to its formal introduction into law.

As currently drafted, the AI Act seeks to ensure that the development and use of AI is fully aligned with the rights of individuals across the EU. If passed, the AI Act will be the first large-scale framework for using Artificial Intelligence ("AI") globally.

The AI Act does this in many ways.

The first of these is the introduction of a ban on 'Prohibited AI practices.'

These practices are those that meet an unacceptable risk to an individual's rights and safety and are outlined in Article 5 of the AI Act and include, amongst others:

  • The use of facial recognition technology in public places;
  • AI, which may influence political campaigns;
  • Social scoring AI which classifies people based on specific characteristics or behaviours; and
  • Emotion recognition AI.

The AI Act

  • Seeks to regulate more limited-risk AI models, including placing an obligation on creators of 'Foundation Models' to register these with an EU database before entering the market;
  • Sets certain obligations upon the creators of generative AI systems (such as Chat GPT) to offer greater transparency to end users and ensure that details of copyrighted data used to train their AI systems are publicly available.
  • Sets transparency obligations to include disclosing when AI generates content and to help identify deep fake images.
  • Will provide EU citizens with a facility to file complaints regarding AI through a new EU AI Office; it will also require each member state to appoint a 'national supervisory authority' to oversee the implementation and ongoing use of the AI Act locally throughout the EU.

A breach of these 'Prohibited AI practices' is subject to an administrative fine of up to €40,000,000 or, if the offender is a company, up to 7% of their global turnover in the prior year. The scale of this fine indicates how seriously the EU is taking the development and use of such prohibited practices.

We should also note that the regulatory changes envisaged by the AI Act are not without controversy, particularly in light of the recent addition of obligations relating to foundation models.

On 30 June, executives of over 150 key businesses, technology companies and investment firms from across the EU sent an open letter to the European Commission. This letter warns of the potential limitations on the development of AI by introducing the AI Act and possible restrictions on global competitiveness for developers of AI within the EU.

Whilst the letter acknowledges the need for the regulation of AI, it specifically calls for the formation of a new EU regulatory body that can monitor how AI laws are applied and consider additional technological advances that may be relevant to the development of legislation in this area.



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