Euro AI Act should be studied carefully

THE European Parliament has recently passed landmark legislation for the regulation of artificial intelligence (AI), the first such attempt at imposing some regulatory order on the promising but risky, rapidly growing technology. As the Philippines is still searching for an effective regulatory response to the spread of AI, the EU’s new AI Act should be studied carefully.

The AI Act was approved by the European Parliament on March 13 and establishes a classification for AI products based on their level of risk to privacy and security, imposing increasing degrees of regulatory scrutiny accordingly. The act is rather broad, covering seven key areas of concern.

Among these are strict guidelines and deployment of AI products with respect to cybersecurity to ensure that they are resilient against cyberattacks; increased transparency concerning the data used for training AI systems, the decision-making processes of AI, and measures taken to ensure privacy and security; enhancing data protection; increased accountability of organizations for security breaches involving AI systems; mitigation measures against bias and discrimination in AI systems; regulating or in some cases prohibiting certain uses of AI to prevent malicious use, such as creating so-called deep fakes or automated cyberattack programs; and establishing a framework of certification and compliance audits for AI developers and their products.

With AI expanding so quickly, there is a critical need to determine the appropriate way to regulate it while it is still relatively new because the more widespread its use becomes, the more difficult it will be to impose the necessary controls. Developing and implementing regulation at an early stage will also make it more likely that the regulatory guidance can encourage rather than stifle innovation.

We believe this is an important point because while there is a great deal of attention paid to the potential harm that AI can cause, it is a fact that AI potentially offers a vast spectrum of benefits. EU officials have emphasized this as well; by establishing necessary regulatory guardrails early, developers are guided in what is acceptable and what is not so that the need to enforce restrictive regulation is reduced.

Policymakers in the Philippines have traditionally been reluctant to borrow or imitate potentially useful ideas and practices from other places, often to the country’s detriment, we believe. Regulation of AI, however, should not be another area in which the government seeks to “reinvent the wheel.” There are several practical reasons for this.

First, the Philippines has an opportunity to become a leader in AI development, building on the country’s long and successful experience in the BPO industry and our considerable talent pool. Having effective regulation of AI is a necessary step on that path to raising the country’s profile because it would establish the Philippines as a “safe space” for AI and other tech investment and development.

Second, while policymakers have recognized the need for some form of regulation of AI, there has not been any model to guide the discussion and development of the needed measures until now. The new EU regulations may not, in their small details, be entirely appropriate or relevant here, but in their overall perspective, they would seem to be quite useful; perhaps not a template to simply be copied, but certainly a road map to the direction the Philippines ought to take.

Third, there is the simple matter of time. AI is developing so quickly that policymakers do not have the leisure to start from square one and spend years developing a regulatory framework because the results would almost certainly be outdated by the time it can be implemented. Using the new EU regulations as a starting point helps to accelerate the process.

Finally, there is the practical consideration that the EU’s AI regulations will affect trade in services between the Philippines and the EU. With the stalled EU-Philippines Free Trade Agreement (FTA) talks anticipated to restart this year, some level of alignment with EU regulations is going to be required. Even if that broader trade agreement takes some time to develop or is not completed at all, existing trade will still be affected in much the same way some Philippine exports will eventually be affected by the EU’s Carbon Adjustment Border Mechanism (CABM) and other regulations. In other words, aligning with the EU now will save a great deal of potential difficulty later on.