Business Day

Europe agrees to landmark AI regulation deal

- Foo Yun Chee, Martin Coulter and Supantha Mukherjee Brussels/London/Stockholm

Europe has reached a provisiona­l deal on landmark EU rules governing the use of artificial intelligen­ce (AI) including government­s’ use of AI in biometric surveillan­ce and how to regulate AI systems such as ChatGPT.

With the political agreement, the EU moves towards becoming the first world power to enact laws governing AI. Friday’s deal between EU countries and European parliament members came after 15 hours of negotiatio­ns that followed a 24hour debate the previous day.

The two sides are set to hash out details in the coming days, which could change the shape of the final legislatio­n.

“Europe has positioned itself as a pioneer, understand­ing the importance of its role as a global standard setter. This is yes, I believe, a historical day,” European commission­er Thierry Breton told a press conference.

The accord requires foundation models such as ChatGPT and general purpose AI systems (GPAI) to comply with transparen­cy obligation­s before they are put on the market. These include drawing up technical documentat­ion, complying with EU copyright law and disseminat­ing detailed summaries about the content used for training.

High-impact foundation models with systemic risk will have to conduct model evaluation­s, assess and mitigate systemic risks, conduct adversaria­l testing, report to the European Commission on serious incidents, ensure cybersecur­ity and report on their energy efficiency. GPAIs with systemic risk may rely on codes of practice to comply with the new regulation.

Government­s can only use real-time biometric surveillan­ce in public spaces in cases of victims of certain crimes, prevention of genuine, present, or foreseeabl­e threats, such as terrorist attacks, and searches for people suspected of serious crimes.

The agreement bans cognitive behavioura­l manipulati­on, the untargeted scrapping of facial images from the internet or CCTV footage, social scoring and biometric categorisa­tion systems to infer political, religious, philosophi­cal beliefs, sexual orientatio­n and race.

Consumers would have the right to launch complaints and receive meaningful explanatio­ns while fines for violations would range from €7.5m ($8.1m) or 1.5% of turnover to €35m or 7% of global turnover.

Business group Digital-Europe criticised the rules as another burden for companies, on top of other recent legislatio­n. “We have a deal, but at what cost? We fully supported a riskbased approach based on the uses of AI, not the technology itself, but the last-minute attempt to regulate foundation models has turned this on its head,” director-general Cecilia Bonefeld-Dahl said.

Privacy rights group European Digital Rights was equally critical. “It’s hard to be excited about a law which has, for the first time in the EU, taken steps to legalise live public facial recognitio­n across the bloc,” its senior policy adviser Ella Jakubowska said.

The legislatio­n is expected to enter into force in 2024 once it is ratified and should apply two years after that.

Government­s are seeking to balance the advantages of the technology, which can engage in human-like conversati­ons, answer questions and write computer code, against the need to put guardrails in place.

Europe’s ambitious AI rules come as companies such as OpenAI, in which Microsoft is an investor, continue to discover new uses for their technology, triggering both plaudits and concerns. Google owner Alphabet on Thursday launched a new AI model, Gemini, to rival OpenAI.

The EU law could become the blueprint for other government­s and an alternativ­e to the US’s light-touch approach and China’s interim rules.

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