Is EU’s Proposed AI Regulation A Threat To Tech Companies?

Tech companies in the EU might face a hefty fine because of the proposed artificial intelligence regulations.

The European Union is planning to regulate artificial intelligence which can be daunting for companies that took a stand against the rules on mass surveillance and discrimination. Draft legislation that got leaked prior to its official release suggests that the EU is trying to find another way on AI regulation, something that's between the U.S and the Chinese rules.

This will result in a ban on AI that's designed to manipulate people, carry out indiscriminate surveillance, and a hefty fine. While there's still some uncertainty around the regulations being applicable for the advertising industry or not, what is certain is that the military and any agency that works for public security are exempted.

To prevent racial, gender, and age bias in the artificial intelligence systems, some risky activities will be allowed under stringent guidelines and controls. The possible targets for such bans are systems that automate job recruitments, assigning places at education institutions, measuring credit scores, and processing visa applications. The hefty we were talking about earlier can amount to 20 million euros or 4% of the global turnover.

To many, this news is not surprising as the president of the European Commission, Ursula von der Leyen has been hinting about bringing AI legislation into action since 2019, the time she was elected. This idea isn't without opposition, though. Lilian Edwards from the Newcastle University says that these laws will impact the tech industry in ways that will cause a decline. "I applaud the ambition, you can't imagine it getting through in this state", Lilian said.

Lilian points out that this approach of artificial intelligence legislation is similar to how the EU regulates consumer products, where it's a must to meet certain requirements before importing. "That's much harder to do with AI as it's not always a simple product," she adds. "You're heading inexorably towards a trade war with Silicon Valley or weak enforcement."

Lilian's concern about Silicon Valley justifies a fact that both China and the US have made big advancements to implement the use of artificial intelligence technology across various industries, including national security and law enforcement. China monitors the everyday movement of its citizens with facial recognition, while the US is on a probable stance of a free-market approach to regulation, as suggested by Donald Trump's administration on which the current president Joe Biden has taken no stance.

Access Now is one of the groups in Europe that advised the EU on AI. Daniel Laufer of that group says there can be big red flags around some aspects of the draft legislation, for example, the creation of a European Artificial Intelligence Board. He said, "they will have a huge amount of influence over what gets added to or taken out of the high-risk list and the prohibition list."

While the EU has been previously successful in influencing non-EU countries to take inspiration from its General Data Protection Regulation, it's wait to see if the UK will follow suit in regulating AI, now that it split.