Is the EU Parliament Pioneering AI Regulation While Encouraging Innovation?

EU Parliament: Leading in AI regulation - but also in innovation?

The EU Parliament’s decision to adopt the line community AI regulation is expected to make the EU a leader in regulating artificial intelligence (AI), according to Boniface de Champris, head of politics at the European branch of the IT association Computer & Communications Industry Association (CCIA). However, there are concerns about whether this leadership will also extend to AI innovation. The regulations should effectively address defined risks while allowing developers flexibility to create AI applications that benefit everyone. The CCIA is apprehensive about the strict requirements imposed by recent amendments, which affect not only high-risk cases but also less risky and useful AI applications. These excessive regulations could burden developers and impede innovation, making it harder for Europe to become a technology incubator.

Achim Berg, President of the digital association Bitkom, shares a similar view about the risk-based approach of the regulations. While he believes it is necessary to have strict requirements for high-risk areas, he warns against categorizing nearly every AI application as high-risk, as this would be impractical. Clarity and unambiguous guidelines are crucial for determining which conditions apply to specific circumstances to minimize legal uncertainty. Berg emphasizes the need for supervisory structures, market surveillance, and real laboratories as experimental spaces to effectively implement the AI regulation and ensure it accelerates development rather than hinder it.

Sebastian Cording, a partner at the commercial law firm CMS, explains that under the AI regulation, the specific areas of AI application and associated risks should be considered, rather than solely focusing on the area in which AI is used. This desire to regulate AI sensibly and establish the EU as a leading player in the field presents a significant challenge. The extent to which these goals can be achieved remains uncertain. However, a crucial step towards transparency is ensuring that consumers can differentiate whether they are interacting with a human or an AI.

Consumer advocacy groups have lauded the regulations for including provisions that address basic AI models, as they can be misleading. Granting individual rights to consumers, such as the right to an explanation from AI operators, is essential for protecting against unfair treatment. However, the EU consumer protection association BEUC criticizes Parliament for allowing developers too much discretion in determining whether their AI technology is high-risk. In contrast, the Free Software Foundation Europe (FSFE) welcomes the exemption of non-profit organizations and small free software projects from the regulations.

Ella Jakubowska from the civil rights organization European Digital Rights (EDRi) commends the vote for upholding red lines against harmful uses of AI, such as live facial recognition and other biometric surveillance. However, some representatives, like Axel Voss (CDU), regretted the complete ban on biometric recognition systems, stating that AI, when used correctly in law enforcement, could enhance public security. The decision allows AI-supported technologies like automated face recognition to be used with a court order for the search of perpetrators of serious crimes. Svenja Hahn (FDP), rapporteur, sees the result as a sign that Parliament is committed to protecting civil rights and advocating for a ban on biometric surveillance in public spaces, positioning the EU as a hub for AI research and innovation.

Patrick Breyer (Pirate Party) argues that biometric real-time surveillance has not prevented a single terrorist attack, contradicting the claims made by proponents of such systems. Sergey Lagodinsky, negotiator for the Greens, believes that the compromise reached strikes a balance between responsible regulation and incentives for innovation. He commends Parliament’s call for mandatory impact assessments for fundamental rights and climate impacts. Tabea Rößner, member of the Greens in the Digital Committee of the Bundestag, urges the implementation of sensible self-regulation, such as the planned EU AI Code, in conjunction with the AI regulation. Continuous risk monitoring by independent experts should also be considered due to the uncertainties surrounding the widespread adoption of basic AI models.

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