EU AI Act: Stricter Regulations & Hefty Fines for Artificial Intelligence Developers
The European Union (EU) is making significant progress in enacting the Artificial Intelligence Act (EU AI Act), which aims to regulate and govern the use and development of artificial intelligence (AI). The EU AI Act is considered the first comprehensive set of regulations designed to protect health, safety, fundamental rights, democracy, the rule of law, and the environment from the potential harmful effects of AI.
The EU AI Act is set to cover a wide range of stakeholders, including developers, distributors, importers, manufacturers, and providers within the EU. Additionally, it would extend its jurisdiction to providers and deployers of AI systems outside the EU if the output is intended for use within the EU.
The act introduces detailed rules for different levels of risk associated with AI systems. For example, developers involved in the AI development stage would be required to publish detailed summaries of the models used to train their systems.
One of the key aspects of the EU AI Act is the imposition of penalties and fines for violations. The severity of a violation could result in fines of up to €40 million ($43 million) or up to 7 percent of the violating company’s worldwide annual turnover, whichever amount is higher. This represents a significant increase compared to the fines under the General Data Protection Regulation (GDPR), which is limited to €10 million ($10.8 million) or up to 2 percent of a company’s global turnover.
To ensure fairness, the fines under the EU AI Act take into account the size of the organization and consider the interests of small and medium-sized enterprises (SMEs) and startups. The act recognizes the economic viability of SMEs and startups in its penalty provisions.
Under the EU AI Act, individuals also have the right to file complaints with the relevant national supervisory authority if they believe their rights have been infringed upon by an AI system.
The introduction of the EU AI Act has received mixed reactions from corporations involved in AI development. While some global technology companies agree that AI requires legislative regulations and international alignment, they also emphasize the need for meaningful voluntary actions by companies. Others have called for improvements in defining high-risk use cases and a better balance of responsibilities between developers and deployers.
The EU AI Act marks a significant development in the regulation of AI within the EU. With hefty fines at stake, it is crucial for all covered entities, including developers, distributors, importers, manufacturers, and providers, to carefully review the terms of the act and ensure compliance. As negotiations with EU institutions, including the council of the EU and the 27 member states, continue, the EU AI Act is expected to shape the future of AI development and use within the EU.
