European Union lawmakers have given the final approval to the EU’s landmark, risk-based regulations for artificial intelligence. The Council of the European Union hailed the AI Act as “groundbreaking” and noted that as the first of its kind worldwide, it has the potential to set a global benchmark for AI regulation. This final approval follows the European Parliament’s endorsement in March.
With the Council’s green light, the legislation will be published in the EU’s Official Journal in the coming days, and the law will come into force 20 days afterward. The new regulations will be implemented in phases, with some provisions taking effect immediately, while others will be applicable after two years or more.
Risk-Based Regulation Framework
The AI Act adopts a risk-based approach to AI regulation, categorising AI applications into different risk levels:
- Unacceptable Risk: The law bans a handful of applications outright, such as those involving cognitive behavioral manipulation or social scoring.
- High Risk: Applications like biometrics, facial recognition and AI used in education and employment sectors fall under this category. These will require developers to register their systems and comply with stringent risk and quality management standards.
- Limited Risk: Applications such as chatbots will face lighter transparency obligations.
Generative AI and General-Purpose AI
The AI Act also addresses the rise of generative AI tools, including general-purpose AI (GPAI) models like OpenAI’s ChatGPT. While most GPAIs will be subject to limited transparency requirements, those that meet a certain compute threshold and are considered to pose systemic risks will face stricter regulations.
Governance and Enforcement
To ensure effective implementation, the AI Act establishes a new governance structure:
- AI Office: A new enforcement body within the European Commission.
- AI Board: Comprising representatives from EU member states to assist in the consistent application of the law, akin to the European Data Protection Board’s role with the GDPR.
- Scientific Panel: To support oversight and provide technical expertise.
- Advisory Forum: To offer technical guidance and insights.
Support for Innovation
The AI Act encourages the development and real-world testing of innovative AI applications through regulatory sandboxes. This controlled environment aims to foster innovation while ensuring compliance with safety and ethical standards.
Protection of Fundamental Rights
High-risk AI systems must undergo fundamental rights impact assessments before deployment, particularly for public services. The regulation mandates increased transparency in the development and use of high-risk AI systems, including the requirement for public entities using emotion recognition systems to inform individuals when they are exposed to such technology.
Penalties for Non-Compliance
Companies that violate the AI Act could face significant fines, calculated as a percentage of their global annual turnover or a predetermined amount, whichever is higher. SMEs and startups will face proportional administrative fines.
Next Steps
Following signatures from the presidents of the European Parliament and the Council, the legislative act will be published in the EU’s Official Journal and will enter into force 20 days post-publication. The new regulation will become applicable two years after its entry into force, with some exceptions for specific provisions.
Conclusion
Mathieu Michel, Belgian Secretary of State for Digitisation, stated, “The adoption of the AI Act is a significant milestone for the European Union. This landmark law addresses a global technological challenge, creating opportunities for our societies and economies. With the AI Act, Europe emphasizes the importance of trust, transparency, and accountability while ensuring this fast-changing technology can flourish and boost European innovation.”
The EU AI Act is poised to create a robust regulatory environment for AI, fostering innovation while safeguarding fundamental rights, and setting a precedent for AI regulation globally.
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