Europe Leads in Ethical AI Development Through Landmark Regulation


In December 2023, the European Council and Parliament reached a provisional agreement on Europe’s inaugural artificial intelligence (AI) legislation, known as the AI Act. This regulation, building upon the 2021 proposal from the European Commission, marks a significant milestone in global AI regulation.

In terms of regulation, the year 2024 will have two very distinct parts. Until the European elections, which will take place in the middle of the year, the authorities will focus on reaching agreements on open standards, which could lead to significant progress in many areas. After that date, there is more uncertainty about the work agenda to be defined by the new European authorities, but it is expected that their activity will follow a continuous line.

Specifically, the main areas of work are expected to be the “digital” one with MiCA Regulation, artificial intelligence, Open finance, PSD3, and instant payments, and the “sustainability” side including Corporate Sustainability Due Diligence Directive’ (CSD) and greenwashing.

Europe Leads in Ethical AI Development Through Landmark Regulation (1)

The AI Act will affect both the public and private sectors, applying to established providers and developers of AI technologies within the European Union and those offering services to EU citizens, regardless of physical establishment.

The regulation categorizes AI applications based on risk levels, imposing various obligations on developers and distributors depending on the type of applications they commercialize or use.

Prohibited practices include social profiling, biometric identification techniques in public spaces, and emotion recognition in workplaces or educational institutions. Meanwhile, high-risk applications encompass critical infrastructure control, educational or vocational training, employment, law enforcement, migration, asylum management, border control, justice administration, and democratic processes. High-risk applications must undergo compliance assessment with the regulation and be notified to competent authorities.

For general-purpose AI applications, system transparency is a primary obligation, ensuring users are aware they are interacting with a machine.

The implementation of this legislation will significantly impact both individuals and businesses. European citizens will enjoy enhanced protection concerning AI usage in their daily lives, while companies must ensure compliance with regulatory requirements to avoid penalties and loss of public trust.

Europe Leads in Ethical AI Development Through Landmark Regulation (3)

The regulation aims not only to mitigate AI risks but also to strike a balance between innovation and safeguarding fundamental rights in AI development and use. This law will not only affect individuals and companies in Europe but also shape AI development and regulation globally.

Key objectives of the European AI Law include ensuring a high level of protection for European citizens, establishing a robust ethical foundation for AI, providing a framework for the development of reliable, transparent, and responsible AI by European companies, promoting the correct and limited use of AI, and reinforcing adequate human oversight and ensuring traceability and monitoring in the use of AI systems.

Key points of the new AI law encompass protecting fundamental rights, prohibiting AI system use for mass surveillance or worker reliability assessments, imposing obligations on businesses regarding AI system development, implementation, and usage, regulating generative AI systems for transparency and copyright compliance, and addressing the utilization of biometric identification cameras in public spaces for national security purposes.

The European AI law is expected to take effect in 2026, with a phased 12-month implementation period. Penalties for non-compliance may reach up to 7% of a company’s annual turnover or fines of up to €35 million for specific cases.

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