Following three-day ‘marathon’ talks, the Council presidency and the European Parliament’s negotiators have reached a provisional agreement on the proposal on harmonised rules on artificial intelligence (AI), the so-called artificial intelligence act. The draft regulation aims to ensure that AI systems placed on the European market and used in the EU are safe and respect fundamental rights and EU values. This landmark proposal also aims to stimulate investment and innovation on AI in Europe.
This is a historical achievement, and a huge milestone towards the future. Today’s agreement effectively addresses a global challenge in a fast-evolving technological environment on a key area for the future of our societies and economies. And in this endeavour, we managed to keep an extremely delicate balance: boosting innovation and uptake of artificial intelligence across Europe whilst fully respecting the fundamental rights of our citizens. – Carme Artigas, Spanish secretary of state for digitalization and artificial intelligence
The AI act, as a flagship legislative initiative, has the potential to foster the development and uptake of safe and trustworthy AI across the EU’s single market by both private and public actors. The main idea is to regulate AI based on the latter’s capacity to cause harm to society following a ‘risk-based’ approach: the higher the risk, the stricter the rules. As the first legislative proposal of its kind in the world, it can set a global standard for AI regulation in other jurisdictions, just as the GDPR has done, thus promoting the European approach to tech regulation on the world stage.
Compared to the initial Commission proposal, the main new elements of the provisional agreement can be summarised as follows:
1. Rules on high-impact general-purpose AI models and high-risk AI systems
2. A revised system of governance with some enforcement powers at EU level
3. Extension of the list of prohibitions with safeguards for remote biometric identification by law enforcement authorities
4. Better protection of rights through fundamental rights impact assessment prior to deploying high-risk AI systems
The provisional agreement also covers aspects such as definitions and scope, classification of AI systems, law enforcement exceptions, general-purpose AI systems and foundation models, a new governance architecture, penalties, transparency, protection of fundamental rights, and measures in support of innovation.
The fines for violations of the AI act have been set as a percentage of the offending company’s global annual turnover, with provisions for more proportionate caps on administrative fines for SMEs and start-ups in case of infringements.
The provisional agreement provides for a fundamental rights impact assessment before a high-risk AI system is put in the market by its deployers, increased transparency regarding the use of high-risk AI systems, and measures in support of innovation, including AI regulatory sandboxes for testing of innovative AI systems in real-world conditions.
Following today’s provisional agreement, work will continue at the technical level to finalize the details of the new regulation. The presidency will submit the compromise text to the member states’ representatives for endorsement, followed by confirmation by both institutions and legal-linguistic revision before formal adoption by the co-legislators.
The Commission proposal, presented in April 2021, is a key element of the EU’s policy to foster the development and uptake across the single market of safe and lawful AI that respects fundamental rights. The proposal follows a risk-based approach and lays down a uniform, horizontal legal framework for AI that aims to ensure legal certainty, promote investment and innovation in AI, enhance governance and effective enforcement of existing law on fundamental rights and safety, and facilitate the development of a single market for AI applications.
This agreement marks a significant step toward creating a cohesive and future-focused approach to AI regulation in the EU, setting a benchmark for global AI policy and paving the way for increased innovation and safety in the field of artificial intelligence.
Market Capital Research 