The Call for Regulating AI and Its Implications for Business

While the European Parliament is making significant strides in formulating comprehensive regulations for artificial intelligence through the proposed Artificial Intelligence Act (AI Act), the implications for businesses are becoming increasingly evident. The Act’s provisions, including risk classifications, transparency requirements, and substantial penalties for non-compliance, highlight the EU’s commitment to ensuring responsible and ethical AI practices while safeguarding the rights and safety of individuals.

Thierry Breton, the EU’s Commissioner for Internal Market, stated, “[AI] has been around for decades but has reached new capacities fueled by computing power.” The primary objective of the Artificial Intelligence Act is to “strengthen Europe’s position as a global hub of excellence in AI from the lab to the market, ensure that AI in Europe respects our values and rules, and harness the potential of AI for industrial use.” It is clear that the position is to be a leading centre for AI expertise, whilst guaranteeing that deployment of AI technology adheres to the values and regulations of the EU generally.

The European Commission originally proposed the Artificial Intelligence Act in April 2021. In late 2022, the European Council adopted a general approach position on the legislation, which is currently being discussed in the European Parliament. This narrows the definition of AI as developed through machine learning, logic-based approaches and knowledge-based approaches. The general approach further defined the scope for law enforcement.

Once the European Parliament formulates its position on the legislation, the law will enter a phase of interinstitutional negotiations known as trilogues. Trilogues involve negotiations among lawmakers to finalise and implement the law. Given the complexity of legislation like the Artificial Intelligence Act, this could be a lengthy process and involve several revisions to address the sticking points.

The parliamentary committees for Civil Liberties and the Internal Market jointly adopted the text by a large majority. The next step is adoption in plenary, with June 14 set as the provisional date. Once MEPs have formalised their position, the proposal will enter the final stage of the legislative process, kicking off negotiations with the Council and the EU Commission.