Proposal for a Regulation on Artificial Intelligence (Artificial Intelligence Act)

On 21 April 2021, the European Commission proposed for a Regulation laying down harmonised rules on artificial intelligence (Artificial Intelligence Act). The initiative is a result of a coordinated European approach on the human and ethical implications of AI which represents a major legislative global advancement in the industry. The first proposal of its kind, the scheme is to be binding, impacting businesses across many sectors of the economy. It also has a number of hurdles to overcome before its enactment. The proposal has been said to:

promote the development of AI and address the potential high risks it poses to safety and fundamental rights equally, the Commission is presenting both a proposal for a regulatory framework on AI and a revised coordinated plan on AI.[1]

The AI Regulation defines AI systems as “software that is developed with one or more of [certain] approaches and techniques . . . and can, for a given set of human-defined objectives, generate outputs such as content, predictions, recommendations, or decisions influencing the environments they interact with.” 

Broadly, the proposal separated AI into three categories. Firstly, imposes especially strict obligations in relation to “high-risk AI systems.” These are AI systems that create a high risk to the health and safety or fundamental rights of natural persons. Secondly, it limits the considered “low-risk AI systems”. The third and wider category requires AI to be ‘flagged’.

The proposal contains a whole host of new duties for those who put into circulation what the proposal defines as “high-risk AI”. Categories of high-risk AI includes – AI intended to be used in” critical infrastructure, educational institutions (including access to and performance within such institutions) and employment for example.

Overall, the legislation proposed attempts to foster innovation yet not stifle the research and development of AI. Whether this is wholly welcomed in the industry or seen as a barrier to development is not yet known. But it is likely that these broad obligations will shape regulatory expectations in relation to AI systems and have a significant impact in major sectors of the economy.