The European Union has introduced the EU Artificial Intelligence Act, a comprehensive law that regulates the use of AI systems in the EU. In this series, ‘Decoding AI: The European Union’s Take on Artificial Intelligence’, we break down everything you need to know about the law for you.

Before we dive in, make sure to get your free copy of Palqee’s EU AI Act Framework. The first of its kind with a useful guide on AI compliance. You can download it here!

In April 2021, the European Commission introduced a ground-breaking proposal to regulate artificial intelligence (AI) within the European Union (EU). The proposed legislation, known as the EU AI Act, aims to establish a comprehensive framework for governing the use, deployment and sales of AI systems. While the final text of the AI Act is yet to be determined, significant progress has been made towards its implementation.

On June 14, 2023, the European Parliament made a significant advancement by adopting its negotiating position on the AI Act. The Parliament showed overwhelming support with 499 votes in favour, 28 against, and 93 abstentions.

Even though this adoption does not represent the final text of the EU AI Act, it is anticipated that the core content of the regulation will remain largely unchanged as it progresses through the legislative process. This initial proposal is considered to be well-crafted and comprehensive. It is expected that any revisions to the text will likely focus on incorporating additional chapters related to sustainability, such as addressing the carbon footprint generated by AI systems. These additions would further enhance the regulatory framework and align it with evolving environmental considerations.

The EU AI Act will now enter the trialogue process, involving negotiations among the European Parliament, the EU Council, and the European Commission. This process aims to reach a provisional agreement that satisfies the co-legislators (Parliament and Council), with the Commission acting as a mediator. The finalised agreement will then proceed through the formal procedures of each institution.

The EU AI Act provides us with:

A. Harmonised rules for the placing on the market, the putting into service and the use of artificial intelligence systems (‘AI systems’) in the Union,

B. Prohibitions of certain artificial intelligence practices,

C. Specific requirements for high-risk AI systems and obligations for operators of such systems,

D. Harmonised transparency rules for AI systems intended to interact with natural persons, emotion recognition systems and biometric categorisation systems, and AI systems used to generate or manipulate image, audio or video content, and

E. Rules on market monitoring and surveillance.

The AI Act classifies AI systems into the following categories:

A. Prohibited AI systems: It prohibits applications and systems that create unacceptable risks, such as government-run social scoring systems,

B. High-risk AI systems: applications, like CV-scanning tools for job ranking, are subject to specific legal requirements, and

C. Applications not explicitly banned or classified as high-risk, such as the systems that interact with humans (chatbots) or generate or manipulate content (deep fakes).

This balanced approach aims to address potential risks associated with AI technology while fostering innovation.

The Regulation applies to:

A. Providers who make AI systems available on the market or put them into service within the Union, regardless of whether they are based in the Union or a third country,

B. Users of AI systems located within the Union, and

C. Providers and users of AI systems located in a third country if the output generated by the system is used within the Union.

To international companies this means that if they offer AI systems for sale or use them within the European Union, they are subject to the Regulation, regardless of whether they are based in the EU or in another country.

It also means that if they have users of AI systems located within the EU, they need to comply with the Regulation. Furthermore, if they are located in a third country but their AI system's output is used within the EU, they are also covered by the Regulation.

In summary, the Regulation has a broad reach and applies to both providers and users of AI systems, irrespective of their location, as long as there is an impact or connection to the European Union. International companies operating in the EU must ensure compliance with the Regulation's requirements.

Similar to the European Union's General Data Protection Regulation (GDPR) in 2018, the EU AI Act has the potential to become a global standard for AI regulation. It will play a crucial role in determining how AI technology is utilised worldwide, emphasising its positive impact on people's lives.

The European Union's AI Act represents a significant milestone in the regulation of AI technologies. While the final text is yet to be confirmed, the progress made thus far indicates the EU's commitment to ensuring the responsible and ethical use of AI. As the trialogue negotiations continue, the global impact of the AI Act is becoming increasingly evident, with the potential to shape the future of AI regulation worldwide.

Lastly, given the rapid advancements in technology and the widespread adoption of AI systems, it is anticipated that the regulation will entry force within the next two years to keep pace with the evolving AI landscape.