PYMNTS MonitorEdge May 2024

European Council Approves AI Act, Says It Sets Global Standard

EU, AI Regulation, AI Act

The European Council (EC) has approved the Artificial Intelligence (AI) Act, saying this law is the first of its kind in the world and may set a global standard for the regulation of AI.

The new law aims to harmonize rules on AI; promote the use of “safe and trustworthy” AI systems across the European Union (EU); and ensure respect of the rights of EU citizens, the EC said in a Tuesday (May 21) press release.

“With the AI act, Europe emphasizes the importance of trust, transparency and accountability when dealing with new technologies while at the same time ensuring this fast-changing technology can flourish and boost European innovation,” Mathieu Michel, Belgian secretary of state for digitization, administrative simplification, privacy protection and the building regulation, said in the release.

The new law categorizes different types of AI according to risk and applies different requirements and obligations to “limited risk” and “high risk” AI systems, according to the release.

It bans from the EU some uses of AI whose risk has been deemed unacceptable, including cognitive behavioral manipulation, social scoring, predictive policing based on profiling, and the use of biometric data to categorize people, the release said.

Companies that break the law are subject to fines based on a percentage of their global annual turnover in the previous year or a predetermined amount, whichever is higher, per the release.

To protect the rights of EU citizens, the AI Act requires an assessment of the impact on fundamental rights from high-risk AI systems to be deployed by providers of public services; the registration in an EU database for high-risk AI systems; and the notification of people who are being exposed to an emotion recognition system, according to the release.

To promote innovation in the sector, the new law will implement AI regulatory sandboxes that will allow for the testing of AI systems in real-world conditions, the release said.

The AI Act will be published in the EU’s Official Journal in the coming days, will enter into force 20 days after publication, and will apply two years after its entry into force, per the release.

The EU’s 27 member states unanimously endorsed the final text of the AI Act on Feb. 2 after moving past concerns by some nations about the Act’s potential to hamstring AI innovation, PYMNTS reported at the time.