EU Formulates a Sweeping Data Handling and AI Policy as Tech Companies Look on in Apprehension

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The EU today outlined its overarching strategy regarding data aggregation and handling as well as artificial intelligence (AI). The move is aimed at leveraging the heft of EU’s vast, developed market in order to establish gold standards in these spheres that may then be replicated throughout the globe.

The European Commission (EC) said in a statement on Wednesday:

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“The European Union is and will remain the most open region for trade and investment in the world, but this is not unconditional. Everyone can access the European market as long as they accept and respect our rules.”

EU’s Digital Strategy

The President of the European Commission, Ursula von der Leyen, said:

“Today we are presenting our ambition to shape Europe's digital future. It covers everything from cybersecurity to critical infrastructures, digital education to skills, democracy to media. I want that digital Europe reflects the best of Europe – open, fair, diverse, democratic, and confident.”

The strategy envisions the establishment of a single market for data that spans the entire EU, thus, allowing data to move freely within EU’s jurisdiction. In order to achieve this, the EU will adopt a regulatory framework that creates incentives for data sharing and makes public sector data more accessible by opening up high-value datasets across the EU. The framework will also entail the creation of specific rules regarding data access and use that are designed to ensure compliance with existing EU stipulations such as personal data protection, consumer protection and competition rules.

The EC also pledged today to support high-impact projects related to European data spaces and cloud infrastructure that are trustworthy and energy efficient.

Legal Liability for Tech Companies

In a move that is bound to rattle social media platforms such as Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR), the EC is expected to overhaul rules around legal liability later this year.

Currently, there is substantial ambiguity as to who is precisely responsible for disinformation, hate speech, violent or illegal content on social media sites and platforms.

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In order to rectify this ambiguity, the EU will propose a Digital Services Act later this year to “strengthen the responsibility of online platforms and clarify rules for online services.”

Bear in mind that under the current EU rules, social media companies aren’t responsible for content posted by users on their platforms unless that content was illegal and had been flagged to them. If the EU, however, adopts a more aggressive policy that requires elimination of such content even if it was not flagged, these social media companies would be forced to continuously and proactively monitor and censor posts, thereby, resulting in huge cost escalations.

Of course, tech companies are monitoring these developments with apprehension. As an illustration, Facebook’s CEO Mark Zuckerberg met with senior EU officials in Brussels on Monday and publicly called for a new regulatory system – lying somewhere between one that applies to journalists, who can be sued for what they write, and telecommunications companies, which aren’t liable for customer conversations.

The European Industry Commissioner Thierry Breton, however, dismissed Zuckerberg’s demand, saying his comparison to telecom companies was “not relevant”. This dismissal suggests that the EU could lean toward much more onerous requirements vis-à-vis the legal liability for social media platforms.

EU’s AI Rules

The EC has segregated applications for AI into two categories. For the high-risk category – exemplified by facial recognition, health, policing, transport, etc. – the EU will require that AI systems deployed therein be transparent, traceable and guarantee human oversight. Moreover, authorities should be able to test and certify the data used by algorithms in the same manner that cosmetics, cars or toys are currently checked and examined. Moreover, the EC wishes to hold a debate as to whether, in contradiction with current EU rules, facial recognition applications may be deployed in certain cases for remote identification of people.

For the low-risk category, the Commission envisages a voluntary labelling scheme provided that such AI applications apply higher standards.

Do you think these policy changes will have a material impact on how we use social media platforms? Let us know your thoughts in the comment section below.

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