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US Inaction on AI Outsources Tech Regulation to EU

Updated: Jul 20, 2023


Didier Reynders, European Commissioner for Justice. Credit: Anders Lowdin
Didier Reynders, European Commissioner for Justice. Credit: Anders Lowdin

BRUSSELS – The dominance of the world's most valuable and influential internet companies based in the United States has led to outsourcing tech regulation to the European Union, asserts Didier Reynders, the European Commissioner for Justice. With the power to craft and enforce laws across the 27-nation bloc, Reynders emphasizes the need for the US to step up its regulatory efforts.


Costs of US Tech Regulation Inaction


Five years have passed since the implementation of the EU's stringent privacy law, the General Data Protection Regulation (GDPR), which granted Europeans new rights to protect and control their data. While various tech regulation proposals have been put forward by tech executives, whistleblowers, and officials in the US, Reynders highlights the lack of real follow-up.


He acknowledges the efforts made by the US Federal Trade Commission (FTC) in reaching settlements with tech companies but suggests that they lack the necessary bite to enforce compliance effectively. Reynders emphasizes the importance of enforcement in discussions with US authorities to ensure the protection of user data.


Concerns Regarding AI Regulation and ChatGPT


Reynders expresses concerns about the unchecked development and deployment of artificial intelligence (AI) systems, including OpenAI's ChatGPT. He reveals that an investigation into ChatGPT's compliance with GDPR is underway, with the results expected by October. Furthermore, an EU-wide data protection task force is set to establish common principles for dealing with ChatGPT, potentially leading to further adjustments in its data collection and retention policies.


While Sam Altman, CEO of OpenAI, supports the need for new AI regulations, he has also expressed apprehension about excessive regulation. Reynders assures that all major stakeholders are included in the discussions, intending to address concerns and establish suitable tech regulation.


The Need for Transatlantic Cooperation on Data Transfers


During Reynders' visit to the US, EU and US officials finalized an agreement facilitating the storage of EU citizens' data on US servers. This third agreement aims to ensure adequate data protection and allows companies the option to store data locally or transfer it if necessary. Previous agreements were rejected due to concerns over US authorities' access to the data.


Reynders mentions the challenge brought by privacy activist Max Schrems, emphasizing that some groups have built a business model around taking cases to the EU Court of Justice. The new data transfer agreement enables Europeans to file complaints about data intrusions with local authorities, leading to potential resolutions through a new data protection court in the US.

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