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Europe takes lead with first AI regulations amid rapid industry growth

Europe moved closer to adopting the world’s first artificial intelligence rules on Wednesday as EU lawmakers endorsed a provisional agreement for a technology whose use is rapidly growing across a wide swathe of industries and in everyday life.

Three years in the making, the AI Act comes as generative AI systems such as Microsoft-backed OpenAI’s ChatGPT, and Google’s chatbot Gemini become more popular, fuelling concerns about misinformation and fake news.

The legislation will regulate high-impact, general-purpose AI models and high-risk AI systems which will have to comply with specific transparency obligations and EU copyright laws.

It restricts governments’ use of real-time biometric surveillance in public spaces to cases of certain crimes, prevention of genuine threats, such as terrorist attacks, and searches for people suspected of the most serious crimes.

“I welcome the overwhelming support from the European Parliament for the EU AI Act, the world’s first comprehensive, binding framework for trustworthy AI. Europe is now a global standard-setter in trustworthy AI,” EU industry chief Thierry Breton said.

A total of 523 EU lawmakers voted in favour of the deal while 46 were against and 49 abstained.

EU countries are set to give their formal nod to the deal in May, with the legislation expected to enter into force early next year and apply in 2026 although some of the provisions will kick in earlier.

Brussels may have set the benchmark for the rest of the world, said Patrick Van Eecke, a partner at law firm Cooley.

“The European Union now has the world’s first hard coded AI law. Other countries and regions are likely to use the AI Act as a blueprint, just as they did with the GDPR,” he said, referring to the EU privacy regulation.

The European Parliament and EU countries had clinched a preliminary deal in December after nearly 40 hours of negotiations.
Companies risk fines ranging from 7.5 million euros or 1.5% of turnover to 35 million euros or 7% of global turnover depending on the type of violations.

Lobbying group BusinessEurope expressed concerns about how the rules would be implemented.

“The need for extensive secondary legislation and guidelines raises significant questions about legal certainty and the law’s interpretation in practice, which are crucial for investment decisions,” its director general Markus J. Beyrer said.

A spokesperson for Amazon, which has begun rolling out a new AI assistant, welcomed the vote: “We are committed to collaborating with the EU and industry to support the safe, secure, and responsible development of AI technology.”

Meta Platforms warned against any measures that could stifle innovation.

“It is critical we don’t lose sight of AI’s huge potential to foster European innovation and enable competition, and openness is key here,” said Marco Pancini, Meta’s head of EU affairs. Reuters

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