Compliance Obligations For Providers & Deployers Of AI Solutions

Compliance obligations for providers and deployers of AI solutions refer to the legal and ethical responsibilities that these entities have to adhere to when developing, offering, and implementing artificial intelligence (AI) technologies. As AI becomes more prevalent in various industries and applications, there is an increasing need for regulations and guidelines to ensure that AI systems are developed and used responsibly and ethically.

As the AI field evolves rapidly, compliance obligations for providers and deployers are likely to evolve as well. It is essential for these entities to stay up-to-date with the latest regulations and best practices to ensure responsible and ethical AI development and deployment.

Let’s start by defining what Is “Artificial Intelligence”?

Under the European Union Artificial Intelligence Act an ‘‘artificial intelligence system” (AI system) means a machine-based system that is designed to operate with varying levels of autonomy and that can, for explicit or implicit objectives, generate outputs such as predictions, recommendations, or decisions, that influence physical or virtual environments.

The EU AI Act is a proposed piece of Regulation that will likely apply to:

– providers placing on the market or putting into service AI systems in the EU, irrespective of whether they are established within the EU or a third party

– users of AI systems located within the EU

– providers and users of AI systems that are located in a third country, where the output produced by the system is used in the EU

Classification of Artificial Inteligence systems

The EU Regulator is taking a risk-based approach to AI systems, classifying them into the following categories:

1. unacceptable risk

2. high risk

3. limited risk

4. low risk

Risk levels of providers and deployers of AI systems

Depending on the level of risk, providers and deployers of AI systems shall have compliance obligations, including:

– the implementation of risk management systems,

– data & data governance,

– drawing up of technical documentation,

– record-keeping,

– transparency & provision of information to users,

– human oversight

– accuracy, robustness & cybersecurity

Infringements of compliance obligations are envisaged to be subject to administrative fines of up to 30mio EUR or, if the offender is a company, up to 6% of its total worldwide annual turnover for the preceding financial year, whichever is higher.

Struggling with developing your AI product in compliance with International and European rules & regulations? Book A FREE Legal Strategy Session to get you started.

Compliance obligations for providers and deployers of AI solutions

  1. Data Privacy and Security: Providers and deployers of AI solutions must ensure that they handle data responsibly and protect users’ privacy. This involves complying with data protection laws, implementing security measures to safeguard data, and obtaining appropriate consent for data collection and processing.
  2. Bias and Fairness: AI systems should be designed to avoid bias and discrimination based on attributes like race, gender, or ethnicity. Providers and deployers must ensure that their AI algorithms are fair and transparent and regularly monitor and audit the systems for potential bias.
  3. Transparency and Explainability: There is a growing demand for AI systems to be transparent and explainable, especially in critical applications like healthcare or finance. Providers and deployers should be able to explain how their AI systems make decisions and provide users with understandable explanations.
  4. Compliance with Industry Standards: AI providers and deployers should follow relevant industry standards and best practices. This may include adhering to specific technical standards or ethical guidelines issued by recognized organizations in the AI field.
  5. Legal Compliance: Providers and deployers of AI solutions must comply with relevant laws and regulations, including those related to intellectual property, consumer protection, and competition.
  6. Monitoring and Compliance Reporting: Implementing AI solutions may require continuous monitoring to ensure they function as intended and comply with legal and ethical requirements. Additionally, providers and deployers may need to report on their compliance efforts and the performance of their AI systems.
  7. Accountability: Providers and deployers should take responsibility for the impact of their AI systems on users, customers, and society as a whole. They must be accountable for any potential negative consequences and be ready to address them promptly.

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