On 9th December 2023, the European Union announced the agreement reached between the Council and the Parliament regarding the regulations on artificial intelligence aimed at being able to respond to the need for harmonised rules in said area so that it may be used in a secure manner, respecting the fundamental rights of citizens and the values of the EU, and at the same time facilitating investment and innovation.
The agreement, which has its origin in the Commission’s proposal regulation drafted in 2021, is of a provisional nature, as diverse phases for defining the technical and formal aspects of the regulation are still required. Once approved by the Parliament and the Council, it will start to apply two years after entering into force, therefore it is expected to be effective from the year 2026.
Diverse criteria for differentiating artificial intelligence from other systems of traditional software are introduced, as well as giving a clear definition to artificial intelligence, which is “a system conceived for operating with elements of autonomy which, based upon data and information generated by machines or human beings, infers how to achieve a series of objectives, using for this purpose automatic learning strategies based upon logic and knowledge and which produces system-generated output information….”.
Criteria for prohibiting diverse practices which may violate fundamental rights are established. These practices include
- the introduction of a system which may substantially alter the behaviour of persons, and cause physical or psychological damage,
- the use of a system which may be able to take advantage of the vulnerabilities of specific groups of people,
- the classification of persons in accordance with their social behaviour or personal characteristics provoking damaging or unfavourable treatment towards certain persons or groups,
- the use in public spaces of biometric identification systems in real time except in assessed situations, and,
- the analysis and recognition of the emotions of persons in the work environment and in education institutions.
With regard to situations in which the use of real-time remote biometric identification systems is allowed in public spaces, it is established that “it will be conditioned to the granting of a prior authorisation by a judicial authority or by an administrative authority which is independent from the member state where said system is to be used, which shall grant it upon a justified request and in accordance with the detailed rules of domestic law […] Nevertheless, in a situation of duly justified urgency use of the system commence without authorisation, provided that such authorisation is requested without undue delay while the AI system is in use and that, if authorisation is refused, use of the system ceases immediately.”
Conditions regarding penalties are also provided for, which should be “effective, proportionate and dissuasive”, and they should take into account the size of the company and its financial viability. The member states must determine the penalty system and they will guarantee the effective application thereof, and must therefore communicate the established system and measures to the Commission. The non-fulfilment of the regulations will carry penalties of up to 35 million Euros, depending upon the size and turnover of the offending companies, with a limit of up to 6% of their turnover, this being 3% for SMEs and emerging companies. Natural persons or legal entities may file complaints before the authorities which oversee the fulfilment of the regulation.
As for support for innovation, controlled spaces for AI tests are introduced, which allow investigators to develop and test their systems in a space which recreates real conditions. It also introduces diverse grants for smaller companies and newly-created companies, restricting the administrative responsibility to which they must be subjected.
Given that the European Union is a worldwide pioneer regarding the introduction of regulations to control this technology, the reaction of companies and investors will prove interesting, as it is they who will decide whether to enter or remain in the European market, or instead approach other markets where the lack of regulation will allow a greater leeway for development.
Oscar Vilá
Vilá Abogados
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22nd December 2023
