International

Explained: EU Signs World’s First-Ever AI Rules Deal

The AI Act, scheduled to take effect in 2026, will serve as a model for other countries worldwide that have yet to establish legislation for the growing AI industry.

BRUSSELS, BELGIUM - DECEMBER 3:Thierry Breton (L) and Bostjan Koritnik(R)
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European Union negotiators signed a first-of-its-kind agreement on Friday, outlining a set of rules for the use of artificial intelligence. This significant milestone came after 38 hours of negotiations over three days.

The AI Act, scheduled to take effect in 2026, will serve as a model for other countries worldwide that have yet to establish legislation for the growing AI industry.

What is the AI Act?

Days after EU countries and lawmakers provisionally agreed on AI rules, experts from both sides will meet in 11 technical meetings starting Tuesday to finalise details.

“This regulation aims to ensure that fundamental rights, democracy, the rule of law and environmental sustainability are protected from high-risk AI while boosting innovation and making Europe a leader in the field,” the European Parliament media statement read.

The AI Act will adopt a "risk-based approach" when it comes to products or services using artificial intelligence. The focus would be more on how the technology is used rather than the technology itself.

Under the AI Act, the 27-nation bloc will look to ban untargeted scraping of facial images from the internet or CCTV footage to create facial recognition databases, emotion recognition in the workplace and educational institutions and social scoring based on social behaviour or personal characteristics.

Biometric systems will also be subject to ban with some exceptions in cases of law enforcement. 

Violations could draw fines of up to 35 million euros ($38 million) or 7 per cent of a company’s global revenue.

European Commissioner Thiery Bretton took to X in the late night hours of Friday announcing the historic “deal!”, that had been signed by the EU members.

He added it was "much more than a rulebook - it's a launch pad for EU start-ups and researchers to lead the global AI race", BBC reported.

Lead Member of the European Parliament (MEP) Brando Benifei said, “It was long and intense, but the effort was worth it. Thanks to the European Parliament’s resilience, the world’s first horizontal legislation on artificial intelligence will keep the European promise - ensuring that rights and freedoms are at the centre of the development of this ground-breaking technology.”

Another MEP Dragos Tudorache said, “The European Union has made impressive contributions to the world; the AI Act is another one that will significantly impact our digital future.”

The AI Act won't come into effect until two years after it gets final approval from European lawmakers, which is anticipated in a straightforward vote in early 2024. 

Under the act, customers would be able to file complaints, and fines may be applied for any breaches. If a company breaks the rules, they could face fines of up to 35 million euros ($38 million) or 7 per cent of their worldwide revenue.

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