European companies processing personal data may be discouraged from using artificial intelligence technologies after GDPR comes into effect. A recent report by Center of Data Innovation, a US-based group, says GDPR provisions addressing AI in the context of protecting consumer interests may slow down AI research and innovation.
AI guidelines in Europe's comprehensive privacy law establish rights of data subjects which are not to be subjected to decisions based on automated processing. “By both indirectly limiting how the personal data of Europeans gets used and raising the legal risks for companies active in AI, the GDPR will negatively impact the development and use of AI by European companies,” said the report.
GDPR requires manual review of algorithmic decisions
Under Article 22 of the General Data Protection Regulation, companies would need to manually look at decisions made by algorithms which may prove to be a disincentive for deploying AI in the first place. In addition, article 13–15 of the GDPR create an obligation for companies to provide either detailed explanations of individual algorithmic decisions or general information about how the algorithms make decisions.
As an outcome, GDPR-compliance may give a competitive advantage to firms developing or using artificial intelligence technologies in other geographies over their European counterparts. “Because of these restrictions, firms in the EU developing or using AI will be at a competitive disadvantage compared with their competitors in North America and Asia,” the report states.
Striking a balance between privacy and innovation
There have been recommendations to strike a balance between consumer protection and innovation. Amending GDPR to eliminate the right to human review of algorithmic decisions may help innovation in artificial intelligence. "Balancing legitimate concerns around privacy and consumer protection with the need for an open, flexible data ecosystem that supports innovation and experimentation in AI," recommends Center for Strategic and International Studies, a Washington-based think tank in a recently-published paper.
The European Political Strategy Centre (EPSC) also stated recently in a paper that Europe’s stricter rules on data use could provide an upper hand to its competitors in the short term. “Europe’s practice of data minimisation and high data privacy standards can be seen as a disadvantage against the likes of China, where personal data flows more freely.”