How Artificial Intelligence Manufacturers Can Protect Themselves Against Future Negligence Claims

Innovative medical devices have changed the healthcare landscape and will continue making dramatic improvements in patient care. Nevertheless, the growth of such devices will inevitably lead to increased litigation over their alleged failures. All companies developing healthcare tech therefore need to consider measures to protect themselves against potential claims. (more…)

National AI Strategy: The UK Government Publishes Its Artificial Intelligence Strategy for the Next Decade

On 22 September 2021, the UK Government (the “Government”) published its Artificial Intelligence (“AI”) strategy. The paper outlines the Government’s plan to make Britain a “global superpower” in the AI arena, and sets out an agenda to build the most “pro-innovation regulatory environment in the world”. This post highlights some of the key elements from the UK AI strategy. Significantly, the UK’s proposed approach may diverge in some respects from the EU’s GDPR. For example, the UK strategy includes consideration of whether to drop Article 22’s restrictions on automated decision-making, and whether to maintain the UK’s current sectoral approach to AI regulation.  The UK will publish a White Paper on regulating AI in early 2022, which will provide a basis for further consultation and discussion with interested or affected groups before draft legislation is formally presented to the UK Parliament. (more…)

SEC Fines Alternative Data Provider for Securities Fraud

On September 14, 2021, the U.S. Securities and Exchange Commission (SEC) settled an enforcement action against App Annie Inc., an alternative data provider for the mobile app industry, and its former CEO Bertrand Schmitt. The SEC charged App Annie and Schmitt with securities fraud, under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, for engaging in deceptive practices and materially misrepresenting how App Annie derived its alternative data, thereby inducing trading firms to become subscribers to use App Annie’s data in their decisions to buy and sell securities.  (more…)

Federal Trade Commission Hosts Panels Related to Consumer Privacy and Data Security at PrivacyCon

This summer, the Federal Trade Commission (“FTC”) hosted its sixth annual PrivacyCon, an event focused on the latest research and trends related to consumer privacy and data security. This years’ event was divided into six panels: Algorithms; Privacy Considerations and Understandings; Adtech; Internet of Things; Privacy-Children and Teens; and, Privacy and the Pandemic. Welcoming attendees and kicking off the event, Commissioner Rebecca Kelly Slaughter called for minimization of data abuses and for a move away from the notice and consent model of privacy in favor of data minimization. PrivacyCon topics are selected by the FTC and often seen as an indication of enforcement priorities. (more…)

European Commission Publishes Details of its Forthcoming Data Act

The European Commission has formally launched its legislative initiative aimed at increasing access to and further use of data, so that more public and private actors can benefit from technologies such as Big Data and machine learning. The Commission has published its inception impact assessment on the forthcoming Data Act, on which interested stakeholders can submit comments until 25 June 2021. In parallel, the Commission has launched a public consultation for the legislative initiative, to be conducted by an online questionnaire, with a deadline of 3 September 2021. Feedback will be taken into account for further development and fine tuning of the initiative to be tabled in Q3-Q4 2021.

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Using Data De-Identification to Protect Companies

Many companies hope to benefit from amassing large amounts of data by mining it for market insights, creating internal business models, and supporting strategic, data-driven decisions. But as companies collect and store increasingly enormous volumes of data, they may unknowingly take on significant legal risks, including potential violations of data privacy laws and increased exposure to U.S. litigation discovery obligations. One way that businesses can mitigate these risks is to de-identify the data they collect and store.

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EU Commission Invites Stakeholders Feedback on Draft AI Regulation

On April 26, 2021, the European Commission announced that its draft proposal for the new EU Artificial Intelligence Regulation (“Draft AI Regulation”) is currently indicated to be open for feedback until July 15, 2021.* The Draft AI Regulation was published on April 21. Please refer to our blog post here that provides an overview of the Draft AI Regulation and its potential impact.

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EU Commission Issues Draft AI Regulation

On April 21, 2021, the European Commission (EC) issued its eagerly awaited draft proposal on the EU Artificial Intelligence Regulation (Draft AI Regulation) – the first formal legislative proposal regulating Artificial Intelligence (AI) on a standalone basis. The Draft AI Regulation is accompanied by a revision of the EU’s rules on machinery products, which lay down safety requirements for machinery products before being placed on the EU market. The new draft Machinery Products Regulation – proposed by the EU Commission on the same day – intends to tackle safety issues that arise in emerging technologies. The Draft AI Regulation (which appears to have borrowed a number of principles from existing EU legislation, including the EU General Data Protection Regulation 2016/679 (GDPR)) has an intentionally broad scope, and regulates the use of AI in accordance with the level of risk the AI system presents to fundamental human rights and other key values the EU adheres to. AI systems that are considered to present an “unacceptable” level of risk are banned from the EU, and “high-risk” systems are subject to strict requirements. AI systems which are considered to present a lower risk level are subject to transparency requirements or are not regulated at all. Companies engaged in the development, manufacturing, importation, distribution, servicing, and use of AI – irrespective of industry – should assess to what extent their products are implicated and how they will address any regulatory requirements they are subject to. The Draft AI Regulation foresees maximum administrative fines of up to €30m or 6% of total worldwide annual turnover in the event of non-compliance – meaning fines are higher than the ones under the GDPR.

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