UK Sets Out It’s “Pro-Innovation” Approach To AI Regulation
On 29 March 2023, the UK’s Department for Science Innovation and Technology (“DSIT”) published its long awaited White Paper on its “pro-innovation approach to AI regulation” (the “White Paper”), along with a corresponding impact assessment. The White Paper builds on the “proportionate, light touch and forward-looking” approach to AI regulation set out in the policy paper published in July 2022. Importantly, the UK has decided to take a different approach to regulating AI compared to the EU, opting for a decentralised sector-specific approach, with no new legislation expected at this time. Instead, the UK will regulate AI primarily through sector-specific, principles based guidance and existing laws, with an emphasis on an agile and innovation-friendly approach. This is in significant contrast to the EU’s proposed AI Act which is a standalone piece of horizontal legislation regulating all AI systems, irrespective of industry.
EU Moving Closer to an AI Act – Key Areas of Impact for Life Sciences/MedTech Companies
The European Union is moving closer to adopting the first major legislation to horizontally regulate artificial intelligence. Today, the European Parliament (Parliament) reached a provisional agreement on its internal position on the draft Artificial Intelligence Regulation (AI Act). The text will be adopted by Parliament committees in the coming weeks and by the Parliament plenary in June. The plenary adoption will trigger the next legislative step of trilogue negotiations with the European Council to agree on a final text. Once adopted, according to the text, the AI Act will become applicable 24 months after its entry into force (or 36 months according to the Council’s position), which is currently expected in the second half of 2025, at the earliest.
New EU Cyber Law for the Financial Services Industry with Significant Impact on ICT Service Providers
The new EU Regulation on Digital Operational Resilience for the Financial Sector (DORA) recently entered into force. DORA establishes cybersecurity requirements for information and communication technology (ICT) systems supporting the business processes of financial entities and represents a paradigm shift for the ICT sector. Critical ICT third-party service providers, who are providing services to regulated financial entities, will also be directly regulated under DORA and subject to regulatory supervision by a regulator to be established under DORA (a so-called ‘Lead Overseer’).
U.S. Department of Commerce Seeks Input on AI Policy, Calls Trustworthy AI an Important Federal Objective
On April 13, 2023, the United States Department of Commerce National Telecommunication and Information Administration (“NTIA”) published a request for comment (“RFC”) seeking public input on Artificial Intelligence (“AI”) accountability. The RFC seeks to understand which measures—both self-regulatory and regulatory—have the capacity to ensure that AI systems are “legal, effective, ethical, safe, and otherwise trustworthy.” The RFC adopts a broad definition of “AI systems,” noting that they include all automated or algorithmic systems that generate predictions, recommendations, or decisions.
Washington State Enacts My Health My Data Act, Broadly Regulating Health-Related Data With a Private Right of Action
On April 27, 2023, Washington Gov. Jay Inslee, a Democrat, signed into law the state’s My Health My Data Act (the Act), which will become effective on March 31, 2024 (June 30, 2024, for small businesses). Despite its name, this is a comprehensive privacy bill that will affect many entities, including those outside of the traditional “health” context. The rights and obligations may apply to individuals other than Washington residents, as the law defines consumers as including persons whose data is merely collected or otherwise processed in the state.
Compliance Updates for Employer’s use of Automated Decisionmaking Tools: New York City Finalizes Rules on Automated Employment Decision Tools and Sets Enforcement Date for July 5, 2023, Upcoming California Regulations, and Federal Guidance
Employers in New York City may soon be subject to a new law, Local Law 144, that regulates employers’ use of automated employment decision tools (“AED tools” or “AEDT”) – software and other programs used to make decisions about who to hire, who to promote and other employment decisions. Local Law 144, the first of its kind law regulating these AED tools, was originally supposed to go into effect on January 1, 2023; however, because needed regulatory guidance had not been issued, the effective date was repeatedly pushed back and is now set for July 5, 2023. Final rules were released on April 6, 2023, so further delays are unlikely. We summarize below the key provisions of Local Law 144 and what employers need to know to prepare.
New U.S. FDA Draft Guidance Outlines Path To Faster Modification of AI/ML-Enabled Devices
The U.S. Food and Drug Administration (FDA or Agency) has issued new draft guidance on “Marketing Submission Recommendations for a Predetermined Change Control Plan for Artificial Intelligence/Machine Learning (AI/ML)-Enabled Device Software Functions”1 that discusses a “science-based approach to ensuring that AI/ML-enabled devices can be safely, effectively, and rapidly modified, updated, and improved in response to new data.”2 This approach should offer more certainty to industry as FDA’s stated goal is to allow AI/ML-enabled devices to be modified faster in accordance with FDA requirements while being “built to adapt to the data and needs of individual health care facilities” and “adapt to deliver treatments according to individual users’ particular characteristics and needs.”3 Those wishing to comment on the draft guidance should note that the comment period closes on July 3, 2023.
UK GDPR Reform Is Back! Department of Science, Innovation and Technology Introduces New Data Protection and Digital Information Bill
On 8 March 2023, the newly created Department of Science, Innovation and Technology (“DSIT”) introduced the Data Protection and Digital Information (No. 2) Bill. The “Bill” is in substance a re-introduction of the previous Data Protection and Digital Information Bill which was withdrawn from Parliament on the same day as the new Bill was published. The Bill, which has been hailed by the UK Government as one that will “save billions” and “cut down pointless paperwork” is the UK’s latest attempt to create a more streamlined piece of data protection legislation for the UK whilst still “ensur[ing] data adequacy.” The Information Commissioner’s Office (“ICO”) also welcomed the re-introduction of the Bill, with the Commissioner stating that he would “support [the Bill’s] ambition.” While much of the Bill remains the same as its previous iteration, we set out the key provisions and notable amendments below.
Biden Administration Announces National Cybersecurity Strategy
On March 1, 2023, the Biden administration announced its long-awaited National Cybersecurity Strategy. The strategy is part of the administration’s efforts to bolster and modernize public and private responses to cybersecurity threats.
UK’s New Pro-innovation Approach to Regulating Digital Technologies
On 15 March 2023, the UK Government published, alongside its Spring Budget, a report on the Pro-innovation Regulation of Technologies Review (the “Report”). The Report was led by the government’s Chief Scientific Advisor and National Technology Officer, Sir Patrick Vallance, who was tasked with “bringing together the best minds to advise how the UK can better regulate emerging technologies, enabling their rapid and safe introduction.” In response, the UK Government has accepted all of the Report’s recommendations, and set out some next steps for their implementation.