AI View - 12 December 2023

This special edition covers the EU AI Act.

• First, an invite to our webinar on Thursday ("EU AI Act: Deal agreed, but what next and how does it impact you?).
• Second, key points from Friday night's deal.

Webinar on EU AI Act (live and on-demand)

Date: Thursday 14 December 2023
Time: 8.30-9.30am GMT or 10-11am PST

On Friday 8 December, the EU achieved the significant milestone of reaching a political deal on the EU AI Act.

But what happens now and how does this impact organisations developing or using AI?

In this quick-fire webinar, we will explain:

• The deal that was reached, including the final points that were resolved.
• What the Act looks like now.
• What happens next and when the Act will actually apply.
• How this impacts organisations and what you should start doing now.

The webinar will be delivered by Minesh Tanna (Global AI Lead) and Christopher Götz (Head of Digital Business, Germany) at Simmons & Simmons.

Register here.

Key points from Friday night's EU AI Act deal

What happened on Friday night?

• As a recap, the European Commission first proposed the draft EU AI Act in April 2021. Since then, the European Council issued its proposed amendments in December 2022 and the European Parliament did the same in June 2023.

• The institutions then engaged in the "trilogue" process with Member States to agree the final Act. Spain, which holds the Council Presidency, was keen to strike a deal before the end of its tenure in December.

• After intense 3-day negotiations on a number of points, a political deal was reached on the EU AI Act.

Is the text of the EU AI Act agreed? What happens next?

• The text isn't yet finalised or agreed. The text will be worked on in 'technical meetings' during December and January.

• The text will then need to be agreed. This should be a formality given that the political deal has been agreed, but this is not guaranteed. There may be wrangling over the way certain points are reflected in the drafting.

• It is hoped that the Act will then be formally approved by the European Parliament and Council in Q1 next year (although this may slip to Q2).

• The EU AI Act will then enter into force 20 days after publication in the Official Journal.

When will the EU AI Act start to apply?

The majority of provisions will apply after two years following entry into force of the EU AI Act.

However:

• Some provisions will apply earlier (e.g. 6 months for prohibited AI and 12 months for general purpose AI).
• A voluntarily pact may gain traction, encouraging organisations to comply of their own volution before the Act comes into force.

What was agreed on Friday night?

A consensus was reached on various critical outstanding items, including:

• The scope of prohibited AI, including a compromise on the use of real-time biometric identification in law enforcement (on which there were divergent views).
• Whether and how to regulate general purpose AI, including foundation models. France, Germany and Italy favoured non-regulation of foundation models, but a compromise of limited, tiered regulation was reached.
• The scope of high-risk AI systems, which are likely to include AI used in certain insurance and banking contexts.
• The definition of "AI System", which follows the OECD definition and is narrower than in the original Commission draft.
• An exemption for AI used for R&D and only limited regulation of open-source AI.
• Sanctions, with fines up to EUR 35 million or 7% of global turnover.
• Right of consumers to launch complaints and receive meaningful explanations

Has the EU AI Act changed much from the draft texts?

• Not much. It remains a broad, horizontal, binding regulation, which follows the approach of EU product safety regulation.

• The key features of the EU AI Act also remain the same: it follows a risk-based approach to the regulation of AI; it is extra-territorial; and the key burden is on providers of AI.

• As well as regulating AI based on use, the Act also now regulates "general purpose AI" (albeit which may not have a significant impact on many organisations - this will depend on what the final text says).

Where can I find out more information?

We will provide more information during our webinar and in further comms.

Here are some links which may be of interest in the meantime:

Press releases:

• Press Conference recording (immediately following the deal)
• European Commission press release
• European Council Press Release
• European Parliament Press Release

Drafts of the EU AI Act:

• Commission original draft (14 April 2021)
• Council's General Approach (6 December 2022)
• European Parliament draft (14 June 2023)