Artificial intelligence act: Council and Parliament strike a deal on the first rules for AI in the world (9 December 2023)

The Council presidency and the European Parliament’s negotiators have reached a provisional agreement (9 December 2023) on the proposal on harmonised rules on artificial intelligence (AI), the so-called artificial intelligence act.

he draft regulation aims to ensure that AI systems placed on the European market and used in the EU are safe and respect fundamental rights and EU values. This landmark proposal also aims to stimulate investment and innovation on AI in Europe.

The AI act is a flagship legislative initiative with the potential to foster the development and uptake of safe and trustworthy AI across the EU’s single market by both private and public actors. The main idea is to regulate AI based on the latter’s capacity to cause harm to society following a ‘risk-based’ approach: the higher the risk, the stricter the rules.

As the first legislative proposal of its kind in the world, it can set a global standard for AI regulation in other jurisdictions, just as the GDPR has done, thus promoting the European approach to tech regulation in the world stage.

The main elements of the provisional agreement

Compared to the initial Commission proposal, the main new elements of the provisional agreement can be summarised as follows:

rules on high-impact general-purpose AI models that can cause systemic risk in the future, as well as on high-risk AI systems

a revised system of governance with some enforcement powers at EU level

extension of the list of prohibitions but with the possibility to use remote biometric identification by law enforcement authorities in public spaces, subject to safeguards

better protection of rights through the obligation for deployers of high-risk AI systems to conduct a fundamental rights impact assessment prior to putting an AI system into use.

Penalties

The fines for violations of the AI act were set as a percentage of the offending company’s global annual turnover in the previous financial year or a predetermined amount, whichever is higher. This would be €35 million or 7% for violations of the banned AI applications, €15 million or 3% for violations of the AI act’s obligations and €7,5 million or 1,5% for the supply of incorrect information. However, the provisional agreement provides for more proportionate caps on administrative fines for SMEs and start-ups in case of infringements of the provisions of the AI act.

The compromise agreement also makes clear that a natural or legal person may make a complaint to the relevant market surveillance authority concerning non-compliance with the AI act and may expect that such a complaint will be handled in line with the dedicated procedures of that authority.

Next steps

Following provisional agreement (9 December 2023), work will continue at technical level in the coming weeks to finalise the details of the new regulation. The presidency will submit the compromise text to the member states’ representatives (Coreper) for endorsement once this work has been concluded.

The entire text will need to be confirmed by both institutions and undergo legal-linguistic revision before formal adoption by the co-legislators.