The EU wants to put companies on the hook for harmful AI

The new bill, called the AI ​​Liability Directive, will add teeth to the EU AI Act, which is due to become EU law around the same time. The AI ​​Act will require additional checks on the use of “high-risk” AI that can cause the most harm to people, including law enforcement, employment or healthcare systems.

The new liability law will give people and companies the right to sue for damages after being harmed by an AI system. The goal is to hold technology developers, manufacturers and users accountable and require them to explain how their AI systems were created and trained. Tech companies that do not comply with the rules risk EU-wide class action lawsuits.

For example, job seekers who can prove that the AI ​​system for resume screening discriminated against them can go to court to force the AI ​​company to give them access to information about the system so they can identify the culprits and figure out what went wrong. Armed with this information, they can sue.

The proposal still has to go through the EU legislative process, which will take at least a couple of years. It will be amended by members of the European Parliament and EU governments and is likely to face intense lobbying from technology companies that demand that such rules can have a “chilling” effect on innovation.

Whether it succeeds or not, the new EU legislation will have an impact on how AI is regulated around the world.

In particular, the bill could have a negative impact on software development, said Mathilde Adjutor, European policy manager for tech lobbying group CCIA, which represents companies like Google, Amazon and Uber.

Under the new rules, “developers risk not only being held liable for bugs in the software, but also for the software’s potential impact on users’ mental health,” she says.

Imogen Parker, deputy director of policy at the Ada Lovelace Institute, an AI research institute, says the bill would shift power from companies to consumers — a change she sees as especially important given AI’s potential for discrimination. And the bill ensures that when an AI system causes harm, there is a common way in the EU to get compensation, says Thomas Bue, head of European policy for the technology lobby BSA, of which Microsoft and IBM are members.

However, some consumer advocacy organizations and activists say the proposals don’t go far enough and would set the bar too high for consumers who want to make claims.

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