Industry Faces Compliance Hurdles After EU AI Act Passes

Lawmakers have passed the EU AI Act. Businesses must now ensure their AI applications comply with the rules.

The sweeping new rules impose sanctions on AI systems that could impact citizens’ rights, with the potential to ban some systems outright.

Companies caught foul of the rules face potential fines of up to 7% of their annual revenue.

Nitish Mittal, partner at Everest Group, said the regulation is likely to set a precedent for how other regions and governments might approach AI in the future.

AI systems are used around the world, with companies everywhere vying for potential integrations or tools to improve their workflows. As such, the EU rules will likely have an impact far beyond European borders.

Ashley Casovan, AI governance center managing director at IAPP said it is crucial for companies using AI in any capacity to understand the Act and to “start to prepare their organization and their teams for compliance.”

“Recognizing and building from globally adopted frameworks and related legislation, this comprehensive law will provide necessary guidance for companies who are buying, building and selling,” Casovan added.

Impact on web crawling

Among the areas the EU AI Act could impact are web crawling and search engine optimization. Ben Maling, managing associate at law firm EIP, called for a standardized method to opt web content out from scraping for Gen AI training.

Related:EU AI Act Would Scrutinize Many ‘General’ AI Models – SXSW 2024

“The newly approved EU AI Act requires that companies training Gen AI models for the EU market respect machine-readable opt-outs from text and data mining even if their servers are in the U.S., Timbuktu or wherever else. Sounds promising for the likes of New York Times, Getty Images and millions of other rightsholders who don't want their content hoovered up to train chatbots and image generators. But how can it be done, practically?

“Web crawlers and other robots typically use the standardized robots.txt file of a website to determine whether they are permitted to process its content. But simply denying all robots would have dramatic negative consequences on SEO and other things that matter - who doesn't want their site to be indexed by Google? On the other hand, denying crawlers on an individual basis is totally impracticable as the number of Gen AI providers grows.”

Impact on the U.K.

The EU AI Act could have an impact on rival jurisdictions like the U.K., according to Nikolaz Foucaud, EMEA managing director at Coursera.

“While there’s optimism that AI could be the driving force in the U.K.’s economic recovery, and we’ll see trickle-down impacts in Britain from the EU AI Act, there’s a pressing need for more to be done around retraining the workforce, at all levels.

Related:Lawmaker Behind EU AI Act: Businesses Will Benefit

“For many businesses, AI presents a golden opportunity, but its deployment is being held up due to skill shortages and a lack of strategic planning. Without the right technical expertise, organizations will struggle to implement AI initiatives effectively, which stalls development and any potential productivity gains that it has to offer.”