EU proposes strict AI rules, with fines up to 6% for violations

(Reuters) — The European Commission on Wednesday announced tough draft rules on the use of artificial intelligence, including a ban on most surveillance, as part of an attempt to set global standards for a technology seen as crucial to future economic growth.

The rules, which envisage hefty fines for violations and set strict safeguards for high-risk applications, could help the EU take the lead in regulating AI, which critics say has harmful social effects and can be exploited by repressive governments.

The move comes as China moves ahead in the AI race, while the COVID-19 pandemic has underlined the importance of algorithms and internet-connected gadgets in daily life.

“On artificial intelligence, trust is a must, not a nice to have. With these landmark rules, the EU is spearheading the development of new global norms to make sure AI can be trusted,” European tech chief Margrethe Vestager said in a statement.

The Commission said AI applications that allow governments to do social scoring or exploit children will be banned.

High risk AI applications used in recruitment, critical infrastructure, credit scoring, migration and law enforcement will be subject to strict safeguards.

Companies breaching the rules face fines up to 6% of their global turnover or 30 million euros ($36 million), whichever is the higher figure.

European industrial chief Thierry Breton said the rules would help the 27-nation European Union reap the benefits of the technology across the board.

“This offers immense potential in areas as diverse as health, transport, energy, agriculture, tourism or cyber security,” he said.

However, civil and digital rights activists want a blanket ban on biometric mass surveillance tools such as facial recognition systems, due to concerns about risks to privacy and fundamental rights and the possible abuse of AI by authoritarian regimes.

The Commission will have to thrash out the details with EU national governments and the European Parliament before the rules can come into force, in a process that can take more than year.

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