Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Friday, April 16, 2021

AI Regulation in the European Union and Trade Law: How Can Accountability of AI and a High Level of Consumer Protection Prevail over a Trade Discipline on Source Code?

AI Regulation in the European Union and Trade Law: How Can Accountability of AI and a High Level of Consumer Protection Prevail over a Trade Discipline on Source Code?

Kristina Irion

University of Amsterdam

Abstract

Artificial Intelligence (AI) applications can bring many benefits for consumers, as well as influence consumer behaviour and the choices they make. On a large scale AI can profoundly transform consumer markets by, for example, enabling fully personalised consumer transactions on a population-wide scale. AI-powered consumer services rapidly diffuse across the global digital ecosystem thereby connecting consumers in the European Union (EU) to business operating from outside the EU. Individuals who are at the receiving end of AI systems must be reassured that these technologies operate in a way that respects fundamental and consumer rights.

In the current negotiations on electronic commerce at the World Trade Organisation (WTO), the EU supports the introduction – in the legal text – of a clause which prohibits the participating countries to introduce – in their national laws – measures that require access to, or transfer of, the source code of software, with some exceptions. This is a cause for concern for experts and rights advocates, as such a clause – if not carefully conditioned – can prevent future EU regulation of AI that may be harmful to consumers.

The Federation of German Consumer Organisations (Verbraucherzentrale Bundesverband – vzbv) has commissioned this study from the Institute for Information Law (IViR) at the University of Amsterdam, in order to shed light on the cross-border supply of AI technology and its impact on EU consumer rights.

This study forms a comprehensive understanding of this issue that intersects three different areas: (1) emerging EU governance of AI and (2) the application of EU consumer protection law to AI with (3) the EU’s position in the WTO electronic commerce negotiations. This study concludes that the source code clause within trade law indeed restricts the EU’s right to regulate in the field of AI governance in several important ways.

https://lawprofessors.typepad.com/antitrustprof_blog/2021/04/ai-regulation-in-the-european-union-and-trade-law-how-can-accountability-of-ai-and-a-high-level-of-c.html

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