Governments are scrambling to establish regulations to govern AI, citing numerous concerns over data privacy, bias, safety, and more.
AI News caught up with Nerijus Šveistys, Senior Legal Counsel at Oxylabs, to understand the state of play when it comes to AI regulation and its potential implications for industries, businesses, and innovation.
“The boom of the last few years appears to have sparked a push to establish regulatory frameworks for AI governance,” explains Šveistys.
“This is a natural development, as the rise of AI seems to pose issues in data privacy and protection, bias and discrimination, safety, intellectual property, and other legal areas, as well as ethics that need to be addressed.”
Regions diverge in regulatory strategy
The European Union’s AI Act has, unsurprisingly, positioned the region with a strict, centralised approach. The regulation, which came into force this year, is set to be fully effective by 2026.
Šveistys pointed out that the EU has acted relatively swiftly compared to other jurisdictions: “The main difference we can see is the comparative quickness with which the EU has released a uniform regulation to govern the use of all types of AI.”
Meanwhile, other regions have opted for more piecemeal approaches. China, for instance, has been implementing regulations specific to certain AI technologies in a phased-out manner. According to Šveistys, China began regulating AI models as early as 2021.
“In 2021, they introduced regulation on recommendation algorithms, which [had] increased their capabilities in digital advertising. It was followed by regulations on deep synthesis models or, in common terms, deepfakes and content generation in 2022,” he said.
“Then, in 2023, regulation on generative AI models was introduced as these models were making a splash in commercial usage.”
The US, in contrast, remains relatively uncoordinated in its approach. Federal-level regulations are yet to be enacted, with efforts mostly emerging at the state level.
“There are proposed regulations at the state level, such as the so-called California AI Act, but even if they come into power, it may still take some time before they do,” Šveistys noted.
This delay in implementing unified AI regulations in the US has raised questions about the extent to which business pushback may be contributing to the slow rollout. Šveistys said that while lobbyist pressure is a known factor, it’s not the only potential reason.
“There was pushback to the EU AI Act, too, which was nevertheless introduced. Thus, it is not clear whether the delay in the US is only due to lobbyism or other obstacles in the legislation enactment process,” explains Šveistys.
“It might also be because some still see AI as a futuristic concern, not fully appreciating the extent to which it is already a legal issue of today.”
Balancing innovation and safety
Differentiated regulatory approaches could affect the pace of innovation and business competitiveness across regions.
Europe’s regulatory framework, though more stringent, aims to ensure consumer protection and ethical adherence—something that less-regulated environments may lack.
“More rigid regulatory frameworks may impose compliance costs for businesses in the AI field and stifle competitiveness and innovation. On the other hand, they bring the benefits of protecting consumers and adhering to certain ethical norms,” comments Šveistys.
This trade-off is especially pronounced in AI-related sectors such as targeted advertising, where algorithmic bias is increasingly scrutinised.
AI governance often extends beyond laws that specifically target AI, incorporating related legal areas like those governing data collection and privacy. For example, the EU AI Act also regulates the use of AI in physical devices, such as elevators.
“Additionally, all businesses that collect data for advertisement are potentially affected as AI regulation can also cover algorithmic bias in targeted advertising,” emphasises Šveistys.
Impact on related industries
One industry that is deeply intertwined with AI developments is web scraping. Typically used for collecting publicly available data, web scraping is undergoing an AI-driven evolution.
“From data collection, validation, analysis, or overcoming anti-scraping measures, there is a lot of potential for AI to massively improve the efficiency, accuracy, and adaptability of web scraping operations,” said Šveistys.
However, as AI regulation and related laws tighten, web scraping companies will face greater scrutiny.
“AI regulations may also bring the spotlight on certain areas of law that were always very relevant to the web scraping industry, such as privacy or copyright laws,” Šveistys added.
“At the end of the day, scraping content protected by such laws without proper authorisation could always lead to legal issues, and now so can using AI this way.”
Copyright battles and legal precedents
The implications of AI regulation are also playing out on a broader legal stage, particularly in cases involving generative AI tools.
High-profile lawsuits have been launched against AI giants like OpenAI and its primary backer, Microsoft, by authors, artists, and musicians who claim their copyrighted materials were used to train AI systems without proper permission.
“These cases are pivotal in determining the legal boundaries of using copyrighted material for AI development and establishing legal precedents for protecting intellectual property in the digital age,” said Šveistys.
While these lawsuits could take years to resolve, their outcomes may fundamentally shape the future of AI development. So, what can businesses do now as the regulatory and legal landscape continues to evolve?
“Speaking about the specific cases of using copyrighted material for AI training, businesses should approach this the same way as any web-scraping activity – that is, evaluate the specific data they wish to collect with the help of a legal expert in the field,” recommends Šveistys.
“It is important to recognise that the AI legal landscape is very new and rapidly evolving, with not many precedents in place to refer to as of yet. Hence, continuous monitoring and adaptation of your AI usage are crucial.”
Just this week, the UK Government made headlines with its announcement of a consultation on the use of copyrighted material for training AI models. Under the proposals, tech firms could be permitted to use copyrighted material unless owners have specifically opted out.
Despite the diversity of approaches globally, the AI regulatory push marks a significant moment for technological governance. Whether through the EU’s comprehensive model, China’s step-by-step strategy, or narrower, state-level initiatives like in the US, businesses worldwide must navigate a complex, evolving framework.
The challenge ahead will be striking the right balance between fostering innovation and mitigating risks, ensuring that AI remains a force for good while avoiding potential harms.
(Photo by Nathan Bingle)
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