How California and the European Union Work Together to Regulate Artificial Intelligence

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By Khari Johnson, CalMatters

While the federal government seems content to sit back and wait, more than 40 US states are considering hundreds of AI regulation bills.

California, with its status as a tech-forward state and large economy, has an opportunity to lead the way. So much so, in fact, that the European Union is trying to coordinate with the state on AI rules. The EU opened an office in San Francisco in 2022 and dispatched a tech envoy, Gerard de Graaf, to better communicate laws and regulations around AI.

We're living through what de Graaf calls “the year of AI.” De Graaf and Joanna Smolenska, deputy head of the EU office in San Francisco, told CalMatters that if California lawmakers pass AI regulation in the coming months, the state could become a standard bearer for AI regulation in the United States. can emerge. In other words: California laws could affect the future of AI as we know it.

Last month, DeGraaf traveled to Sacramento to speak to several state lawmakers key to AI regulation:

The meeting to discuss the bills was at least the sixth visit to Sacramento by de Graaf or other EU officials in two months. EU officials who helped write the AI ​​Act and EU Commission Vice President Josep Fonteles also made trips to Sacramento and Silicon Valley in recent weeks.

This week, EU leaders ended a years-long process with the approval of the AI ​​Act, which regulates the use of artificial intelligence in 27 countries. It bans emotion recognition in schools and the workplace, social credit scores such as those used in China to reward or punish certain types of behavior and bans some examples of predictive policing. . The AI ​​Act applies high-risk labels to AI in healthcare, hiring and issuing government benefits.

There are some notable differences between EU law and California law. The AI ​​Act specifies how law enforcement agencies can use AI, while Bauer-Kahan's bill does not, and Wicks' watermarking bill may be stronger than the AI ​​Act's requirements. But both the California bill and the AI ​​Act take a risk-based approach to regulation, both recommending continuous testing and evaluation of forms of AI considered high risk, and both requiring watermarking of generative AI outputs. demand.

“If you take those three bills together, you're probably at 70-80% of what we cover in the AI ​​Act,” DeGraaf said. “It's a very strong relationship that benefits both of us.”

At the meeting, de Graaff said he reviewed draft AI bills, AI bias and risk assessment, advanced AI models, the state of watermarking images and videos created by AI, and which issues to prioritize. The San Francisco office works under the authority of the EU Delegation in Washington DC to promote EU tech policy and strengthen cooperation with influential tech and policy figures in the US.

Artificial intelligence can make predictions about people, including what movies they want to watch on Netflix or the next words in a sentence, but without high quality and constant testing, important information about people's lives. Decision-making AI can automate discrimination. AI has a history of harming people of color, such as police using facial recognition to decide whether to apply for an apartment or a home mortgage. Technology has been shown to have a negative impact on the lives of most people, including women, people with disabilities, the young, the elderly and those applying for government benefits.

In a recent interview with KQED, Umberg spoke about the importance of striking a balance, insisting that “we can get it wrong.” Too little regulation could have disastrous consequences for society, and too much could “strangle the AI ​​industry” that calls California home.

Democratic state Sen. Tom Umberg speaks on Thursday, March 31, 2022 in Sacramento, California.AP Photo/Rich Pedronci

The coordination between California and EU authorities seeks to unify regulatory initiatives in two uniquely influential markets.

The majority of top AI companies are based in California, and over the past eight months, San Francisco Bay Area companies have raised more AI investment money than the rest of the world combined, according to startup tracker Crunchbase.

The General Data Protection Regulation, known as the GDPR, is the European Union's best-known piece of legislation to protect privacy. This has also led to the term “Brussels effect”, when the enactment of one law leads to greater influence in other countries. In this case, EU law forced tech companies to adopt stricter consumer protections if they wanted access to the region's 450 million inhabitants. The law went into effect in 2018, the same year California passed a similar law. More than a dozen US states followed suit.

Definition of AI

Coordination is important, De Graaff said, because technology is a global industry and policies that make it difficult for businesses to comply with laws around the world must be avoided.

One of the first steps in working together is a common definition of how to define artificial intelligence so that you agree on what technology is covered under the law. De Graaf said his office worked with Bauer-Kahan and Umberg on how to define AI “because if you have very different definitions to begin with, then convergence or harmonization is almost impossible. “

Given the recent passage of the AI ​​Act, the absence of federal action, and the complexity of regulating AI, Senate Judiciary staff attorneys have held numerous meetings with EU officials and staff, Amber told CalMatters in a statement. . The definition of AI used by California's Senate Judiciary Committee is shared by a number of voices, including federal agencies, the Organization for Economic Co-operation and Development, and the EU.

“I strongly believe that we can learn from each other's work and manage AI responsibly without harming innovation in this dynamic and rapidly changing environment,” Umberg told CalMatters in a written statement. .

A trio of bills discussed with DeGraaf in April passed their respective chambers this week. He suspects California lawmakers' questions will become more specific as the bills get closer to passage.

California lawmakers proposed more than 100 bills to regulate AI in the current legislative session.

“I think what's important now for the Legislature is to reduce the bills to a more manageable number,” he said. “I mean, there are more than 50 so we focused specifically on the bill for those assembly members or senators.”

The state agency also seeks to protect the privacy of Californians.

Elected officials and their staff are not the only ones who speak to EU officials. The California Privacy Protection Agency — a state agency created to protect people's privacy and require businesses to comply with data deletion requests — also regularly talks with EU officials, including de Graaf.

Most states with privacy protection laws rely on state attorneys general for enforcement. Ashkan Solanti, the agency's executive director, said California is the only state with enforcement authority to audit businesses, impose fines or take businesses to court, because of EU privacy protections. Key elements of the law influenced the creation of California's privacy law. De Graaf and Soltani testified at an Assembly Privacy Committee hearing in February about the similarities in definitions of AI in California and the EU.

“The agency's roots were heavily influenced by the General Data Protection Regulation (GDPR),” Soltani said. “There is an interest and a purpose, and indeed, our law directs us to, where possible, ensure that our approach is consistent with frameworks in other jurisdictions, not only in states but also internationally. be.”

Sultani was hired when the agency was formed in 2021. International coordination is a big part of that work, he told CalMatters. After hiring staff and lawyers, one of their first orders of business was to join the Global Privacy Assembly, a group of 140 data privacy authorities from around the world. California is the only US state that is a member of this group.

Alignment is critical for businesses to set the rules of the road, but also for consumers to protect themselves and their communities in a digital world where borders are blurred.

“They don't think they're doing business with a California company or a European company or an Asian company, especially if it's all in English, they just think they're communicating online. have been, so having a consistent framework for protection ultimately benefits consumers,” said Sultani.

Like California lawmakers, the California Privacy Protection Agency is in the process of writing rules for how businesses use AI and protections for consumers, students and workers. And like the AI ​​Act, the draft rules call for an impact assessment. Its five-member board will consider signing the rules into law in July.

The last day of the legislative calendar year for California lawmakers is August 31.

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