The European Union has passed the Artificial Intelligence Act, becoming the first global entity to pass comprehensive law to regulate AI’s development and use. Member states agreed on the framework in December 2023, and it was adopted Wednesday by the European Parliament with 523 votes in favor, 46 against and 49 abstentions. The legislation establishes what are being called “sweeping rules” for those building AI as well as those who deploy it. The rules, which will take effect gradually, implement new risk assessments, ban AI uses deemed “high risk,” and mandate transparency requirements.

In development since 2021, the act establishes the “right of consumers to launch complaints and receive meaningful explanations,” the Parliament explains in a press release.

“We finally have the world’s first binding law on artificial intelligence, to reduce risks, create opportunities, combat discrimination, and bring transparency,” said Italy’s Brando Benifei, member of the Committee on Internal Market and Consumer Protection (IMCO). “Thanks to Parliament, unacceptable AI practices will be banned in Europe and the rights of workers and citizens will be protected.”

Conceding that “much work lies ahead,” Romania’s Dragos Tudorache, another IMCO rapporteur, said “AI will push us to rethink the social contract at the heart of our democracies, our education models.”

The new law applies to AI products used in the EU, regardless of where its cloud servers reside, or the country in which the technology was developed. Fines of up to 7 percent of global corporate revenue may be levied against transgressors.

The Wall Street Journal reports the legislation is “expected to have a global impact because large AI companies are unlikely to want to forgo access to the bloc, which has a population of about 448 million.”

It could also have “a ripple effect” if other jurisdictions opt to use the AI Act as a model for their own regulations. “Europe is now a global standard-setter in AI,” IMC Commissioner Thierry Breton posted on X (formerly Twitter).

CNN notes the EU was successful in “leapfrogging” the United States, where legislation has yet to take hold, although President Biden issued an Internal Market executive order designed to contain risk. Meanwhile, China drafted AI rules related to censorship.

CNBC writes that “the regulation is expected to enter into force at the end of the legislature in May, after passing final checks and receiving endorsement from the European Council,” with implementation “staggered from 2025 onward.” The European Council consists of the heads of state of the 27 member states that comprise the union.

WSJ says their approval “is expected to be a formality since they already gave the legislation their political endorsement.”

Related:
U.S. Pushes for Global AI Regulations at UN, Bloomberg, 3/14/24