The EU AI Act as global artificial intelligence regulation
Date: 23 August 2023
Sean Much, Co-CEO/CFO, AI & Partners, Sean has an extensive background in the
entertainment industry (e.g. film and art), and has a specialism in design. Alongside this,
Sean has more than a decade of experience in the professional services sector, including
holding the position of a tech accountant for 5 years. Sean knows about auditing and has
helped with an IPO on the New York stock exchange. As well as being a compliance expert,
he has deep expertise in implementation aspects of audit & assurance engagements, and
has been working with the largest global tech MNEs over the past 5 years.
Michael Charles Borrelli, Co-CEO/COO, AI & Partners, Michael Charles Borrelli is a
highly experienced financial services professional with over 10 years of experience. He has
held executive positions in compliance, regulation, management consulting and operations
for institutional financial services firms, consulted for FCA-regulated firms on strategic
planning, regulatory compliance and operational efficiency. In 2020, Michael set-up the
operations model and infrastructure for a crypto-asset exchange provider, and has been
actively engaged in the Web 3.0 and AI communities over the last 4 years. He currently
advises a host of AI, Web3, DLT and FinTech companies.
Charles Kerrigan, Partner, CMS UK, Charles Kerrigan is a specialist in emerging
technologies including crypto, digital assets, Web3 and AI. He works on corporate finance
and venture capital transactions in crypto, tokenisation, NFTs, Web3 and DeFi. He works on
consulting projects on blockchain and AI for public bodies, policymakers, standards
institutions, and corporations.
The Blockchain Industry in the UK Landscape Overview names Charles as a “leading
influencer in blockchain”. He is part of teams working on investing and setting standards for
emtech in the UK, Europe and the US. At CMS he is a Partner in a team that covers
emtech. He has roles on the advisory boards of AI and crypto firms and of trade bodies. He
is the Editor and co-author of Artificial Intelligence Law and Regulation (Edward Elgar, 2022).
He is the Contributing Editor of AI, Machine Learning & Big Data (GLI, 2023). He was listed
in The Lawyer Hot 100 2022 of “most daring, innovative and creative lawyers”.
Abstract
This essay critically examines the European Union(“EU”) AI Act (the “EU AI Act” or “Act”) as
a significant milestone in the realm of global artificial intelligence (“AI!) regulation. The
analysis delves into the Act’s provisions, implications, challenges, and potential influence
beyond the EU’s borders. With a focus on the Act’s capacity to shape international
standards, foster harmonization, and impact AI development globally, the essay navigates
the intricate landscape of AI governance in a transnational context. By considering the Act’s
role as a precedent-setting framework for ethical AI development and its potential to
influence regulatory paradigms beyond the EU, the essay contributes to the discourse
surrounding the evolving dynamics of AI regulation on a global scale. The exploration of the
Act’s reception, its compatibility with diverse jurisdictions, and the challenges posed by its
implementation provides insights into the complex interplay between AI technologies and
regulatory frameworks across geopolitical boundaries. Ultimately, the essay seeks to
illuminate the broader implications of the EU AI Act in shaping the trajectory of AI
technologies worldwide, while concurrently addressing the challenges and opportunities of
fostering responsible AI integration within an international context.
Key words: Artificial intelligence, EU AI Act, AI, Risk-Based, Transparency, Accountability,
Ethics, Innovation, Regulation, Fundamental Rights, Consumer Protection, Safety and
Security
Basis for extraterritoriality
The EU AI Act, despite its origin within the EU’s legal framework, extends its influence
beyond the confines of the Union’s borders, marking an innovative stride in global AI
regulation. This extraterritorial dimension is underpinned by the Act’s potential to establish
itself as a precedent-setting framework for ethical AI development and regulation, shaping
international norms and practices.
The basis for the extraterritorial reach of the EU AI Act rests on its comprehensive ethical
approach and the potential global influence of its provisions. Ethical considerations
embedded within the Act, such as the prohibition of AI practices posing significant risks and
restrictions on biometric surveillance, reflect universal values and human rights that
transcend national boundaries. By addressing AI-related ethical dilemmas, the Act aligns
with international principles and standards, resonating with the global discourse surrounding
AI governance.
Furthermore, the Act’s potential global influence arises from the EU’s position as a significant
economic and regulatory force. The EU represents a substantial market for AI technologies
and products, compelling non-EU entities to either comply with the Act’s stipulations or risk
exclusion from this expansive market. As such, the Act’s regulatory framework inherently
incentivizes AI developers and operators from non-EU jurisdictions to align their practices
with the Act’s ethical and regulatory mandates, further expanding the scope of its influence
beyond the EU’s borders.
This extraterritorial dimension, however, presents challenges. The Act’s stipulations may not
seamlessly align with the legal and cultural nuances of diverse jurisdictions, potentially
leading to conflicts or divergent interpretations. While the Act’s provisions are built on the
foundation of universal ethical principles, the contextual application of these principles
requires careful consideration and adaptation to the legal systems of non-EU countries.
Ultimately, the EU AI Act’s basis for extraterritoriality emerges from its ethical framework,
global influence, and the EU’s regulatory weight. As a framework that addresses universal
ethical concerns and establishes a precedent for AI regulation, the Act’s influence traverses
geopolitical boundaries. While the extraterritorial reach of the Act carries promise in fostering
global ethical AI practices, it also beckons the challenge of harmonizing diverse legal
landscapes with the Act’s provisions. This essay’s exploration of the Act’s extraterritorial
implications contributes to the evolving discourse on AI governance in a world increasingly
interconnected by technology.
Fundamental rights considerations
The EU AI Act stands as a testament to the recognition of the paramount importance of
safeguarding fundamental rights in the realm of global artificial intelligence (AI) regulation.
The Act’s provisions are meticulously designed to uphold a range of rights, addressing
ethical concerns that resonate across international borders and advancing the discourse on
AI governance from a human-centric perspective.
At the heart of the EU AI Act’s fundamental rights considerations lies the protection of
privacy and personal data. The Act’s stipulations on data quality assessments and
transparency in AI system interactions underscore its commitment to safeguarding
individuals’ privacy rights. By mandating stringent ethical standards for AI development and
operation, the Act inherently aligns with international norms surrounding data privacy, which
transcend geographical boundaries in an increasingly interconnected world.
The Act’s emphasis on transparency and accountability also intersects with broader human
rights principles. Transparency ensures that AI-generated decisions are not shrouded in
opacity, empowering individuals to make informed choices. This aligns with global
endeavours to ensure that individuals have agency over algorithmic outcomes that impact
their lives. Similarly, the requirement for developers to explain AI-generated decisions
resonates with the global movement to establish algorithmic accountability mechanisms,
promoting fairness and preventing discrimination.
However, the application of the EU AI Act’s fundamental rights considerations beyond the
EU presents challenges. Cultural and legal variations across jurisdictions could complicate
the interpretation and application of these provisions. What constitutes a fundamental right
or ethical principle may differ across countries, necessitating contextual adaptations while
adhering to the Act’s overarching principles.
The EU AI Act’s fundamental rights considerations engender a broader discourse on the
ethical dimensions of AI regulation. As AI technologies transcend borders, ethical
considerations must likewise transcend national boundaries. The Act’s focus on protecting
fundamental rights serves as a stepping stone for international cooperation in addressing
common ethical concerns. By fostering an environment where fundamental rights are
safeguarded, the Act lays a foundation for responsible and ethical AI integration on a global
scale.
To this end, the EU AI Act’s fundamental rights considerations embody a human-centric
approach to AI regulation that transcends geopolitical boundaries. The Act’s provisions align
with international norms on privacy, transparency, and accountability, while acknowledging
the challenges of contextual adaptation. By fostering a global discourse on fundamental
rights in the realm of AI, the Act contributes to the advancement of ethical AI practices on a
global stage.
Foregrounding artificial intelligence
The EU AI Act assumes a pivotal role in the global artificial intelligence (AI) regulatory
landscape, foregrounding the significance of comprehensive and ethically-grounded AI
governance. The Act’s emergence as a potential template for international AI regulation
underscores the imperative of addressing the multifaceted challenges posed by AI
technologies on a global scale.
At its core, the EU AI Act foregrounds the potential of AI technologies to reshape societies
and economies while necessitating ethical considerations. By introducing a risk-based
classification system for AI systems, the Act recognizes that not all AI applications are
created equal in terms of their societal impact. This nuanced approach resonates globally,
reflecting a growing awareness that the deployment of AI technologies requires context-
specific ethical scrutiny.
The Act’s emphasis on ethical considerations transcends national boundaries. By mandating
transparency, explainability, and accountability, the Act underscores the importance of
human-centered AI development practices that resonate universally. Ethical concerns tied to
algorithmic bias, privacy infringements, and the erosion of democratic values echo across
international jurisdictions, making the EU AI Act’s principles both relevant and applicable on
a global scale.
However, while foregrounding AI ethics, the EU AI Act must grapple with the challenge of
diverse legal and cultural contexts. Global application requires an understanding of the
intricate interplay between AI ethics and regional nuances. The Act’s principles must be
adaptable without compromising ethical standards, striking a balance between universal
considerations and localized implementation.
The EU AI Act’s foregrounding of AI ethics carries the potential to influence AI regulation
beyond the EU’s borders. As AI technologies traverse continents, shared ethical concerns
call for collaborative efforts in crafting responsible AI frameworks. The Act serves as a
clarion call for international cooperation, prompting stakeholders to collectively address AI’s
transformative potential while safeguarding human rights and values.
In conclusion, the EU AI Act’s foregrounding of AI ethics magnifies its relevance in a global
context. By elevating the discourse surrounding AI governance and ethics, the Act
establishes a foundation for international collaboration. While its principles may require
contextual adaptations, the Act’s overarching goal of responsible AI integration resonates
universally, paving the way for a more ethical and harmonious global AI landscape.
The EU AI Act, while aspiring to establish ethical norms for global AI regulation, faces
inherent burdens and pushback arising from its comprehensive regulatory approach. As a
pioneering framework, the Act navigates a landscape marked by the intricacies of
technological innovation, divergent legal systems, and varied socio-economic contexts.
Burdens and pushback
One notable burden is the challenge of overregulation, an apprehension voiced by critics
who fear that stringent requirements might impede innovation. The Act’s risk-based
classification system aims to categorize AI applications based on their potential societal
impact, but striking the balance between comprehensive regulation and innovation
stimulation is delicate. The Act’s success hinges on its ability to uphold ethical standards
without stifling technological advancement, necessitating a dynamic regulatory mechanism
that can adapt to evolving AI landscapes.
Pushback against the EU AI Act is also evident in its global application. While the Act’s
ethical principles resonate universally, the intricacies of legal and cultural contexts across
jurisdictions pose challenges. Some non-EU jurisdictions might resist adopting the Act’s
stipulations due to their perceived incompatibility with local practices or a reluctance to
conform to foreign regulations. The Act’s efficacy as a global AI regulatory model rests on its
ability to navigate these pushbacks and engender a harmonious alignment of ethical
principles with regional norms.
Moreover, the EU AI Act’s implementation across diverse EU member states introduces
complexities. The Act’s provisions must be uniformly interpreted and applied, yet the EU’s
decentralized legal system might lead to inconsistent enforcement practices. This potential
fragmentation challenges the Act’s foundational objective of fostering a harmonized
European AI regulatory environment.
In light of these burdens and pushback, the EU AI Act’s trajectory hinges on its capacity to
adapt and evolve. The Act must strike a balance between fostering innovation and upholding
ethical AI development, ensuring that its provisions are adaptable to diverse legal and
cultural landscapes. Collaborative efforts to address pushback from non-EU jurisdictions
require a nuanced understanding of regional dynamics, facilitating a convergence of global
AI ethics while respecting sovereignty.
In essence, the EU AI Act’s ambitions are accompanied by substantial burdens and
pushback. Balancing ethical considerations with innovation, navigating global application
challenges, and ensuring uniformity within the EU pose intricate challenges. The Act’s ability
to surmount these hurdles and evolve in response to feedback will shape its efficacy as a
pioneering global AI regulatory framework, paving the way for ethical AI integration on a
worldwide scale.
Conclusion: Regional regulation as global inspiration
The EU AI Act stands as a testament to the potential of regional regulation to inspire global
ethical norms in the realm of AI. As a comprehensive framework addressing the multifaceted
challenges of AI governance, the Act’s journey resonates beyond the borders of the
European Union, presenting a paradigm for international collaboration and responsible AI
integration.
The Act’s establishment underscores the EU’s commitment to fostering AI development that
aligns with ethical considerations and societal values. Its risk-based classification system,
emphasis on transparency and accountability, and safeguards against AI practices posing
significant risks reflect principles that transcend geopolitical boundaries. By nurturing ethical
AI development practices within its jurisdiction, the Act extends its influence as a beacon of
responsible AI integration that reverberates across global AI landscapes.
While rooted in the EU’s regulatory framework, the Act’s potential to inspire global norms lies
in its principles’ resonance with universal ethical values. The Act’s ethical underpinnings,
focusing on transparency, accountability, and the protection of fundamental rights, offer a
blueprint for AI governance that is adaptable and applicable in diverse jurisdictions. Its role
as a catalyst for international dialogue and collaboration reflects the interconnected nature of
AI technologies, underscoring the importance of transcending national borders in addressing
shared ethical challenges.
However, the Act’s journey to global inspiration is accompanied by challenges. The
pushback from non-EU jurisdictions and the need for contextual adaptations highlight the
complexities of harmonizing global AI ethics. The Act’s success as a global model hinges on
its capacity to navigate these challenges while fostering cooperative efforts and cross-border
engagement.
In conclusion, the EU AI Act exemplifies the potential of regional regulation to inspire global
ethical norms in the rapidly evolving field of artificial intelligence. Its principles, rooted in
ethical considerations and fundamental rights, transcend geographical boundaries, offering a
roadmap for responsible AI integration that resonates universally. The Act’s journey
underscores the importance of collaboration and shared values in navigating the ethical
intricacies of AI governance on a global scale. As AI technologies continue to shape
societies and economies worldwide, the Act’s legacy stands as an enduring testament to the
role of regional initiatives in shaping the future of AI governance.
Acknowledgments
We extend our sincere gratitude to CMS UK for their invaluable support, guidance, and
assistance throughout the process of producing this academic article. Their expertise and
insights have been instrumental in shaping the content and ensuring its accuracy. We are
truly appreciative of their commitment to excellence and their dedication to fostering
knowledge and collaboration within the legal and academic realms.
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