Adapting the AI ​​law to innovative small businesses, a headache for the EU

The EU has the advantage of being the first in the world to propose a set of rules on artificial intelligence (AI). However, in the absence of appropriate measures, this emerging market could be left in the hands of large players, to the detriment of smaller companies.

The Artificial Intelligence Act (AI Act) regulates AI based on its potential for harm, in line with new AI legislation. It falls within the scope of product legislation. For AI systems considered to be high risk, the regulations introduce stricter requirements.

Controls ex ante are generally used to assess the compliance of a product that will not change during its life cycle. However, the AI ​​itself can evolve as it receives new data and the system “improves” via machine learning.

MEP Josianne Cutajar, who has been monitoring the dossier for the European Parliament’s Transport Committee (TRAN), does not want to stop there. According to her, given the constant evolution of this new technology, policymakers must continue to be vigilant and ensure that small and medium-sized enterprises (SMEs) can take advantage of this regulation, without suffering from compliance too costly.

“The impact assessment carried out by the Commission has largely underestimated the potential costs of compliance”said Sebastiano Toffaletti, Secretary General of the European DIGITAL SME Alliance, which represents the interests of SMEs in the digital sector, at the same event.

The trade association has formed an AI think tank to discuss with 150 leading AI SMEs the potential effects of the new legislation. Mr Toffaletti believes that the EU runs the risk of proposing legislation which, without even realizing it, could cede the market to the biggest players, to the detriment of SMEs.

An analysis that does not share Kilian Gross, head of the European Commission unit in charge of AI. According to him, if the administrative burden weighs differently depending on the size of the AI ​​provider, the risk remains the same.

According to Mr Toffaletti, the approach followed by the AI ​​regulation could, however, lead to cost inflation since, once the new rules are in place, SMEs will only be able to discuss how to comply with them. conformity assessment bodies, which are private entities with an interest in increasing costs.

Another fundamental criticism relates to the fact that conformity assessment ex ante tends to be efficient in the case of economies of scale. In contrast, Toffaletti pointed out that AI systems are mostly highly customized products, often aimed at enterprises.

“The question is always: what is the alternative? If we don’t do compliance testing or certification before these products enter the market, how are we going to ensure safety and trust in these products? » asked Miriam Buiten, assistant professor at the University of St. Gallen.

Although the general architecture of the AI ​​Regulation is not likely to change at this stage of the legislative process, Intellera Consulting, a consulting firm specializing in technical assistance to European institutions, presented at the same event a study self-funded on how to optimize compliance costs with SMEs.

Massimo Pellegrino, one of the authors of the paper, proposed to introduce a differentiation between SMEs that incorporate AI into their end products and those that integrate AI systems into their internal products. In the latter case, SMEs should simply be considered as users, which would help reduce the administrative burden and avoid regulatory bottlenecks.

Another way to reduce compliance costs is to use technical standards, which are by default based on EU rules. However, also in this case, SMEs should be given special attention, since the process of developing standards is usually carried out by large companies with greater financial means.

Finally, Mr Pellegrino also proposed giving more power to European digital innovation hubs (European Digital Innovation Hubs, EDIH) so that they can become test and experience centers or even act as conformity assessment bodies.

[Édité par Anne-Sophie Gayet]

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Adapting the AI ​​law to innovative small businesses, a headache for the EU

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