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AI Systems Automate Efficiency, But Invite Regulatory Scrutiny

Bloomberg Law

  • June 08, 2023

Sarah Hutchins and Robert Botkin co-authored an article in Bloomberg Law about companies facing increasing regulatory scrutiny over how they use artificial intelligence.

“Federal regulators have increased enforcement efforts tied to automated systems that many businesses now use,” they wrote. “On April 25 the Equal Employment Opportunity Commission, Consumer Financial Protection Bureau, Department of Justice, and Federal Trade Commission issued a joint statement pledging to use existing laws to protect the public from bias in automated systems.”

“Emerging technologies should expect this pledge to result in the application of laws such as Title VII of the Civil Rights Act of 1964, Section 5 of the FTC Act, and the Children’s Online Privacy Protection Act, along with many other consumer financial protection laws,” they wrote. “Automated systems, as described in the joint statement, include ‘software and algorithmic processes that are used to automate workflows and help people complete tasks or make decisions,’ which ‘includes those [systems] sometimes marketed as ‘artificial intelligence.’”

“Businesses should focus on three points made in the joint statement,” they continued:

  • “The definition of automated system is extremely broad and could apply to a number of different technologies aimed at enhancing efficiencies—everything from email filters that automatically sort mail into folders to programs that analyze property values based on recent sales of similar property”
  • “Automated systems used only to aid a person in making a decision—and are not the sole basis for that decision—are still within the scope of the definition”
  • “Licensees of automated systems need to ensure the automated system is being used in the appropriate context.”

Subscribers can read the full article here: AI Systems Automate Efficiency, But Invite Regulatory Scrutiny

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