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Regulating AI – A Global Perspective

Home Insights Regulating AI – A Global Perspective

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Contributed by: Liz Blythe and Zoe Sims

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Published on: February 27, 2019

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It is well understood that AI has the potential to improve efficiency, unlock valuable and previously unobtainable insights from data, and improve profitability in almost every sector globally. In the New Zealand context, we are particularly well placed to leverage the opportunities that AI creates, with the relative ease of doing business, lack of corruption, local investment opportunities and supportive and open culture making New Zealand an attractive place for technology companies to do business.

Owing to our geographic location and population size, New Zealand is also considered by many companies around the world as a good place to test out new technologies, with companies such as Volvo, Microsoft and Facebook all having used New Zealand as a testing ground. New Zealand's AI Forum has quantified this opportunity and predicted that by just 2035, AI has the potential to increase NZ GDP by up to $54 billion.1 However, despite all of this, New Zealand still does not currently have a nationally co-ordinated AI policy or strategy. 

Chartered Accountants Australia and New Zealand recently warned that we are at an ethical crossroads where decisions need to be made about how AI will shape our future.2  If we do not set the right ethical framework now, AI technology could result in negative outcomes including exacerbating the wealth and resource disparity in society that we are already starting to see globally today. Similarly, the New Zealand AI Forum has advocated that New Zealand needs to engage substantially with AI now to shape a prosperous, inclusive and thriving future for our nation.3

While not leading the charge in this area, New Zealand is certainly not alone in its lack of national co-ordination and strategy regarding AI. For example, Australia similarly does not currently have national AI policies and earlier this year a number of key business leaders penned an open letter calling for urgent national debate about the impact of AI on Australian society and potential long-term issues.

However, other countries are more progressed in their discourse. For example, the Canadian government launched the Vector Institute back in March 2017, which aims to drive excellence and leadership in Canada’s knowledge, creation, and use of AI to foster economic growth and improve the lives of Canadians.4

In July of that same year, China's State Council issued the "New Generation AI Development Plan" with the goal of building a $150 billion AI technology industry in China by 2030, and is reportedly making great strides in achieving this goal. Similarly, in 2018, the French government unveiled its national strategy for AI, with the goal of becoming a global leader in AI technology. The UK has considered the matter at both a Select Committee and House of Lords level and emphasised the importance of AI as an area of “seismic global change” and advocated for regulatory action (although, as yet, has been unable to provide specific solutions).5

It is only a matter of time before New Zealand begins to tackle these issues domestically and develop a more structured approach. As and when this happens, it could itself be very disruptive to those who have invested early on in products that subsequently require re-engineering to meet new legal and regulatory requirements.

Privacy is a good example of the disruptive power of legislation in the context of emerging technologies. Europe's General Data Protection Regulation (GDPR) came into force in May 2018, with much more prescriptive and notably stricter requirements in a number of areas than its predecessor. Organisations like Microsoft have been forced to re-engineer product functionality in order to comply with the change in law.6  Other organisations have chosen to remove functionality from, or completely withdraw, products from the EU due to GDPR requirements, with Instapaper (owned by Pinterest) reportedly temporarily disconnecting EU customers from its service altogether whilst implementing its required GDPR changes. 

These examples demonstrate the challenges that New Zealand organisations currently face in implementing new technologies against a backdrop of regulatory uncertainty. Care should therefore be taken to ensure that early implementations of any such technologies are employed ethically, transparently and with due consideration to the associated impact that they may have on individuals. Based on international experience to date, these are likely to be key focus areas for legislators and regulators.

Despite the inevitable short-term disruption that new legislation will bring, developing a nationally co-ordinated AI framework will provide longer-term certainty and put New Zealand in the best possible position to leverage the opportunities that AI creates.

If you would like any advice regarding the issues discussed in this article, or assistance in getting the right legal protections in place for your business before implementing AI technology in your organisation, please do not hesitate to contact us.

FOOTNOTES
  1.   AI Forum New Zealand, "Artificial Intelligence: Shaping a Future New Zealand" (May 2018).
  2. ∧   Chartered Accountants Australia and New Zealand, "Machines can learn but what will we teach them" (July 2018).
  3.   AI Forum New Zealand, "Artificial Intelligence: Shaping a Future New Zealand" (May 2018).
  4.   Vector Institute.
  5.   Government response to House of Lords Artificial Intelligence Select Committee's Report on AI in the UK" Ready, Willing and Able? (June 2018).
  6.   Microsoft, "Microsoft’s commitment to GDPR, privacy and putting customers in control of their own data" (May 2018).

Talk to one of our experts:

Liz Blythe I Partner, Technology – [email protected] 
Auckland I DD +64 9 367 8145

Zoe Sims I Solicitor, Technology [email protected]
Auckland I DD +64 9 367 8074

 

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