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AI Watch: Global regulatory tracker

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Keeping track of AI regulatory developments around the world.

The global dash to regulate AI

Artificial intelligence (AI) has made enormous strides in recent years and has increasingly moved into the public consciousness.

Increases in computational power, coupled with advances in machine learning, have fueled the rapid rise of AI. This has brought enormous opportunities, as new AI applications have given rise to new ways of doing business. It has also brought potential risks, from unintended impacts on individuals (e.g., AI errors harming an individual's credit score or public reputation) to the risk of misuse of AI by malicious third parties (e.g., by manipulating AI systems to produce inaccurate or misleading output, or by using AI to create deepfakes).

Governments and regulatory bodies around the world have had to act quickly to try to ensure that their regulatory frameworks do not become obsolete. In addition, international organizations such as the G7, the UN, the Council of Europe and the OECD have responded to this technological shift by issuing their own AI frameworks. But they are all scrambling to stay abreast of technological developments, and already there are signs that emerging efforts to regulate AI will struggle to keep pace. In an effort to introduce some degree of international consensus, the UK government organized the first global AI Safety Summit in November 2023, with the aim of encouraging the safe and responsible development of AI around the world. 

Most jurisdictions have sought to strike a balance between encouraging AI innovation and investment, while at the same time attempting to create rules to protect against possible harms. However, jurisdictions around the world have taken substantially different approaches to achieving these goals, which has in turn increased the risk that businesses face from a fragmented and inconsistent AI regulatory environment. Nevertheless, certain trends are becoming clearer at this stage:

  1. "AI" means different things in different jurisdictions: One of the foundational challenges that any international business faces when designing an AI regulatory compliance strategy is figuring out what constitutes "AI." Unfortunately, the definition of AI varies from one jurisdiction to the next. For example, the EU AI Act adopts a definition of "AI systems" that is based on (but is not identical to) the OECD's definition, and which leaves room for substantial doubt due to its uncertain wording. Canada has proposed a similar, though more concise, definition. Various US states have proposed their own definitions, which differ from one another. And many jurisdictions (e.g., the UK, Israel, China, and Japan) do not currently provide a comprehensive definition of AI. Because several of the proposed AI regulations have extraterritorial effect (meaning more than one AI regulation may apply simultaneously), international businesses may be forced to adopt a "highest common denominator" approach to identifying AI based on the strictest applicable standard.
  2. Emerging AI regulations come in different forms: The various emerging AI regulations have no consistent legal form – some are statutes, some are executive orders, some are expansions of existing regulatory frameworks, and so on. The EU AI Act is a "Regulation" (which means that most of it will apply directly in all EU Member States, without the need for national implementation in most cases). The UK has taken a different approach, declining to legislate at this early stage in the development of AI, and instead choosing to task existing UK regulators with the responsibility of interpreting and applying five AI principles in their respective spheres. In the US, there is a mix of White House Executive Orders, federal and state initiatives, and actions by existing regulatory agencies, such as the Federal Trade Commission. As a result, the types of compliance obligations that international businesses face are likely to be materially different from one jurisdiction to the next. Many other jurisdictions have yet to decide whether they will issue sector-specific or generally applicable rules and have yet to decide between creating new regulators or expanding the roles of existing regulators, making it challenging for businesses to anticipate what form their AI regulatory relationships will take in the long term.
  3. Emerging AI regulations have different conceptual approaches: The next difficulty is the lack of a consistent conceptual approach among emerging AI regulations around the world – some are legally binding while others are not, some are sector-specific while others apply across all sectors, some will be enforced by regulators while others are merely guidelines or recommendations, and so on. As noted above, the UK approach is to use existing regulators to implement five AI principles, but with no new explicit legal obligations. This has the advantage of meaning that businesses will deal with AI regulators with whom they are already familiar but has the disadvantage that different UK regulators may interpret these principles differently in their respective spheres. The EU AI Act is cross-sectoral and creates new regulatory and enforcement powers for existing bodies, including the European Commission, and also creates entirely new bodies such as the AI Board and the AI Office, while leaving EU Member States to appoint their own AI regulators tasked with enforcing the EU AI Act. In the US, the Federal Trade Commission, Equal Employment Opportunity Commission, Consumer Financial Protection Bureau, and Department of Justice issued a joint statement clarifying that their existing authority covers AI, while various state regulators are also likely to have competence to regulate AI. International organizations including the OECD, the UN, and the G7 have issued AI principles, but these impose no legal obligations on businesses. In principle, these initiatives encourage consistency across members of each organization, but in practice this does not seem to have worked.
  4. Flexibility is a double-edged sword: In an effort to create AI regulations that can adapt to technological advances that have not yet been anticipated, many jurisdictions have sought to include substantial flexibility in those regulations, either by using deliberately high-level wording and policies, or by allowing for future interpretation and application by courts and regulators. This has the obvious advantage of prolonging the lifespan of such regulations by allowing them to be adapted to future technologies. However, it also creates the disadvantage of uncertainty because it leaves businesses uncertain of how their compliance obligations will be interpreted in the future. This is likely to mean that it is harder for businesses to know whether their planned implementations of AI will be lawful in the medium-to-long term and may make it harder to attract long-term AI investment in those jurisdictions.
  5. The overlap between AI regulation and other areas of law is complex: A substantial number of laws that are not directly focused on AI nevertheless apply to AI by association within their respective spheres, meaning that any use of AI will often trigger compliance issues and legal challenges even where there is not (yet) any enforceable AI-specific law. These areas of overlap include: IP (e.g., IP infringement issues with respect to AI model training data, and questions about copyright and patentability of AI-assisted inventions); antitrust; data protection (which adds restrictions to processing of personal data, and in some cases imposes special compliance obligations for processing carried out by automated means, including by AI); M&A (where AI innovation is driving dealmaking in many markets); financial regulation (where financial regulatory requirements may limit the ways in which AI can lawfully be deployed); litigation; digital infrastructure; securities; global trade; foreign direct investment; mining & metals; and so on. This overlap will mean that many businesses need to understand not just AI regulations in general, but also any rules that affect the use of AI in the context of the relevant sector or business activity.

Businesses in almost all sectors need to keep a close eye on these developments to ensure that they are aware of the AI regulations and forthcoming trends, in order to identify new opportunities and new potential business risks. But even at this early stage, the inconsistent approaches each jurisdiction has taken to the core questions of how to regulate AI is clear. As a result, it appears that international businesses may face substantially different AI regulatory compliance challenges in different parts of the world. To that end, this AI Tracker is designed to provide businesses with an understanding of the state of play of AI regulations in the core markets in which they operate. It provides analysis of the approach that each jurisdiction has taken to AI regulation and provides helpful commentary on the likely direction of travel.

Because global AI regulations remain in a constant state of flux, this AI Tracker will develop over time, adding updates and new jurisdictions when appropriate. Stay tuned, as we continue to provide insights to help businesses navigate these ever-evolving issues.

Articles

Australia

Voluntary AI Ethics Principles guide responsible AI development in Australia, with potential reforms under consideration.

Australia

Brazil

The enactment of Brazil's proposed AI Regulation remains uncertain with compliance requirements pending review.

Sao Paulo

Canada

AIDA expected to regulate AI at the federal level in Canada but provincial legislatures have yet to be introduced.

Canada

China

The Interim AI Measures is China's first specific, administrative regulation on the management of generative AI services.

China

Council of Europe

The Council of Europe is developing a new Convention on AI to safeguard human rights, democracy, and the rule of law in the digital space covering governance, accountability and risk assessment.

European Union

Czech Republic

The successful implementation of the EU AI Act into national law is the primary focus for the Czech Republic, with its National AI Strategy being the main policy document.

Czech Republic

European Union

The EU introduces the pioneering EU AI Act, aiming to become a global hub for human-centric, trustworthy AI.

 

European Union

France

France actively participates in international efforts and proposes sector-specific laws.

Paris

G7

The G7's AI regulations mandate Member States' compliance with international human rights law and relevant international frameworks.

G7 flags

Germany

Germany evaluates AI-specific legislation needs and actively engages in international initiatives.

Germany

India

National frameworks inform India’s approach to AI regulation, with sector-specific initiatives in finance and health sectors.

India

Israel

Israel promotes responsible AI innovation through policy and sector-specific guidelines to address core issues and ethical principles.

Israel

Italy

Italy engages in political discussions for future laws.

Milan

Japan

Japan adopts a soft law approach to AI governance but lawmakers advance proposal for a hard law approach for certain harms.

Tokyo

Kenya

Kenya's National AI Strategy and Code of Practice expected to set foundation of AI regulation once finalized.

Kenya
Kenya

Nigeria

Nigeria's draft National AI Policy underway and will pave the way for a comprehensive national AI strategy.

Nigeria
Nigeria

Norway

Position paper informs Norwegian approach to AI, with sector-specific legislative amendments to regulate developments in AI.

Norway

OECD

The OECD's AI recommendations encourage Member States to uphold principles of trustworthy AI.

country flags

Saudi Arabia

Saudi Arabia is yet to enact AI Regulations, relying on guidelines to establish practice standards and general principles.

Riyadh_Hero_1600x600 Saudi Arabia

Singapore

Singapore's AI frameworks guide AI ethical and governance principles, with existing sector-specific regulations addressing AI risks.

Singapore

South Africa

South Africa is yet to announce any AI regulation proposals but is in the process of obtaining inputs for a draft National AI plan.

Johannesburg

South Korea

South Korea's AI Act to act as a consolidated body of law governing AI once approved by the National Assembly.

Korea

Spain

Spain creates Europe's first AI supervisory agency and actively participates in EU AI Act negotiations.

Madrid

Switzerland

Switzerland's National AI Strategy sets out guidelines for the use of AI, and aims to finalize an AI regulatory proposal in 2025.

Switzerland

Taiwan

Draft laws and guidelines are under consideration in Taiwan, with sector-specific initiatives already in place.

Taiwan city

Turkey

Turkey has published multiple guidelines on the use of AI in various sectors, with a bill for AI regulation now in the legislative process.

Türkiye

United Arab Emirates

Mainland UAE has published an array of decrees and guidelines regarding regulation of AI, while the ADGM and DIFC free zones each rely on amendments to existing data protection laws to regulate AI.

UAE

United Kingdom

The UK prioritizes a flexible framework over comprehensive regulation and emphasizes sector-specific laws.

London hero image

United Nations

The UN's new draft resolution on AI encourages Member States to implement national regulatory and governance approaches for a global consensus on safe, secure and trustworthy AI systems.

United Nations

United States

The US relies on existing federal laws and guidelines to regulate AI but aims to introduce AI legislation and a federal regulation authority.

New York city photo

Contacts

Tim Hickman
Partner
London
Erin Hanson
Partner
New York
Dr. Sylvia Lorenz
Partner
Berlin
Germany

AI Watch: Global regulatory tracker - Germany

Germany evaluates AI-specific legislation needs and actively engages in international initiatives.

Insight
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8 min read

Laws/Regulations directly regulating AI (the “AI Regulations”)

Currently, with the exception of minor references to AI in German labor law (discussed further below) relating to works councils, there are no specific laws, statutory rules, or regulations in Germany that directly regulate AI. Germany is not expected to enact its own comprehensive AI legislation because (as for all EU Member States) the EU AI Act is expected to fulfill this function.

With a legislative amendment in mid-2021, a reference to AI was included in three provisions of the German Works Constitution Act (Betriebsverfassungsgesetz; see Section 80(3), Section 90(1) No. 3 and Section 95(2a) Works Constitution Act).1 The provisions include, inter alia, a right to information for works councils if AI is to be used in the workplace and facilitate the consultation of an expert by works councils related to the introduction or use of AI. The novel references to AI in the German Works Constitution Act can be regarded as fairly narrow in scope and should not materially change the German labor law regime.

According to several official statements, the German government continues to evaluate the need for additional AI-specific national legislation.2

Status of the AI Regulations

The EU AI Act is addressed separately here: AI watch: Global regulatory tracker - European Union

As noted above, there are currently no specific laws or regulations in Germany that directly regulate AI, except for references to AI in the Works Constitution Act (as described above).

Other laws affecting AI

There are various laws that do not directly seek to regulate AI but may affect the development or use of AI in Germany. A non-exhaustive list of key examples includes:

  • The German Civil Code (BGB)
  • The Product Liability Act (ProdHaftG)
  • The Copyright Act (UrhG), in particular Sections 44b and 60d concerning text and data mining
  • Intellectual property laws that may affect several aspects of AI development and use

Definition of “AI”

As noted above, there are currently no specific laws or policies in Germany that directly regulate AI, except for the minor references to AI in German labor law, which do not define AI. As such, no definition of AI is currently recognized through German national legislation.

The German government's 2018 National AI Strategy, the Strategy's 2020 Update and the 2023 AI Action Plan also do not commit to a definition, with the 2018 National AI Strategy stating that the strategy is aimed at "weak/narrow" AI (i.e., AI that focuses on solving specific practical problems).3 However, in April 2023, in response to a parliamentary enquiry, the German government acknowledged the AI definition set out in the EU Council's December 2022 mandate for the EU AI Act. As the German government has recently approved the now finalized EU AI Act, the definition of an AI system contained in Art. 3(1) of the EU AI Act will likely be the key and most relevant definition in Germany.

Territorial scope

As noted above, there are currently no specific laws or regulations in Germany that directly regulate AI, other than minor references to AI in German labor law that concern works councils in certain companies that maintain operations in Germany. Beyond that, there is no specific territorial scope at this stage.

Sectoral scope

As noted above, there are currently no specific laws or regulations in Germany that directly regulate AI, other than the minor references to AI in German labor law concerning works councils. Accordingly, there is no specific sectoral scope at this stage.

Compliance roles

As noted above, there are currently no specific laws or regulations in Germany that directly regulate AI, other than the minor references to AI in German labor law concerning works councils. Accordingly, there are currently no specific or unique obligations imposed on developers, users, operators and/or deployers of AI systems, other than the limited duties of employers toward works councils described above.

As broad political agendas, the 2018 National AI Strategy and its 2020 Update focus on all actors along the AI value chain, as well as on society as a whole. The strategy papers emphasize the responsibilities of AI hardware and software manufacturers and deployers, but also address the interests of affected persons. Since these plans were published before the legislative process for the EU AI Act was initiated with the EU Commission's April 2021 proposal, the EU AI Act will likely address many of these concerns. The 2023 AI Action Plan does not highlight any specific compliance roles in the context of potential future national AI regulation.5

Core issues that the AI Regulations seek to address

As noted above, there are currently no specific laws or regulations in Germany that directly regulate AI, other than the minor references to AI in German labor law concerning works councils. Nevertheless, Germany's Independent Federal Anti-Discrimination Commissioner has highlighted discrimination risks posed by AI systems as a core issue, and called for improved statutory protections,6 while Germany's Federal Commissioner for Data Protection and Freedom of Information has called for the need to protect personal data and the rights established under the GDPR.7

Discrimination and data protection issues are also a core concern addressed by the 2018 National AI Strategy and its 2020 Update.8 Political discussions have been underway to enact a German national law on employee data protection in addition to the EU GDPR, which could also contain dedicated provisions on AI. However, it remains unclear whether such a law will be passed. Both the 2018 National AI Strategy and its 2020 Update emphasize that the development and use of AI must be based on human rights and fundamental rights. They identify IT and cyber security, product safety, transparency and the availability and quality of data as further key issues. The 2023 AI Action Plan stresses that a balance must be struck between regulating AI risks and over-regulation, which could inhibit innovation and result in unexploited potential.9

Risk categorization

As noted above, there are currently no specific laws or regulations in Germany that directly regulate AI, other than the minor references to AI in German labor law concerning works councils. These provisions and the aforementioned policy plans do not set out an AI-related risk categorization. However, the 2023 AI Action Plan welcomes the risk-based approach of the EU AI Act.10

Key compliance requirements

As noted above, there are currently no specific laws or regulations in Germany that directly regulate AI, other than the minor references to AI in German labor law concerning works councils. Therefore, with the exception of the limited duties of employers toward works councils described above, there are no specific AI-related national compliance requirements.

Regulators

In Germany, various ministries of the federal government are addressing AI and are participating in international regulatory processes. This includes:

  • The Federal Ministry for Economic Affairs and Climate Action and the Federal Ministry of Justice, which were involved in negotiations on the EU AI Act
  • The Federal Ministry for Digital and Transport, which is, inter alia, engaged in the G7 Hiroshima Process on Generative Artificial Intelligence
  • The Federal Ministry of Education and Research, which has recently published the 2023 AI Action Plan as well as significantly increased public funding for AI initiatives

In addition, there are ongoing discussions as to which German authority will be designated as the national supervisory authority required under the EU AI Act. Potential candidates include the Federal Network Agency, the Federal Office for Information Security and the federal and state data protection authorities.11

Furthermore, regulators at the level of the German states have been dealing with AI as well. In fact, every German state has published at least one AI-related document.12

Enforcement powers and penalties

As noted above, there are currently no specific laws or regulations in Germany that directly regulate AI, other than the minor references to AI in German labor law concerning works councils. As such, enforcement and penalties relating to the creation, dissemination and/or use of AI are governed by: (i) the EU AI Act; and (ii) related violations in non-AI specific regulation. The detail of the EU AI Act is not discussed here.

1 An English translation of the Works Constitution Act is available here.
2 See, for example, a statement on the National AI Strategy website: "The Federal Government will review the legal framework for algorithm- and AI-based decisions, services and products and possibly adapt it to ensure that effective protection against bias, discrimination, manipulation or other misuse is possible." (our translation),
available here; see also the National AI Strategy (2018) itself, page 9, II, j.: “"We want to [...] examine whether the regulatory framework needs to be further developed to ensure a high degree of legal certainty [...]", available here
3 The 2018 National AI Strategy is
available here; the 2020 Update is available here; and the 2023 AI Action Plan is available here.
4 The German government’s April 2023 response to the brief parliamentary enquiry is
available here.
5 The 2018 National AI Strategy is
available here; the 2020 Update is available here; and the 2023 AI Action Plan is available here.
6 Germany’s Independent Federal Anti-Discrimination Commissioner’s comments are
available here.
7 The Federal Commissioner for Data Protection and Freedom of Information’s comments are
available here.
8 The 2018 National AI Strategy is
available here; the 2020 Update is available here; and the 2023 AI Action Plan is available here.
9 The 2018 National AI Strategy is
available here; the 2020 Update is available here; and the 2023 AI Action Plan is available here.
10 The 2018 National AI Strategy is
available here; the 2020 Update is available here; and the 2023 AI Action Plan is available here.
11 An article by Tagesspiegel Background on this issue is
available here.
12 See an article on the Digital Society Blog of the Alexander von Humboldt Institute for Internet and Society (HIIG),
available here.

White & Case means the international legal practice comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and entities.

This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.

© 2024 White & Case LLP

Timo Gaudszun (Legal Intern, White & Case, Berlin) contributed to this publication.

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