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Introduction
The development and adoption of Artificial Intelligence
(“AI“) has seen a global surge in recent
years. It is estimated that AI has the potential to add USD 957
billion, or 15 per cent of the current gross value added to
India’s economy in 2035. It is projected that the AI software
market will reach USD 126 billion by 2025, up from USD 10.1 billion
in 2018. There is an increased application of AI to a variety of
private and public use, and it is expected that AI usage will
become ingrained and integrated with society.1
In India, large-scale applications of AI are being implemented
and used across various sectors such as healthcare, agriculture,
and education to improve the potential in these sectors. In
February 2021, the NITI Udyog released the approach document, proposing principles for
‘responsible AI’ development (“Approach
Document“).
AI is set to be a “defining future technology”; but
what exactly is AI, and what are the challenges and considerations
for regulating AI?
The scope of this article is to examine the challenges and
considerations in the regulation of AI in India. We have also
examined the approach for the regulation of AI in other developed
jurisdictions such as the European Union and the United States.
This article has relied on the Approach Document to understand the
systems considerations and societal considerations which come up
from the implementation of AI into technology and society. The AI
considered here is ‘Narrow AI’, which is a broad term given
to AI systems that are designed to solve specific challenges that
would ordinarily require domain experts. Broader ethical
implications of ‘Artificial General Intelligence’ (AGI) or
‘Artificial Super Intelligence’ (ASI) are not considered in
this article. Further, systems considerations considered in this
document mainly arise from decisions taken by
algorithms2.
Definition of Artificial Intelligence
The Approach Document describes “Artificial
Intelligence” as “a constellation of
technologies that enable machines to act with higher levels of
intelligence and emulate the human capabilities of sense,
comprehend and act. Computer vision and audio processing can
actively perceive the world around them by acquiring and processing
images, sound, and speech. Natural language processing and
inference engines can enable AI systems to analyse and understand
the information collected. An AI system can also take decisions
through inference engines or undertake actions in the physical
world. These capabilities are augmented by the ability to learn
from experience and keep adapting over
time”3.
The integration of AI into technology and society gives rise to
unique challenges. Further, as AI becomes more sophisticated and
autonomous, concerns with respect to accountability, bias, and
societal well-being may arise.
Considerations while Regulating AI
The following main considerations can be identified while
implementing AI i.e. (i) systems considerations and (ii) societal
considerations4. We further analyse the regulatory
implications stemming from such considerations.
(i) System Considerations: Systems
considerations are implications that have direct impacts on
citizens (or primary ‘affected stakeholders’) being subject
to decisions of a specific AI system. These typically result from
system design choices, development, and deployment
practices5.
Some of the system considerations are:
(a) Potential for bias: Though automated solutions are
often expected to introduce objectivity to decision-making, recent
cases globally have shown that AI solutions have the potential to
be ‘biased’ have been identified and tend to be
‘unfair’ for certain groups (across religions, race, caste,
gender, genetic diversity. The emergence of bias in AI solutions is
attributed to several factors arising from various decisions taken
across different stages of the lifecycle and the environment in
which the system learns. The performance of the AI solution is
largely dictated by the rules defined by its developers. Responses
generated by AI solutions are limited by the data set on which it
is trained. Hence, if the data set includes biased information,
naturally, the responses generated will reflect the same bias.
While this is not intentional, it is inevitable, since no data set
could be free from all forms of bias. The AI solution cannot
critically examine the data set it is trained on, since it lacks
comprehension and is hence incapable of eliminating the bias
without some form of human intervention.
Bias is a serious threat in modern societies. We cannot,
therefore, risk developing AI systems with inbuilt biases. The role
of regulation in this regard would be to specify and penalize any
development of AI with such biases. Regulation must also prescribe
that developers should invest in research and development of bias
detection and mitigation and incorporate techniques in AI to ensure
fair and unbiased outcomes. Legislation must further provide for
penalties on developers developing AI with biased outcomes.
(b) Accountability of AI decisions: In the development of
AI, it is understood that different entities may be involved in
each step of the development and deployment process. Different
entities associated with complex computer systems make it difficult
to assign responsibility for accountability and legal recourse.
Since there are many individuals or entities involved in the
development of AI systems, assigning responsibility or
accountability, or identifying the individual or entity responsible
for a particular malfunction may be difficult. Consequently,
pursuing legal recourse for the harm caused is a challenge.
Traditional legal systems allocate responsibilities for action and
consequences to a human agent. In the absence of a human agent, it
is essential for regulation to find a methodology for identifying
or determining the individual or entity involved. All stakeholders
involved in the design, development and deployment of the AI
systems must specifically be responsible for their respective
actions. The imposition of such obligations can be achieved through
regulation.
(ii) Societal considerations: Societal
considerations are implications caused due to the overall
deployment of AI solutions in society. This has potential
repercussions on society beyond the stakeholder directly
interacting with the system. Such considerations may require policy
initiatives by the Government6.
One of the societal considerations is “impact on the
job”. The rapid rise of AI has led to the automation of
several routine job functions and has consequently led to
large-scale layoffs and job losses. The use of AI in the workplace
is expected to result in the elimination of a large number of jobs
in the future as well.
Regulation through appropriate provisions in labour or
employment law legislation can in this regard check and ensure that
work functions are not arbitrarily replaced by AI. It is well
understood that corporations are driven by profit and hence AI may
be a cost-effective option. Nevertheless, it is possible to
regulate through legislation any such replacement of human jobs by
AI in the larger interests of society.
Indian Position
Currently, India does not have codified laws, statutory rules or
regulations that specifically regulate the use of AI. Establishing
a framework to regulate AI would be crucial for guiding various
stakeholders in the responsible management of AI in India.
There are certain sector-specific frameworks that have been
identified for the development and use of AI.7 In the
finance sector, SEBI issued a circular in Jan 2019 to Stockbrokers,
Depository Participants, Recognized Stock Exchanges and
Depositories on reporting requirements for Artificial Intelligence
(AI) and Machine Learning (ML) applications and systems offered and
used.
In the health sector, the strategy for National Digital Health
Mission (NDHM) identifies the need for the creation of guidance and
standards to ensure the reliability of AI systems in health.
Recently on June 9, 2023, the Ministry of Electronics and
Information Technology (MEITY), suggested that AI may be regulated
in India just like any other emerging technology (to protect
digital users from harm). MEITY mentioned that the purported threat
of AI replacing jobs is not imminent because present-day systems
are task-oriented, are not sophisticated enough and do not have
human reasoning and logic8.
Regulatory Position on AI in the European Union and the United
States
The European Union: In April 2021, the European
Commission proposed the first European Union (“EU”)
regulatory framework for artificial intelligence9
(“AI Act“).
The AI Act defines an “artificial intelligence system (AI
system)” as a “machine-based system that is designed
to operate with varying levels of autonomy and that can, for
explicit or implicit objectives, generate outputs such as
predictions, recommendations, or decisions that influence physical
or virtual environments“10. The AI Act would
regulate all automated technology. It defines AI systems to include
a wide range of automated decision-makers, such as algorithms,
machine learning tools, and logic tools.
This is the first comprehensive regulatory framework for
regulating AI and is part of the EU’s strategy to set worldwide
standards for technology regulation. Recently, on June 14, 2023,
the European Parliament approved its negotiating position on the
proposed AI Act between the representatives of the European
Parliament, the Council of the European Union and the European
Commission for the final shape of the law. The aim is to reach an
agreement by the end of this year11. The second half of
2024 is the earliest time the regulation could become applicable to
operators with the standards ready and the first conformity
assessments carried out12.
The AI Act aims to ensure that AI systems used in the EU market
are safe and respect existing laws on fundamental rights and EU
values. The AI Act proposes a risk-based approach to guide the use
of AI in both the private and public sectors. The AI Act defines
three risk categories: unacceptable risk applications, high-risk
applications, and applications not explicitly banned. The
regulation prohibits the use of AI in critical services that could
threaten livelihoods or encourage destructive behaviour but allows
the technology to be used in other sensitive sectors, such as
health, with maximum safety and efficacy checks. The AI Act would
apply primarily to providers of AI systems established within the
EU or in a third country placing AI systems on the EU market or
putting them into service in the EU, as well as to users of AI
systems located in the EU.
The United States: As per press reports, in a
meeting with President Biden at the White House, seven leading
artificial intelligence companies including Google, Meta, OpenAI
and Microsoft agreed to a series of voluntary safeguards
that are designed to help manage the societal risks of AI and
resultant emerging technology. The measures, which include
independent security testing and public reporting of capabilities,
were prompted by some experts’ recent warnings about A.I. The
U.S. is at the commencement of what is expected to be only the
beginning of a long and difficult path toward the creation of rules
to govern an industry that is advancing faster than lawmakers typically
operate.
Conclusion
AI is growing at a fast pace and is rapidly being integrated
into society. There is therefore definitely a need to regulate AI
to prevent system and societal risks. There are several challenges
in regulating AI, making the task seem impossible to achieve.
Traditionally as well, the law has not been able to keep up with
new technologies. However, if the regulators work at understanding
the technology involved in AI and the system and societal
considerations, comprehensive and effective legislation on AI may
be created. India may also draw inspiration from the legislation in
the EU in this regard. Legislation has thus a key role to play in
ensuring effective and fair implementation of AI in society and
technology.
Footnotes
1. Approach Document Page 6.
2. Approach Document Page 7.
3. Approach Document Page 7.
4. Approach Document Page 8.
5. Approach Document Page 9.
6. Approach Document Page 9
7. https://www.sebi.gov.in/legal/circulars/jan-2019/reporting-for-artificial-intelligence-ai-and-machine-learning-ml-applications-and-systems-offered-and-used-by-market-infrastructure-institutions-miis-_41927.html
8. https://www.livemint.com/ai/artificial-intelligence/india-will-regulate-ai-to-ensure-user-protection-11686318485631.html
9. https://www.europarl.europa.eu/news/en/headlines/society/20230601STO93804/eu-ai-act-first-regulation-on-artificial-intelligence
.
10. Art. 3 No. 1 of the AI
Act.
11. https://digital-strategy.ec.europa.eu/en/policies/regulatory-framework-ai
12. https://www.europarl.europa.eu/news/en/headlines/society/20230601STO93804/eu-ai-act-first-regulation-on-artificial-intelligence
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