EU AI law could stifle innovation

With the success of artificial intelligence, the question of regulation is also becoming more and more present. But what consequences could an AI law have in the EU? A new report warns of too much bureaucracy.

Just a few days ago, the European Parliament passed the first law for artificial intelligence. This means that certain regulations will apply to the use of AI in the European Union in the future.

Among other things, there will be certain requirements for facial recognition using AI software or for AI systems such as ChatGPT. A large part of this new law is the labeling requirement for content created by AI.

The main aim of this is to prevent misleading people through the use of AI. But the consulting firm Copenhagen Economics sees more than just advantages in regulating artificial intelligence.

What is the status of the AI ​​market in the EU?

There are currently no “immediate competition concerns” in the AI ​​scene in Europe, as the report shows. Quite the opposite: The scene is currently very competitive and is growing continuously. There are currently no obstacles to market entry in the EU.

The market situation is such that regulatory intervention is currently not justified. The CCIA Europe association, which commissioned the white paper, therefore does not see it as necessary to “expand the regulatory framework for AI to new levels”. Accordingly, it is sufficient to cover competition concerns with existing laws.

“This new study shows that the European market for generative AI is very dynamic and that the concerns raised by some competition authorities are not borne out by market trends,” explains Aleksandra Zuchowska, Head of Competition Policy at CCIA Europe.

Allowing competition to flourish in the AI ​​market is more beneficial for European consumers than hasty additional regulation, which would only stifle innovation and hinder new entrants.

What are the risks of regulation through an AI law in the EU?

According to Zuchowska, the effects of new AI-specific regulations must be “closely monitored”. This also includes the recently passed EU AI law.

It must be avoided that the development of innovations in the field of artificial intelligence is “overburdened by disproportionate compliance costs and unnecessary bureaucracy”.

The CCIA considers regulatory intervention to be too premature due to the current market situation. These could slow down innovation and growth. And consumer choice could also suffer.

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