German Recommendations for AI Regulation Will Have a Chilling Effect on AI Adoption

October 23, 2019

BRUSSELS —In response to the recommendations on artificial intelligence published today by the German Data Ethics Commission, the Center for Data Innovation released the following statement from Senior Policy Analyst Eline Chivot. 

The German Data Ethics Commission’s recommendations on AI send a worrying signal to businesses that they risk adopting AI at their own peril. Businesses are already subject to the often stringent rules and impractical requirements set by the GDPR, and adding another layer of regulation for how companies use automated systems will have a chilling effect on AI adoption in the EU. The German recommendations, particularly calls for economy-wide rules on AI rather than industry-specific ones, are yet another cue that policymakers intend to treat firms using AI as a liability rather than an asset. Despite warnings from the European Commission's high-level expert group on AI to avoid rushing through with counterproductive and unnecessary AI regulation, Germany appears willing to impose more demands on how companies use AI.

Europe wants to be more competitive in the digital economy. But it cannot substitute regulation for innovation. Rather than trying to achieve competitiveness in AI through policies designed to disadvantage foreign providers and promote European digital sovereignty, European policymakers should instead focus on developing an AI strategy that invests in people, data, and digital infrastructure, and creates a more innovation-friendly regulatory environment, so that European firms can better compete with China and the United States.

If Germany's guidelines were to inspire the EU's forthcoming AI legislation, the EU will indeed manage to set a global standard—a blueprint on what to do to fail in the digital economy. And if Germany attempts to act on these policy recommendations alone, it will undermine its goals of both remaining a leader in Industry 4.0 and promoting a digital single market across the EU.