European AI Act – How will this regulation affect SMEs?

  • On 19 May 2021, DIGITAL SME held a workshop titled “European AI Act- How will this regulation affect SMEs?” for members of the Focus Group on Artificial Intelligence (AI) and other invited stakeholders.

  • Mr. Martin Ulbrich, Policy Officer at the European Commission’s Directorate-General for Communications Networks, Content and Technology, explained the consequences of the European AI Act for AI-driven SMEs.

  • The proposed AI Act, which still has to be voted in the European Parliament and the Council of the EU before becoming law, proposes strict rules for “high risk AI”.

On 19 May 2021, DIGITAL SME held a workshop titled “European AI Act – How will this regulation affect SMEs?” for members of the Focus Group AI. Participants discussed the potential consequences for SMEs of the European AI Act, a proposal for a EU-wide regulation on AI published by the European Commission last April.

The workshop aimed to provide AI-developing SMEs with direct feedback to their questions: How will this regulation affect SMEs? What are “high risk technologies”? What should SMEs do to comply with the new regulation?

The European AI Act aims to provide a legal framework for AI that considers different risk-levels of AI-technologies for different areas. For instance, mass surveillance AI-techniques will be banned, while AI in medical devices will be considered “high risk” and therefore undergo specific conformity checks.

Martin Ulbrich, Policy Officer at the European Commission, presented the Act to an audience of AI-developing SMES to help them understand the content and the objectives of this regulation. Participants were also able to ask questions about the proposal and bring their critical feedback to the attention of the European Commission.

(Rewatch the event)

Potential pitfalls of the AI Act

Compliance costs have a strong impact on SMEs. According to impact assessments carried out by the European Commission, those costs are however estimated to range between 6000 to 7000 EUR, while the average cost of purchasing an AI system was estimated at 170,000 EUR[1]. The proposal foresees the creation of so-called “sandboxes” which are set up by national authorities and provide a favorable environment to test new innovative solutions. Concerning military uses of AI, Mr. Ulbrich explained that the European AI Act does not affect regulation in this field as the European Union is mainly responsible for civil legislation.

Another point of discussion raised by participants was the definition of AI and the difference between AI and software. As participants argued, some of the prohibited uses such as surveillance could also be carried out with software that would not fall under the current AI definitions. Therefore, the scope of the regulation and definitions should be further refined.

DIGITAL SME would like to thank Mr Ulbrich for his presentation and all participants for sharing their feedback and questions. We will continue bringing together stakeholders to discuss digital legislation in the field of AI and beyond to make sure it is fit for SMEs.

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[1] See the Impact Assessment Document Accompanying the Proposal for a Regulation of the European Parliament and of the Council LAYING DOWN HARMONISED RULES ON ARTIFICIAL INTELLIGENCE (ARTIFICIAL INTELLIGENCE ACT) AND AMENDING CERTAIN UNION LEGISLATIVE ACTS by the European Commission, p67