Artificial Intelligence and Algorithms in Contract Development: New FTC Guidance and European Commission Regulations

Description

AI and related algorithms can improve contract drafting efficiency, making counsel more competitive by shrinking the knowledge gap across years and silos, providing lawyers with proactive rather than reactive tools.

The FTC issued guidance earlier this year due to many cases alleging violations of FTC regulations regarding AI and automated decision-making. The FTC emphasized the importance of ensuring data sets are representative of the population, testing outcomes to avoid bias and unfair discrimination, and being transparent about what an algorithm can and cannot do with business customers and consumers.

Likewise, the EC has proposed expansive regulation and global AI standards, including the establishment of a European Artificial Intelligence Board to oversee regulatory implementation. The EC's proposed AI Regulation bans certain practices that create an unacceptable risk; outlines strict safeguards for "high-risk" AI systems (outlined in Annex III in the Annexes to the Proposal); places lesser restrictions on and creates voluntary "codes of conduct" for "limited-risk" AI systems; and includes weighty fines for violations (noncompliance at up to 30 million euros or six percent of worldwide turnover, whichever is greater).

Listen as our expert panel discusses the status of contract development using AI and algorithms, current FTC guidance, and the state of proposed EC regulations on future use.