Data Protection and Privacy
Data Protection, privacy and technology developments continued to dominate the headlines last year. In this briefing, we consider some of the most noteworthy developments of which organisations should be aware, and look at what is coming down the tracks in 2023.
The importance of fair, transparent and lawful processing has been in the spotlight as the Irish Data Protection Commission ("DPC") recently imposed three significant fines on a leading technology company for unlawful reliance on contractual necessity as a lawful basis for certain processing activities. International transfers continues to be a hot topic, as the EU Parliament, EDPB and a Committee of EU Member States review the draft EU-US Data Privacy Framework ("DPF").
In addition, the extent and scope of the right to compensation for non-material damage under Article 82 GDPR has been subject to scrutiny as a number of national court decisions concerning this matter are filtering up to the Court of Justice of the European Union ("CJEU"). All of these matters are considered in more detail in this commentary.
We also consider the CJEU decision in the case of X-Fab (Case C-453/21) which provides guidance on how to determine whether a conflict of interest could arise for an organisation's Data Protection Officer. In addition, the European Data Protection Board ("EDPB") has finalised a number of Guidelines to assist organisations to comply with their GDPR obligations including, amongst others, Guidelines on what constitutes an international transfer of data under Chapter V GDPR, and Guidelines on deceptive design patterns in social media platform interfaces.
Legislation surrounding data protection, privacy and technology continues to develop at a rapid pace. These technologies and developments present new challenges for companies and consumers alike. As a result, 2023 will undoubtedly be an exciting and busy year for all.
Three Top Trends for AI in 2023
This year's World Economic Forum meeting at Davos applauded the growth in artificial intelligence, particularly Generative AI. Against the backdrop of the world's biggest challenges, reports from Davos suggest world leaders and business executives are cautiously optimistic for 2023. Investment decisions appear to point to digital transformation projects – "investing in AI, with care"1.
From an AI perspective, AI stocks suffered in 2022 as economies dealt with the challenges of soaring inflation, rate hikes, fears of recession and layoffs2. Reuters reported3 that "business are under enormous cost pressure. They need to find ways to do the same things cheaper". John Clancy from the Enterprise Digital Advisory Forum was reported in the SiliconRepublic.com describing AI as the "new fuel for the modern economy"4. The Enterprise Digital Advisory Forum advises and works with the Irish Government to drive industry adoption of AI and other digital technologies.
Spending by governments and business on AI technology is expected to top $500 billion worldwide in 2023, according to IDC research5 (International Data Corporation).
There is a lot to be said about the next wave of AI products and services. More options are becoming available, including low-code and no-code options. This is also when the market is continuing to see competition around data, Web3, NFTs, the 'Metaverse', natural language processing, quantum computing, cyber resilience tools, and much more.
At a glance, key trends to watch out for in 2023 include the following.
1. New Deals / New Demands
Outsourcing and digital transformation deals are expected to help with cutting costs and driving profitability for businesses. While cloud has been the mantra for the last few years now, AI offerings will be also on the table in 2023 for both front and back-office operations. We are also expecting greater complexity (e.g. multiple parties combined with a wider set of tech tools and collaboration.) and a push for closing negotiations even faster. In anticipation of these deals, we would expect many tech companies to revisit their contract templates and negotiation processes and stress-test them in light of the shifting bargaining positions and increased competition.
2. New Tech
AI is becoming people's 'co-pilot for creativity'6, as reported by one major tech company in their 2023 forecast. With generative AI (think ChatGPT, MidJourney and DALL-E) and further advances in existing AI tools, the phrase "This content is brought to you by AI" might become even more commonplace. Generative AI may be used for inventions, images and text, deep fakes, voice cloning, which will each create their own legal challenges. On 17 January 2023, Getty Images was reported to be suing an AI image generator, Stability AI, for alleged copyright infringement7. It is claimed that Stability AI unlawfully copied millions of copyright-protected images to train its popular AI art tool 'Stable Diffusion', without seeking a licence. Stable Diffusion is a deep learning, text-to-image model released in 2022. This and various legal actions in other jurisdictions are pointing to a trend of increased litigation and eventually judicial intervention in this space. In addition to this, we expect to see more developments in natural language processing, cybersecurity, AI used in the personalisation of customer experiences, AI and the Metaverse, and use of AI in medicine, climate adaption, data insight analysis, food and materials.
3. New Legal Developments - AI Regulation and Standards
- The main regulation to watch for in 2023 is the EU Artificial Intelligence Act, which, if enacted, would be the first ever legal framework governing AI. In Ireland, the National AI Strategy is also moving towards finalisation. Provisionally titled “AI – Here for Good”, it aims to provide a harmonised, high-level direction to the development, deployment and governance of AI in Ireland. The EU Artificial Intelligence Act was published by the European Commission on 21 April 2021, with amendments proposed in December 2022 by the Council of the EU.
- The EU recently published the AI Liability Directive which sets down uniform rules for certain areas of non-contractual civil liability for damage caused where AI systems are involved. The AI Liability Directive is currently at the First Reading stage before the European Council.
- The conversation will continue on Responsible AI, Explainable AI (used to describe an AI model, its expected impact and potential biases, it helps characterize model accuracy, fairness, transparency and outcomes) and "trust in tech". New AI-specific standards are in the pipeline8. There is an interest for AI stakeholders in seeing industry specific standards in force, that will help companies meet their AI-specific legal obligations without much adjustment to their existing compliance functions.
For more information, please contact Rory O'Keeffe, Thomas Condon or your usual Technology and Innovation Group contact.
1;Source YouTube:
3https://www.reuters.com/business/davos-2023-key-takeaways-world-economic-forum-2023-01-20/
4https://www.siliconrepublic.com/machines/ai-predictions-tech-trends-2023
5https://www.idc.com/getdoc.jsp?containerId=IDC_P37251
6https://www.accenture.com/se-en/insights/song/accenture-life-trends?c=acn_glb_lifetrends2023linkedin_13383791&n=smc_0123&abc=life+trends+2023_linkedin_100003742235670&linkId=100000180243957
7https://www.siliconrepublic.com/machines/getty-images-suing-stability-ai-generated-images
8UK: https://aistandardshub.org; IEEE Standards Association: https://sagroups.ieee.org/ai-sc/