The limits of state AI legislation

Article by Derek Robertson: “When it comes to regulating artificial intelligence, the action right now is in the states, not Washington.

State legislatures are often, like their counterparts in Europe, contrasted favorably with Congress — willing to take action where their politically paralyzed federal counterpart can’t, or won’t. Right now, every state except Alabama and Wyoming is considering some kind of AI legislation.

But simply acting doesn’t guarantee the best outcome. And today, two consumer advocates warn in POLITICO Magazine that most, if not all, state laws are overlooking crucial loopholes that could shield companies from liability when it comes to harm caused by AI decisions — or from simply being forced to disclose when it’s used in the first place.

Grace Gedye, an AI-focused policy analyst at Consumer Reports, and Matt Scherer, senior policy counsel at the Center for Democracy & Technology, write in an op-ed that while the use of AI systems by employers is screaming out for regulation, many of the efforts in the states are ineffectual at best.

Under the most important state laws now in consideration, they write, “Job applicants, patients, renters and consumers would still have a hard time finding out if discriminatory or error-prone AI was used to help make life-altering decisions about them.”

Transparency around how and when AI systems are deployed — whether in the public or private sector — is a key concern of the growing industry’s watchdogs. The Netherlands’ tax authority infamously immiserated tens of thousands of families by accusing them falsely of child care benefits fraud after an algorithm used to detect it went awry…

One issue: a series of jargon-filled loopholes in many bill texts that says the laws only cover systems “specifically developed” to be “controlling” or “substantial” factors in decision-making.

“Cutting through the jargon, this would mean that companies could completely evade the law simply by putting fine print at the bottom of their technical documentation or marketing materials saying that their product wasn’t designed to be the main reason for a decision and should only be used under human supervision,” they explain…(More)”