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AI on ESG

Law as a guarantee in the face of the challenges posed by artificial intelligence

By Javier Fontcuberta
Managing Director of Cuatrecasas

Every company should be aware of the regulatory framework governing the use of AI systems. Both the rules created specifically to regulate AI and other pre-existing rules should shape the agenda that each organization sets to ensure responsible use of this technology.

Few technologies have evolved as rapidly as artificial intelligence ("AI") systems. We are currently experiencing an AI effervescence, perhaps comparable to that experienced at the time with the universalization of the personal computer, access to the Internet, or intelligent mobile devices.

Primary school students, public and private institutions, organizations of all kinds, citizens and society in general. All of us, without exception, are immersed in a process of integrating AI tools into our daily work. The goal: to perform our tasks in a different, much more efficient and faster way. This technology is (or will soon be) in a position to generate fully automated customer service systems, establish automatic credit qualification systems, generate audiovisual content with a perfect recreation of people, diagnose patients quickly and reliably, or even increase levels of public safety with automated systems for identifying and tracking suspicious persons.

Law is called upon to play a key role in establishing the rules that define the development and use of these new tools, assuming a position of guarantor for the strictest respect for the rights and freedoms of individuals.

The European Union has decided to take a step forward in this direction and has become the first regional player to articulate a legal framework to regulate this matter. Unlike such important countries as the United States, which, in keeping with its more liberal tradition, seems to be opting for an eminently self-regulatory approach, the European Union is finalizing the drafting of a regulation known as the AI Act. This regulation, expected to be approved in the coming weeks, is aimed at protecting citizens from the risks associated with this technology, while duly guaranteeing their rights and freedoms. At the same time, it establishes the regulatory framework within the perimeter of which companies and other entities operating in the market will have to act.

Under European regulations, both the providers of this technology and its distributors and users must ensure compliance with a series of obligations according to the degree of risk of the AI system in question. Likewise, the new European regulation makes transparency one of its main bastions, ensuring, for example, that systems that generate or manipulate image, text, sound or video content that may raise doubts about their originality must be identified as having been created by means of an AI tool.

It should be noted, however, that the entry into force of the IA Act will not entail an all-encompassing regulation of this matter. The IA Act will coexist with rules that have preceded it and that deal, in some way, with this matter. Let's think, for example, of the General Data Protection Regulation. Despite having been approved in 2016, it already included a specific regulation for automated decision making, directly affecting processes based on AI systems. It is not expected, for the time being, that the AI Act will lead to the repeal of this regulation.

Furthermore, it should be emphasized that the impact of this new regulation is not limited to its own discipline. The establishment of pricing systems that take into account market fluctuations, particularly relevant in e-commerce environments, will have to ensure strict compliance with antitrust regulations. Similarly, any use of AI technology in the audiovisual sector must be respectful, for example, of copyright regulations.

Another major area in which the law will play an essential role in the implementation of this type of technology is labor relations. Employers' ability to evaluate and monitor their employees by means of AI tools will have to take into account the regulations derived from labor law, which will become a central pillar for defining the rules of the game in this area.

Although criticized on many occasions, regulation seems to have become on this occasion (once again) the foundation on which the guarantee of people's rights is based. All that remains now is for the legislator to get it right and establish an appropriate regulatory framework that, while ensuring full respect for the aforementioned rights, does not jeopardize technical development and progress in a Europe in need of support for adequate competitive positioning.  

Javier Fontcuberta, Cuatrecasas Managing Director

Degree in Law from the University de Barcelona, Master's Degree in Corporate Legal Consultancy from IE Business School School and Doctorate cum laude in Law from the University Ramon Llull University of Barcelona, he is an expert in commercial contracts, about alland mergers and acquisitions and corporate governance. He has managed complex and multidisciplinary international projects, planning, defining and executing the legal strategy. In December 2022, he assumed the general management of Cuatrecasas, leading the Firm's new strategic plan, as well as its sustainable transition process.