Navigating the Landscape of AI Governance: What to Expect from Regulatory Enforcement

As artificial intelligence (AI) continues to transform industries and reshape the business landscape, the need for robust governance frameworks becomes increasingly critical. Governments and regulatory bodies worldwide are stepping up efforts to ensure that AI technologies are deployed ethically, transparently, and securely.  

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Truyo President Dan Clarke says, “We are all watching enforcement closely not only for timing, but for where authorities will focus. There is a clustering of regulations, with bodies like the FTC leveraging existing laws prohibiting discrimination and unfair advertising, while government privacy organizations in the EU and the states look toward new special purpose laws. Unfortunately, this will create a patchwork adding difficulty to genuine compliance efforts, which I think will come faster and more aggressively than even privacy predecessors. We all need to pay attention closely.” 

This blog explores the anticipated regulatory enforcement of AI governance as laws begin to pass, highlighting key mechanisms and agencies involved in this oversight. 

 Key Enforcement Mechanisms and Agencies 

AI governance will be enforced through a variety of regulatory bodies and mechanisms, reflecting the multifaceted impact of AI across different sectors and regions. Here’s a closer look at the expected landscape: 

EU AI Law and GDPR Enforcement 

• The European Union’s AI regulations are expected to mirror the enforcement mechanisms of the General Data Protection Regulation (GDPR). This means stringent compliance requirements and substantial penalties for non-compliance, overseen by data protection authorities across member states. 

Automated Decision-Making Tools (ADMT) and the CPPA 

• In California, the California Privacy Protection Agency (CPPA) will be responsible for enforcing rules related to automated decision-making tools. This enforcement will likely focus on ensuring transparency, fairness, and accountability in the use of AI-driven decisions. 

Federal Trade Commission (FTC) Enforcement 

• The FTC will utilize its traditional enforcement mechanisms to oversee AI practices, particularly those involving consumer protection and unfair or deceptive practices. This includes scrutinizing AI-related business practices and ensuring compliance with existing consumer protection laws. 

State Attorneys General (AGs) in Colorado and Other States 

• In Colorado and other states that follow its lead, enforcement of AI regulations will be carried out by state attorneys general. These AGs will play a pivotal role in investigating and prosecuting violations of AI governance laws within their jurisdictions. 

State-Specific Rules for Employment and Insurance 

• States will introduce specific regulations addressing the use of AI in employment and insurance sectors. These rules will focus on preventing discrimination and ensuring fair treatment of individuals in AI-driven processes such as hiring and underwriting. 

Overselling of AI: State and Federal Enforcement 

• Both state and federal authorities, including the Securities and Exchange Commission (SEC) and the FTC, will crack down on the overselling or misrepresentation of AI capabilities. This enforcement aims to prevent deceptive marketing practices and protect consumers and investors from inflated claims about AI technologies.

Private Right of Action (PRA) and Limited Scope 

• Proposed laws like the American Privacy and Data Protection Act (APRA) include limited private rights of action. This means individuals may have restricted ability to sue for violations, with enforcement primarily left to regulatory bodies. 

Title VII Plaintiff Actions on Bias and Discrimination 

• Under Title VII of the Civil Rights Act, individuals will be able to bring lawsuits focusing on bias and discrimination in AI systems, particularly in employment contexts. These actions will scrutinize AI algorithms and their impact on protected classes.

Cyber Regulators on AI-Related Cyber Risks 

• Both state and federal cyber regulators are increasingly concerned with how AI adoption may heighten cybersecurity risks. Regulatory efforts will focus on ensuring that AI systems are secure and resilient against cyber threats. 

As AI technologies continue to evolve, the regulatory landscape is becoming more defined and stringent. Enforcement of AI governance will involve a coordinated effort across various federal and state agencies, each focusing on specific aspects of AI use and its implications. From preventing discrimination and ensuring transparency to protecting consumer rights and mitigating cyber risks, regulatory bodies are gearing up to oversee the ethical and responsible deployment of AI. As laws pass and enforcement mechanisms are established, businesses must stay informed and compliant to navigate this complex regulatory environment successfully.