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    4. Federal agencies announce enforcement tools to address harmful AI bias

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    Federal agencies announce enforcement tools to address harmful AI bias

    April 27, 2023

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    By Daniel Schwartz

    Regulators from four federal agencies announced they intend to tackle harmful AI bias while also reiterating the belief Congress should address these issues.

    While limited legislative and regulatory structures exist governing the development and use of artificial intelligence (AI) technologies, four federal agencies announced on Tuesday that they have the authority to tackle harms caused by AI bias and that they fully intend to use that authority. Regulators from the Consumer Financial Protection Bureau (CFPB), the Department of Justice, the Equal Employment Opportunity Commission, and the Federal Trade Commission (FTC) explained the tools available to take action against companies for any harmful use of AI. Importantly, the agencies also reiterated the belief that Congress should also address these issues.

    Among the exemplary harms identified included housing discrimination resulting in a bias in lending or valuations caused by AI algorithms and unfair business practices such as deceptive marketing. The CFPB Director, Rohit Chopra, said, “There is not an exemption in our nation’s civil rights laws for new technologies and artificial intelligence that engages in unlawful discrimination.” FTC Chair Lina Khan echoed those sentiments, “Each agency here today has legal authorities to readily combat AI-driven harm. Firms should be on notice that systems that bolster fraud or perpetuate unlawful bias can violate the FTC Act. There is no AI exemption to the laws on the books.”

    In addition to bias/discrimination issues, the agencies recognize that large entities may use their vast amounts of data and computing power—collectively, the fuel of AI technologies—to improperly manipulate or limit competition and the development of competing technologies. The agencies noted that FTC and DOJ already have the tools to address these issues and are prepared to do so.

    While the agencies were making these announcements this week, Congress continues to move cautiously in crafting new legislation to address emerging AI technologies. Senate Majority Leader Chuck Schumer (D-NY) announced this month that he is working with a broad spectrum of stakeholders toward developing a framework for AI legislation. Sen. Schumer recognized that China’s recent announcement about regulating AI and the rapid technological developments make it “imperative for the United States to lead and shape the rules governing such a transformative technology and not permit China to lead on innovation or write the rules of the road.”

    Nixon Peabody continues to track developments in AI regulation at the federal, state, and local levels and will continue to provide updates as further developments occur.

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