According to industry analysts, the GDPR may cause serious problems for businesses, including higher AI costs, practical limitations, and legal risks.
CE Pro Editors · May 22, 2018
In a recent article by CE Pro’s sister publication, Robotics Business Review, the site did a deep-dive into the ramifications of Europe’s General Data Protection Regulation (GDPR) going into effect on May 25th.
While not all of the information is critical for integration companies, some smart home device manufacturers like Nest or Amazon could be in trouble, according to analysts.
The GDPR poses three main problems for smart home businesses that make use of AI:
- Higher costs
- Practical limitations
- Legal risks
Higher costs and legal risks may deter companies from using AI altogether, and the practical limitations set forth in the GDPR may lessen AI’s effectiveness.
According to Nick Wallace, a senior policy analyst at the Center for Data Innovation, “The most important provisions in the GDPR are the rules on algorithm decision making.”
“For example, there is a general right for a person to have a human review and explain algorithmic decisions,” Wallace says, adding that there is “a requirement that will make it more difficult for companies to automate certain processes using AI.”
Similarly, requiring companies to manually review significant algorithmic decisions could raise the overall cost of AI. This makes little sense to Wallace, who says all this does is replace algorithmic decisions with human decisions, which weakens incentives to use AI.
As a result, smart home devices could see a price hike, since it will cost companies more money to review each decision individually, and that cost will be passed on to buyers.
GDPR May Alter AI Accuracy
Rights to algorithmic decisions and GDPR restrictions on the use of personal data could also reduce AI accuracy. “For AI to work requires a ton of data, and the GDPR is about treating personal data with respect,” says Roy Pereira, CEO of Zoom.Ai, an artificial intelligence provider.
“We are going to see a lot of companies change what their strategies around leveraging artificial intelligence technologies.”
To complicate matters further, noncompliance with the GDPR’s complex provisions could result in penalties that make advanced data processing both legally and financially risky.
Pereira believes that due to the GDPR’s privacy rules being so hard to fulfill, many companies will ultimately limit their use of AI.
This isn’t to say that limiting its use spells the end for smart home AI, but if smart home tech companies like Amazon are forced to radically change how they treat user data, there might be a speed bump ahead.
To see Robotic Business Review‘s full article which includes a graph and additional quotes from AI industry leaders, click here.