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Italy’s ban on ChatGPT sets a worrying precedent for EU startups

OpenAI’s ChatGPT, which took the world by storm after its November launch, is now facing a temporary ban in Italy for “unlawful” collection of personal data and the lack of an age verification system for children.

Italy’s data protection agency, known as Garante, was urged to act ChatGPT’s data breach on March 20which, according to OpenAI, allowed some users to see other users’ information, such as their first and last name, email address, and the last four digits of their credit card number.

Garante accused the US-based AI company of having “no legal basis” that justifies “the massive collection and processing of personal data” it needs to “train the algorithms on which the platform relies”. It also added that the lack of an age-verification mechanism exposes children to “inappropriate” responses.

As a result, the Italian regulator opened an investigation into OpenAI on Friday and temporarily blocked access to GhatGPT in the country.

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In response, OpenAI CEO Sam Altam tweeted that GhatGPT has discontinued its services in Italy, but stated that he did not believe the company had violated any privacy laws.

Open AI has 16 days to respond with appropriate security measures or face a fine of up to €20 million or 4% of its total global annual turnover.

Increasing concerns

ChatGPT’s exciting capabilities are fueling growing concerns about the exponential advancement of generative AI.

At the end of March, the European Consumer Organization (BEUC) called for EU and national authorities to investigate OpenAI’s system.

“Despite all the benefits that AI can bring to our society, we are currently not sufficiently protected against the harm it can inflict on humans,” said Ursula Pachl, deputy director general of BEUC, in a statement. rack.

The organization fears that until the union’s AI law comes into effect, consumers risk being harmed by a technology that is not adequately regulated and for which they are not prepared.

Across the Atlantic Ocean, a open letter signed by AI experts and industry executives called for AI labs to immediately halt training of systems more powerful than ChatGPT’s successor GPT-4 for at least six months.

The signatories – including DeepMind researchers, computer scientist Yoshua Bengio and Elon Musk – emphasized the need for regulatory policies, emphasizing that “powerful AI systems should not be developed until we are confident that their effects will be positive and their risks manageable. are. .”

Opposition in the tech industry

Italy’s regulator’s decision to suspend access to ChatGPT could lead to a loss of economic opportunity in the country, says Daniele Servadei, founder of the Bologna-based SaaS e-commerce startup Sellixtold TNW.

“It restricts the development and growth of the AI ​​and technology sectors, preventing local companies from leveraging the technology,” he said.

Servadei further noted that the ban could have “a chilling effect” on AI development in Italy and abroad, “as developers and investors may fear future bans or restrictions on their products, which would hinder innovation and investment in the sector.” can hinder.”

Simone Basso, Chief Product and Technology Officer at the travel company in Milan WeGonealso highlighted the potential negative impact on local businesses.

“ChatGPT has improved the productivity of teams at WeRoad and globally, but recent decisions in Italy – from banning synthetic meat research to holding back the rollout of 5G – have hampered the country’s technology, innovation and productivity growth,” he said. Basson to Applied Sciences.

Basson added that while consumers can get around Garante’s restrictions using a VPN, companies with solutions based on such technologies “have uncertainty” and will be forced to prioritize other markets.

Is Italy setting a precedent for Europe?

While ChatGPT was already unavailable in mainland China, Hong Kong, Iran, Russia and parts of Africa, Italy is the first Western country to take action against the AI ​​system.

Germany could soon follow Italy’s lead, said Ulrich Kelber, Germany’s data protection commissioner Handelsblatt.

Meanwhile, authorities in France and Ireland are in contact with the Italian regulator, Reuters reports.

“We are contacting the Italian regulator,” said a spokesman for Ireland’s data protection commissioner. “We will coordinate with all EU data protection authorities on this matter.”

The regulators’ concerns about ChatGPT – along with its popularity, as the fastest growing consumer app in history — underline the need for coordinated and transparent EU policies regulating the use and development of large language models.

It is still unclear how ChatGPT and similar models will be affected by the EU’s forthcoming AI law, which aims to strike a tricky balance between security and innovation.


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