Business Updates: Strict Rules for Artificial Intelligence in E.U.

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LiveUpdated April 21, 2021, 7:40 a.m. ETApril 21, 2021, 7:40 a.m. ET
“The E.U. is spearheading the development of new global norms to make sure A.I. can be trusted,” said Margrethe Vestager, the European Commission executive vice president who oversees digital policy.Credit…Yves Herman/Reuters

The European Union on Wednesday unveiled strict regulations to govern the use of artificial intelligence, a first-of-its-kind policy that outlines how companies and governments can use a technology seen as one of the most significant, but ethically fraught, scientific breakthroughs in recent memory.

Presented at a news briefing in Brussels, the draft rules would set limits around the use of artificial intelligence in a range of activities, from self-driving cars to hiring decisions, school enrollment selections and the scoring of exams. It would also cover the use of artificial intelligence by law enforcement and court systems — areas considered “high risk” because they could threaten people’s safety or fundamental rights.

Some uses would be banned altogether, including live facial recognition in public spaces, though there would be some exemptions for national security and other purposes.

The rules have far-reaching implications for major technology companies including Amazon, Google, Facebook and Microsoft that have poured resources into developing artificial intelligence, but also scores of other companies that use the technology in health care, insurance and finance. Governments have used versions of the technology in criminal justice and allocating public services.

Companies that violate the new regulations, which are expected to take several years to debate and implement, could face fines of up to 6 percent of global sales.

Artificial intelligence — where machines are trained to learn how to perform jobs on their own by studying huge volumes of data — is seen by technologists, business leaders and government officials as one of the world’s most transformative technologies.

But as the systems become more sophisticated it can be harder to determine why the technology is making a decision, a problem that could get worse as computers become more powerful. Researchers have raised ethical questions about its use, suggesting that it could perpetuate existing biases in society, invade privacy, or result in more jobs being automated.

“On artificial intelligence, trust is a must, not a nice to have,” Margrethe Vestager, the European Commission executive vice president who oversees digital policy for the 27-nation bloc, said in a statement. “With these landmark rules, the E.U. is spearheading the development of new global norms to make sure A.I. can be trusted.”

In introducing the draft rules, the European Union is attempting to further establish itself as the world’s most aggressive watchdog of the technology industry. The bloc has already enacted the world’s most far-reaching data-privacy regulations, and is also debating additional antitrust and content-moderation laws.

In Washington, the risks of artificial intelligence are also being considered. This week, the Federal Trade Commission warned against the sale of artificial intelligence systems that use racially-biased algorithms, or ones that could “deny people employment, housing, credit, insurance, or other benefits.”

The company that began as Krystle Mobayeni's side project, BentoBox, scaled up significantly in the pandemic to help restaurants.
The company that began as Krystle Mobayeni’s side project, BentoBox, scaled up significantly in the pandemic to help restaurants.Credit…Gili Benita for The New York Times

The past year has crushed independent restaurants across the country and brought a reality to their doors: Many were unprepared for a digital world.

Unlike other small retailers, restaurateurs could keep the tech low, with basic websites and maybe Instagram accounts with tantalizing, well-lit photos of their food. It meant businesses like BentoBox, which aims to help restaurants build more robust websites with e-commerce abilities, were a hard sell, Amy Haimerl reports for The New York Times.

For many, BentoBox’s services were a “nice to have,” not a necessity, the company’s founder, Krystle Mobayeni, said.

But the pandemic sent chefs and owners flocking to the firm as they suddenly needed to add to-go ordering, delivery scheduling, gift card sales and more to their websites. Before the pandemic the company, based in New York City, had about 4,800 clients, including the high-profile Manhattan restaurant Gramercy Tavern; today it has more than 7,000 restaurants on board and recently received a $28.8 million investment led by Goldman Sachs.

The moment opened a well of opportunity for other companies like it. Dozens of firms have either started or scaled up sharply as they found their services in urgent demand. Meanwhile, investors and venture capitalists have been sourcing deals in the “restaurant tech” sector — particularly seeking companies that bring the big chains’ advantages to independent restaurants.

A growing number of retirees and those approaching retirement are in debt.

The share of households headed by someone 55 or older with debt — from credit cards, mortgages, medical bills and student loans — increased to 68.4 percent in 2019, from 53.8 percent in 1992, according to the Employee Benefit Research Institute. A survey at the end of 2020 by Clever, an online real estate service, found that on average, retirees had doubled their nonmortgage debt in 2020 — to $19,200.

Susan B. Garland reports for The New York Times on what to do if you’re in this position:

  • Consult a nonprofit credit counseling agency, which will review a client’s expenses and income sources and create a custom action plan. The initial budgeting session is often free, said Bruce McClary, senior vice president for communications at the National Foundation for Credit Counseling. An action plan could include cutting unnecessary spending, such as selling a rarely used car and banking some proceeds for taxi fare.

  • Tap into senior-oriented government benefits, such as property tax relief, utility assistance and Medicare premium subsidies. The National Council on Aging operates a clearinghouse website for them, BenefitsCheckUp.org. “The average individual 65-plus on a fixed income is leaving $7,000 annually on the table” in unused benefits, said Ramsey Alwin, the council’s president.

  • Avoid using high-interest credit cards to fill income gaps. Medical bills typically charge little or no interest but turn into high-interest costs if placed on credit cards, said Melinda Opperman, president of Credit.org. Instead, she said, patients should call hospitals or other providers directly to work out an arrangement.

  • Avoid taking out home-equity loans or lines of credit to pay off credit cards or medical bills, said Rose Perkins, quality assurance manager for CCCSMD, a credit counseling service. Though tapping home equity carries a lower interest rate than a credit card, a homeowner could put a home at risk if a job loss, the death of a spouse or illness made it difficult to pay off the lender, she said.

Fans of Chelsea Football Club were among many who protested the European soccer Super League before it unraveled Tuesday. The share price of publicly traded teams tumbled.
Fans of Chelsea Football Club were among many who protested the European soccer Super League before it unraveled Tuesday. The share price of publicly traded teams tumbled.Credit…Neil Hall/EPA, via Shutterstock

European stocks rose slightly on Wednesday, reversing some of the previous day’s drop, while U.S. stock futures indicated the S&P 500 would open lower. The sentiment in stock markets this week has shifted away from the optimism that recently set record highs amid growing concerns about coronavirus variants that are leading to new outbreaks.

The Stoxx Europe 600 index rose 0.3 percent after plunging 1.9 percent on Tuesday. That was the biggest one-day decline since December. The S&P 500 fell 0.7 percent on Tuesday.

Oil prices fell, with futures on West Texas Intermediate, the U.S. benchmark, declining 1.2 percent to just below $62 a barrel.

  • Netflix shares dropped nearly 8 percent in premarket trading after its latest earnings report. For the first quarter of 2021, Netflix said it added four million new customers, less than the six million it had forecast. It’s another sign that, although Netflix still dominates streaming, its rivals are starting to catch up.

  • As plans for a European Super League for soccer rapidly fell apart on Tuesday, shares in publicly traded football clubs that had joined the group dropped. Manchester United shares fell in premarket trading in New York, extending a 6 percent drop from the previous day. Shares in Juventus, an Italian club, plummeted nearly 13 percent.

  • Inflation in Britain rose less in March than economists predicted. The annual rate of price increases was 0.7 percent, data published Wednesday showed, up from 0.4 percent in February. The jump is notable, but it is less than the 0.8 percent analysts had predicted. As in the United States, policymakers and economists expect some of the increase to be temporary and explained by transitionary factors such as the steep drop in oil prices this time last year. Therefore, bets are that the central bank won’t reduce its monetary stimulus yet.

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