Members' Research Service By / June 21, 2022

Artificial intelligence act and regulatory sandboxes

While there is no agreed definition, regulatory sandboxes generally refer to regulatory tools allowing businesses to test and experiment with new and innovative products, services or businesses under supervision of a regulator for a limited period of time.

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Written by Tambiama Madiega with Anne Louise Van De Pol.

The artificial intelligence act envisages setting up coordinated AI ‘regulatory sandboxes’ to foster innovation in artificial intelligence (AI) across the EU. A regulatory sandbox is a tool allowing businesses to explore and experiment with new and innovative products, services or businesses under a regulator’s supervision. It provides innovators with incentives to test their innovations in a controlled environment, allows regulators to better understand the technology, and fosters consumer choice in the long run. However, regulatory sandboxes also come with a risk of being misused or abused, and need the appropriate legal framework to succeed.

In April 2021, the European Commission presented a proposal for a regulation laying down harmonised rules on AI (the ‘artificial intelligence act’ or ‘AI act’). Academics and stakeholders have commented on the proposal, touching, in particular, on issues regarding the lack of liability protection for sandbox participants, the need for a more harmonised approach to AI regulatory sandboxes, and the interplay between AI sandbox and EU data protection rules.

The European Parliament has called for introducing regulatory sandbox instruments in several resolutions. Its April 2022 committee draft report on the AI act argued for more transparency on the implementation and use of AI sandboxes.

Read the complete briefing on ‘Artificial intelligence act and regulatory sandboxes‘ in the Think Tank pages of the European Parliament.

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