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The Impact of AI on Privacy

What Is AI?

Artificial intelligence (AI) is the engineering and science of creating intelligent machines that can learn, solve problems, make decisions and even reason in ways that historically, only a human could. AI has revolutionized various industries, including how businesses operate and interact with consumers.

AI technology has an unprecedented ability to collect and analyze vast amounts of data, including personal information such as names, addresses, and consumers’ browsing history. This data is often processed by robust algorithms, which can create profiles that may be used to improve customer experiences, personalize recommendations, and target advertisements. And while AI technology is becoming increasingly commonplace in today’s digital world and is valuable for tailored services, it brings up privacy-related concerns in today’s data-driven economy. This article focuses on the impact of AI on consumer privacy and the steps businesses can take in order to protect their customers’ personal information.

What Are the Main Privacy Concerns with the Use of AI and What Steps Can Businesses Take to Mitigate Them?

Considering the recent advancements and complexities of AI and Machine Learning (ML),innovative companies have been creating and offering AI tools and solutions to the market at staggering speeds. However, this technological advancement also raises concerns about the potential risks to consumer privacy. The use of AI concerns range from dependence on AI to privacy and ethical dilemmas to the security risks associated with the rapid development of AI. Below are some of the things that businesses should pay close attention to when integrating AI technologies.

Purpose Limitation

One of the main concerns with AI is that data can be collected and analyzed for purposes that consumers were not aware of and/or did not consent to. To address this concern, businesses should limit the purposes for their data collection and accurately map the data flow that they collect and process using various AI technologies, in order to provide the necessary level of transparency and disclosures to their customers so that customers could make informed decisions about the collection and processing of their personal information.

Inaccurate, Discriminatory, or Biased Outcome

AI systems possess an unprecedented ability to extract insights from vast datasets, exposing latent patterns with implications that span both commercial advantage and inadvertent privacy intrusion. AI technology is constantly evolving and often, accurate results cannot be guaranteed. This can lead to errors and biased or discriminatory outcomes which can disproportionately affect certain groups of people. As such, organizations must ensure AI algorithms provide human intervention possibilities, transparency, and the right to explanation in automated processes. AI integrations also mean that organizations must continuously assess the risks associated with AI integrations by conducting Privacy Impact Assessments (PIAs) and if applicable, Data Protection Impact Assessments (DPIAs) and update consumer-facing privacy
notices, ensuring that the disclosures align with ethical and legal requirements.

Personalized Experiences and Loss of Anonymity

Another concern is that ML algorithms can be used by AI to analyze and predict a person’s emotional state or patterns, or determine their political views, sexual orientation, ethnic identity, and even health issues or concerns based on the person’s online activity and location for example. While constructing profiles may be valuable for tailored services, this may also infringe upon individual autonomy and privacy. This, together with AI technologies that enable facial recognition and tracking across various devices presents concerns about loss of anonymity, identity theft and financial fraud. Businesses must navigate the delicate balance between the desire to provide personalized experiences while respecting privacy to ensure consumer trust. I join the school of thought that if balanced correctly, and by implementing a “privacy by design” approach, personalization can coexist with privacy.

Security Risks and Best Practices for Data Security

Another key concern with AI and consumer privacy is the potential for unauthorized access to personal information and data breaches. With the advancement of AI, hackers and malicious actors can become more sophisticated in their cyberattacks by exploiting vulnerabilities in organizations’ IT systems and security measures. Businesses must work diligently to ensure that they have robust security measures in place to protect customer data from cyber threats. This includes data anonymization, using advanced encryption standards, firewalls, and implementing stringent access controls to safeguard personal and sensitive information.

It’s critical to periodically review and update security protocols to reflect the evolving landscape of cyber threats, ensuring the organization’s systems remain fortified against new methods of attack. Educating employees on the importance of data security and the protection of personal information is also crucial as they are the first line of defense in any organization. As such, regular training sessions should instill best practices and foster an organizational culture cognizant of the ramifications of unauthorized data access and data breaches.

In addition to the aforementioned security measures, Privacy-Enhancing Technologies (PETs) are also gaining a lot of attention to minimize the impact on consumer privacy. PETs include techniques such as differential privacy, which adds random noise to data to protect individual identities while still allowing for meaningful analysis. Organizations should consider how PETs could be integrated into their core processes to maximize the benefits of using AI technologies and the use of their customers’ personal information while minimizing the risks associated with collecting, processing, and safeguarding it. In sum, organizations should take a multi-layered approach to cybersecurity in order to mitigate privacy risks associated with unauthorized access to personal information and data breaches.

Are There Any AI Laws That Could Provide Additional Guidance to Businesses?

Several countries have implemented AI laws. However, the European Union (EU) AI Act is the first comprehensive law that focuses on the development, placing on the market and adoption of trustworthy and Human-Centered AI (HCAI) across the EU to ensure that there is a balance between the emerging AI technologies and the need for accountability, transparency, protection of fundamental rights, including privacy, non-discrimination and fairness. The unofficial, final text on the proposed AI Act was published online on January 22, 2024 by Luca Bertuzzi, who is the Technology Editor at Euractiv, and shortly thereafter, Dr. Laura Caroli shared the consolidated document thereof.

Once the text is approved and formally adopted by the EU Parliament and the Council of the EU, the AI Act will be published in the Official Journal of the EU and will enter into force on the 20th day after its publication. However, its entry into application would be 24 months after its entry into force, except for specific provisions, enforcement of which will be done in phases ranging from 6 – 36 months after AI Act enters into force. These grace periods of phased-out application of the AI Act will give organizations the needed time to ensure compliance. Different from the EU, the United States navigates a complex privacy landscape, fragmented across federal and state jurisdictions. As of today, there is no singular, comprehensive federal privacy law akin to the GDPR in Europe and organizations must rely on a patchwork of state privacy laws as well as, the standards and principles for AI safety and security described in President Biden’s Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence.

There is a growing expectation that the US will eventually adopt a unified federal framework for privacy. Until then, organizations must remain agile, continuously adapting to the evolving tapestry of privacy legislation.

Final Words

In conclusion, the impact of AI on privacy needs to be assessed carefully. Understanding AI technologies and their implications for the privacy of individuals is key. Organizations need to ensure that a risk-based approach is taken when collecting, storing and using personal information, and should be aware of existing legal and ethical obligations as they relate to protecting personal information. Additionally, businesses must ensure that appropriate operational controls are put in place to ensure responsible use of AI tools and systems. At the end of the day, the primary responsibility lies with businesses when it comes to balancing the benefits from AI tools while upholding ethical principles and complying with applicable laws and regulations concerning privacy protection. By prioritizing consumer privacy, businesses can build trust with their customers while mitigating potential risks associated with AI technology.

Jenya Beylin

Jenya Beylin, CIPP/E/US, is a Senior Attorney at Meyer Law, one of the fastest growing law firms in the United States. Jenya helps companies with domestic and international privacy, data protection and compliance matters. Jenya is a blog contributor at Meyer Law and is a member of the International Association of Privacy Professions (IAPP). Learn more about Meyer Law here and follow us on Instagram @loveyourlawyer.