Business News – September 19, 2024

1 - Meta to European Union: Your Tech Rules Threaten to Squelch the AI Boom

Facebook parent, other companies warn in open letter that the bloc’s regulations risk hampering innovation and economic growth

By Kim Mackrael. Sept. 19, 2024.

A group of companies including Meta Platforms META 0.30%increase; green up pointing triangle, Spotify and Italian luxury-fashion giant Prada warned Thursday that the European Union risks missing out on the full benefits of artificial intelligence because of the bloc’s tech regulations.

In an open letter that was coordinated by Meta, executives from more than two dozen companies said AI can boost productivity and expand the economy, but Europe might reap fewer rewards than other jurisdictions.

“Europe has become less competitive and less innovative compared to other regions and it now risks falling further behind in the AI era due to inconsistent regulatory decision making,” the letter said.

The letter calls on the EU to harmonize its rules and provide what the signatories refer to as a modern interpretation of the bloc’s data-protection law.

Other signatories include representatives from Swedish telecommunications-equipment company Ericsson, German software company SAP and German industrial group Thyssenkrupp, along with researchers and civil-society and trade groups.

The letter comes after Meta and Apple said new AI features they are rolling out elsewhere won’t initially be available in Europe because of the bloc’s regulations.

Apple said in June that it likely wouldn’t introduce its new AI system, called Apple Intelligence, for European iPhone users this year because of what it said were uncertainties caused by a new digital-competition law.

Requirements that large tech companies make it easier for rival services to work on their operating systems “could force us to compromise the integrity of our products in ways that risk user privacy and data security,” Apple said at the time.

Meta said separately in July that it wouldn’t release a future multimodal AI model in the EU in the near term because of what it referred to as “the unpredictable nature of the European regulatory environment.” The company had previously said it would delay a plan to train its AI models using data from adults’ public posts on Facebook and Instagram in Europe after Ireland’s data-protection authority raised concerns.

The European Commission, the bloc’s executive body, has said that all companies are welcome to offer their services in Europe if they comply with the bloc’s laws.

The EU has developed a reputation as a leading global regulator whose rules often have a sweeping global impact. The bloc’s General Data Protection Regulation, which aims to safeguard personal data, rippled globally and became a template for some countries.

More recent EU legislation dealing with digital competition, online content and AI has since been introduced, prompting some of the world’s biggest tech companies to change how they operate in the bloc.

Lawmakers and officials say the EU’s regulations are crucial to challenging monopolistic behavior by large tech companies, curbing the spread of disinformation and abusive online material and protecting children online.

But the rules have also prompted complaints from some companies and industry groups, which say they are cumbersome to implement and put Europe at a disadvantage.

It isn’t unusual for companies to stagger the rollout of new products and features in regions outside the U.S.

The Google AI chatbot Bard, since renamed Gemini, expanded into the bloc months after its initial launch in the U.S. and U.K. Bard’s release in Europe was delayed, in part, by a request from Ireland’s data-protection authority for additional privacy features.

Meta last year released its Threads social-media platform in the EU, months after it first rolled out in the U.S.

The EU, with some 450 million consumers, is among the world’s largest and wealthiest markets, making