Companies Urge EU to Pause AI Act

The EU AI Act is a first-of-its-kind AI regulatory framework. Passed in March 2024, the act regulates how AI developers can develop and deploy AI models across the EU. While some provisions of the act have already gone into effect, others are set to phase in this August. However, the European business community is urging the government to pause implementation, arguing that the law’s novel nature makes compliance too difficult and that regulation will stifle innovation. A recent Fisher Phillips memo discusses a letter sent by leading EU companies:

“Over 45 leading European companies just publicly urged the EU to pause the rollout of the EU AI Act’s impending rules for high-risk and general-purpose AI (GPAI) systems, citing concerns over regulatory complexity and competitiveness… While the European Commission has emphatically rejected attempts to delay implementation of the August 2 effective date, it has also indicated it might pause the implementation of some parts of the AI Act if standards and guidelines to implement the law are not ready in time.”

The EU appears to be standing firm, but business interests have been gaining political momentum in the Union. There is precedent for pausing and scaling back regulation to reduce the burden on industry. Over the last year, EU lawmakers have scaled back a number of the Union’s ambitious sustainability legislation (something I frequently write about as an editor for PracticalESG.com). Could the willingness to reduce regulatory burden translate to the AI Act as well? Only time will tell, but as the August deadline draws nearer, there is pressure on the government to at least issue guidance on core elements of the Act.