AI in EU: The Privacy Advantage

September 29, 2022
Many consider data privacy regulation as bad for businesses. But taking into consideration recent trends, it could turn out to be an advantage.

When discussing the potential of Artificial Intelligence in Europe, people often consider European data protection a disadvantage hindering technological development. Although this has been the case, there are reasons for optimism about the times ahead. The reasons for this are two trends we recently observed. On the one hand, awareness and consumers' demand for privacy increase while, at the same time, privacy-preserving technology makes data protection less and less of a hurdle. These developments signal that data protection can be an asset if handled correctly. This can put Europe at a significant advantage, because the companies working on cutting edge privacy-preserving technology are mostly located in Europe. Moreover, due to demanding data protection regulation, European companies have to build in data protection right from the start of their product.

Today's technology is much more reliant on data than a few years ago. This trend is likely to continue. As technology increases in power and we can infer more and more information from the data we get, privacy concerns are growing as well. Moreover, AI is increasingly being applied in sectors, such as healthcare, where we deal with highly sensitive data. People are much more worried about their health data than about the clicks they make online. Consequently, awareness of data privacy issues is rising, not only in Europe.

The rising awareness becomes more apparent, once we look at the trend towards more data protection. Regulations for data protection are especially strong in Europe. The European GDPR protects all kinds of private data and is often considered the gold standard of data protection. But if we look around the world, we can see that other countries are catching up. Especially deep tech hubs such as California (CCPA) or Singapore (PDPA) are implementing regulations modeled after GDPR. This development is due to people outside of Europe worrying more about privacy issues. So in the future, there might be an advantage for European companies who are better at protecting their customers' data because they already have to build in data protection from the beginning. Moreover, you can always export your products to countries with lower standards for data protection, although, it can be difficult the other way around.

So, how can we protect sensitive data and still save lives through healthcare applications? This is where a different kind of technology comes into play. The rising interest in privacy is met by the quickly developing industry of Privacy Enhancing Technology(PET). "PET" generally refers to technologies that help resolve security and privacy risks. These technologies, among other things, allow the development of powerful machine learning models while ensuring that the data is still protected. A prime example of this is Decentriq, a company that enables companies to train machine learning models on encrypted data using their Data Clean Room. This technology enables data collaborations on private data and allows for a more trustful cooperation. Companies like Decentriq directly experience the rising demand for data protection in the US. Pierre Cholet, Head of Business Development at Decentriq, told us: "We talk to more and more American companies, and we can see that the demand for data protection rises in US markets. In the end, privacy protection is beneficial for consumers. In a liberal economy like the US, there is a rather quick translation from consumer preferences into business models."

There is a demand for data protection, not only in Europe. Historically this demand conflicted with technological innovation. However, the rise of Privacy Enhancing Technology in Europe could finally align the wish for privacy and the wish for innovation. The only thing we need for this to happen is a quick adoption of new technologies.

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