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MANAGEMENT UPDATE.

THE FIRST AI CONSUMER PROTECTION LAW . . . WITH CAVEATS!

Advances in Artificial Intelligence have created a great deal of apprehension in many corners about the future. It all feels something like the excitement and fear that accompanied the cloning of Dolly the Sheep back in 1996. 


The issue that emerged then, as it has now, is that there are few or no controls over the way a technology can and should be used. A number of states are now considering how they should create regulations around AI according to a March summary from the National Conference of State Legislatures.



In mid-May according to the Colorado Sun, that state passed legislation protecting consumers from the possible misuse of AI, when Gov. Jared Polis signed a bill into law titled “Consumer Protections for Artificial Intelligence,” which is to be implemented in 2026. Though there have been executive orders and other legislation aimed at controling the use of AI, this is the first AI-related consumer statute passed in a state, reported the Sun.


According to the bill’s summary, it “requires a developer of a high-risk artificial intelligence system . . . to use reasonable care to avoid algorithmic discrimination in the high-risk system.”

Among its stipulations are that developers of AI systems must do the following (taken with slight alterations for clarity from the text of the bill):


  • Annually review the deployment of each high-risk system to ensure that the high-risk system is not causing algorithmic discrimination.


  • Provide a consumer with an opportunity to correct any incorrect personal data that a high-risk artificial intelligence system processed in making a consequential decision.


  • Provide a consumer with an opportunity to appeal, via human review, if technically feasible, an adverse consequential decision concerning the consumer arising from the deployment of a high-risk artificial intelligence system.


  • Disclose to the attorney general the discovery of algorithmic discrimination, within 90 days after the discovery, that the high-risk system has caused or is reasonably likely to have caused.


The bill wasn’t a slam dunk, and Gov. Polis indicated to lawmakers that he had reservations about it in a statement he delivered on signing. “I am concerned,” he wrote, “about the impact this law may have on an industry that is fueling critical technological advancements across our state for consumers and entrepreneurs alike. Government regulation that is applied at the state level in patchwork across the country can have the effect to tamper innovation and deter competition in an open market.”


He went on to write that he anticipates that care will be taken in the two years before the bill takes effect “to fine tune the provisions and ensure that the final product does not hamper development and expansion of new technologies in Colorado that can improve the lives of individuals across the state.”


Meanwhile, although the federal government has no broad statutes controlling the use of AI, a handful are in the works, and one or more could conceivably influence the way the Colorado bill finally shakes out before it goes into effect.


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MANAGEMENT UPDATE ARCHIVES.

ASPAS NEW H. GEORGE FREDERICKSON SOCIAL EQUITY CENTER

RETHINKING FINANCIAL REPORTING

NINE CITIES HONORED FOR FORGING A FUTURE WITH DATA

THE IBM CENTERS NEW ADVISORY COUNCIL

STATES MAY SAVE MONEY ON MEDICARE BUT AT WHAT COST

ENERGIZING INTERGENERATIONAL MOBILITY 

IF IT HAPPENS IN LOUISIANA KEEP IT IN LOUISIANA

PREDICTING STATE EXPENDITURES

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