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Canada Aims to Regulate AI in Search & Social Media

Regulation | Oct 10, 2023

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The Canadian government, through ISED Minister François-Philippe Champagne, has revealed plans to regulate AI, particularly in how it is utilized to prioritize content display on search engines and social media platforms.

This comes amidst the study of Bill C-27, a bill focused on privacy reform and AI regulation. Notably, the government has opted not to disclose the actual text of the planned amendments to the bill.

Targeted AI Systems

The regulation zeroes in on several classes of AI systems, including those related to employment determinations, service provision, biometric information processing, content moderation on online platforms, healthcare, administrative decisions, and law enforcement assistance.

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Unlike the European Union (EU), Canada’s regulation includes a category for content moderation and prioritization of content presentation, which is not present in the EU’s regulations. This inclusion could mean more extensive regulation, affecting how platforms like Google and TikTok utilize AI to generate search results, translations, and user recommendations.

By categorizing search and social media results as “high impact” systems, Bill C-27 introduces a slew of regulations and new powers, encompassing risk mitigation, record-keeping, and public disclosures. The Minister can demand record disclosure, mandate an audit, and order virtually any measures resulting from the audit. Non-compliance could result in penalties up to 3% of gross global revenues.

Aligning with Global Powers?

While the government claims alignment with the EU, Canada seems to be an outlier, especially when compared to the EU and the U.S., particularly regarding the regulation of algorithms and discoverability. The specific obligations remain somewhat uncertain due to the non-disclosure of the amendment texts.

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While many Canadians have advocated for rules to prevent bias and other harms emanating from AI, the inclusion of content moderation and discoverability/prioritization has come as a surprise. Equating AI search and discoverability with issues like bias in hiring or uses by law enforcement has sparked discussions and will likely be a focal point of debates moving forward.

Examples of Unintended Consequences

The stringent regulations on AI, especially in content moderation and discoverability, might stifle technological innovation. Developers and companies might be hesitant to explore and implement new AI technologies due to the fear of non-compliance with the regulatory framework. This could potentially slow down advancements in AI applications within Canada, causing the nation to lag behind in the global tech race.

The financial and administrative burden of adhering to the new regulations might be particularly heavy for SMEs. Implementing, managing, and ensuring compliance with the AI regulations might require resources that many smaller companies lack. This could inadvertently favor larger corporations that possess the necessary resources, thereby widening the gap between large enterprises and SMEs in the digital space.

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The regulation of content moderation algorithms might inadvertently impact freedom of expression online. If platforms are mandated to modify their AI systems to comply with government regulations, it might influence what content is surfaced and suppressed, potentially leading to bias or the muting of certain voices and perspectives. This could spark debates and concerns regarding censorship and the impartiality of AI-driven content moderation and discoverability on social media platforms.

Conclusion

Canada’s plan to regulate AI in search and social media content moderation and discoverability marks a significant step in the digital regulation realm. While it addresses numerous concerns related to bias and harm prevention, the surprise inclusion of content moderation and discoverability raises new questions and considerations for digital platforms and businesses. Stay abreast of regulatory updates, subscribe to NCFAs weekly newsletter and join NCFA today.


NCFA Jan 2018 resize - Canada Aims to Regulate AI in Search & Social MediaThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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