[THE VIEW]AI Basic Act... Time to Move Beyond Regulation

Passed the National Assembly Plenary Session at the End of Last Year
Healthcare, Finance, and Platform Operators
Worried About Being Hindered by Regulations

Despite political turmoil, the Artificial Intelligence (AI) Basic Act passed the National Assembly plenary session at the end of December last year. The AI Basic Act, which was passed faster than expected, has put operators on high alert. This is because the AI Basic Act focuses mainly on regulating operators, lacking direction for fostering and utilizing AI. In particular, business sectors classified as high-impact AI, such as healthcare, finance, transportation, and energy, are expected to be directly hit by the AI Basic Act.

Some regulatory provisions are expected to have a significant impact on platform operators and certain industries. Platform operators like Baedal Minjok, Coupang Eats, and Kakao Mobility operate route optimization, dispatch, and customer recommendation systems through AI. If these sectors are designated as high-impact AI operators, there is a possibility that each company will have to disclose the operating principles of AI algorithms developed through painstaking efforts. Such regulations could negatively affect both consumers and companies.

The core of platform business is ‘connection.’ AI is utilized to effectively link consumers and service providers. However, if the AI Basic Act obstructs AI learning and development under the pretext of protecting human rights and fundamental rights, the development of core technologies will inevitably become impossible. Looking at Uber, the taxi application in the United States, it has been steadily accumulating data and improving algorithms by introducing AI for the past six years. Grab, Southeast Asia’s largest food delivery and logistics app operator, is actively developing and operating AI agents and automatic dispatch algorithms in line with the Singapore government’s policy of ‘fostering rather than regulating.’ Thanks to this, it has strengthened its competitiveness and dominated the market.

If high-impact AI operators are confined within the regulatory framework of the AI Basic Act, Korean platform operators will find it difficult to develop or utilize technology itself. For example, in the case of delivery platforms, if it becomes mandatory to explain or verify bias in the dispatch orders received by delivery workers or drivers and notify them, these additional tasks could slow down the crucial dispatch and delivery speed. Existing automated services will also become difficult, ultimately causing inconvenience to both consumers and delivery workers. Such regulations will weaken the competitiveness of the domestic platform industry and inevitably lead to its elimination in the global market. There is also a risk of a reversal of priorities, where AI for developing core competitiveness and strengthening global competitiveness is abandoned in response to regulations.

The European Union (EU) AI Basic Act designates research and development stages for utilizing AI before market launch or service deployment as exceptions to regulation to foster AI, granting companies a certain preparation period for AI utilization.

However, the Korean AI Basic Act does not even have such exception provisions. It only applies exceptions to industries for the nation or defense industries. While regulation is necessary, it should not be excessive. AI technology is a key factor that goes beyond the interests of specific companies to determine national economic growth and global competitiveness. If technology development and utilization stagnate within the regulatory framework, it will lead to not only weakened industrial competitiveness but also national losses. Creating an environment that enables innovation and providing platform operators with sufficient preparation time and freedom for business development will allow AI to become a driving force for Korea’s economic resurgence. I sincerely hope that the AI Basic Act will not hold back platform operators such as Kakao and Baedal Minjok, which are solid pillars of the Korean economy, under the guise of regulation.

Kyung Na-kyung, Professor, Department of Computer Science, National University of Singapore