Regulators Turn Their Attention to AI Privacy Regulations
Klein Moynihan Turco LLP (KMT) highlights the growing scrutiny of artificial intelligence (AI) by regulators, particularly concerning consumer data privacy implications as its adoption becomes widespread. Industries utilizing AI are being compelled to comply with new regulations, most notably the proposed expansions of the New Jersey Data Privacy Act (NJDPA).
The NJDPA mandates data privacy obligations similar to those enacted in states like California, Virginia, and Florida. It affects businesses that operate in New Jersey or target residents, imposing requirements on those controlling or processing data from at least 100,000 consumers, or 25,000 consumers when profits are derived from data sales.
A significant aspect of the proposed regulations is the stipulation that, while companies may use collected data for internal purposes, utilizing it to train AI is not classified as such unless explicit consumer consent is obtained. The consent must come from understandable and accessible disclosures, clearly detailing the use of personal data. Companies are required to notify consumers of every intended use, ensuring transparency and preventing misleading information.
For telemarketers and entities affected by the NJDPA—especially those employing AI-generated communication—careful adherence to these regulations is essential. The Federal Communications Commission (FCC) has already categorized AI-generated calls as artificial or prerecorded, aligning them under the Telephone Consumer Protection Act (TCPA). Before using consumer data for AI training, businesses must ensure they secure consumer consent, backed by comprehensive disclosures.
As technology evolves, organizations leveraging AI are advised to seek legal counsel to align their practices with the newest federal and state regulations, safeguarding against potential noncompliance.
This emerging regulatory landscape emphasizes the intersection of innovation and consumer rights, marking a pivotal moment for businesses navigating AI’s rapid advancement.
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