Regulation of Chat GPT and AI: Can Switzerland use regulation Neutrality to its advantage?

The question is whether Switzerland can benefit from its particular situation to become a neutral ground in Europe, with more flexible regulations than its direct neighbors. Could it provide companies a ground for experimentation on different technologies and different laws?

24 October 2024 Global Artificial Intelligence

Italy has become the first country in the West to ban ChatGPT, the popular artificial intelligence chatbot from U.S. startup OpenAI. The Italian Data Protection Watchdog ordered OpenAI to temporarily cease processing Italian users’ data amid a probe into a suspected breach of Europe’s strict privacy regulations. At the European level, Brussels has also recently drafted its artificial intelligence rulebook, the Artificial Intelligence Act. 

Could Switzerland have a special card to play with its unique situation? It is both deeply integrated with the European economy and able to design its own regulation as a non-UE member. As such, it might do well to carefully observe the most recent moves around AI in Italy and beyond.

With the revised Swiss Federal Act on Data Privacy, which entered into force on September 1 2023, companies must justify collecting information from their customers. They must disclose which third parties they share this information with. Additionally, individuals will have the right to know how long their data are stored and what purposes they are used for. They can also request corrections of any inaccurate data without having to give a reason.

One of the reasons for this revision was to harmonize legislation on data privacy with the EU. It allows Swiss companies dealing with sensitive data (medical data, genetic material, political views, etc.) to continue collaborating with their EU counterparts.

But there are different levels of regulation. EU regulations are more restrictive than their Swiss counterparts. As often, the devil lies in the details. For example, the EU forces companies to assign a data protection officer and report any breach within the next 72 hours. In the Swiss regulation, it is only advised that companies assign a data protection officer and they should report any breach “as soon as possible” (with no fixed time limit).

Then, there is the other end of the regulation spectrum. In the USA, there is no federal data privacy law. Only 6 states passed legislation on the issue. The latest meeting of seven leading AI companies (Meta, Amazon, Google, OpenAI, Microsoft) with President Biden in July 2023 seems to be as far as the USA will go on regulation at this moment. In this meeting, the companies essentially pledged to do no harm. Some would argue that this is like trusting oil companies to save the environment or tobacco consortiums to care for our lungs. 

However, this is considered an alternative way to deal with the side effects of technological development. Some believe regulation curtails innovation. 

The question is whether Switzerland can benefit from its particular situation to become a neutral ground in Europe, with more flexible regulations than its direct neighbors. Could it provide companies a ground for experimentation on different technologies and different laws? In other terms, will the new framework agreement with the EU – if signed – allow Switzerland to have its cake and eat it as well?

OpenAi has since complied with the Italian government’s request, and ChatGPT access was fully reestablished in May 2023. But we may be mistaken if we consider this legal episode an Italian peculiarity. To block ChatGPT, GPDP (Italy’s Data Protection Authority) mainly relied on the European GDPR provisions, particularly those relative to minor protection. In consequence, more European countries could follow in Italy’s footsteps. If Switzerland wants to be in the best position to benefit from AI, it should therefore scrutinize not only the latest developments in Brussels but also how each EU member makes use of European regulations.

Furthermore, the EY European AI Barometer 2024 shows that Swiss companies have profited the most from AI and have a positive attitude towards using AI for improving and making more efficient their work processes. Together with the strong infrastructure in AI, Switzerland has certainly much to gain from a concerted effort to increase the assistance of AI in the economy.