21 December 2023

Japan's New AI Guidelines: Technological Triumph Or Regulatory Riddle? (Video)

Gamma Law


Gamma Law is a specialty law firm providing premium support to select clients in cutting-edge media/tech industry sectors. We have deep expertise in video games and esports, VR/AR/XR, digital media and entertainment, cryptocurrencies and blockchain. Our clients range from founders of emerging businesses to multinational enterprises.
Japan has built a well-deserved reputation for technological prowess and a progressive attitude toward innovation.
Japan Technology
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Japan has built a well-deserved reputation for technological prowess and a progressive attitude toward innovation. So, it's no surprise that it is one of the first countries to release regulations and guidelines governing generative artificial intelligence imagery.

Unfortunately, according to critics, these rules create more questions than clarity; they are ambiguous and offer no real solutions to the legal ramifications centering on creative rights, intellectual property, and business use of this emerging technology. Writers, artists, musicians, and other creators who rely heavily on AI still are unsure about how these guidelines will be interpreted and applied, and what this means for the future of AI development, not just in Japan, but globally.

The guidelines, aimed at companies utilizing AI or AI-trained data, are designed to bolster Japan's reputation as a global hub for chip and AI technology by promoting the safety of AI-related products developed there through measures such as disclosing training data sources.

These amended "Governance Guidelines for Implementation of AI Principles" outline key considerations for upholding the "Social Principles of Human-Centric AI" adopted by the Cabinet Office's Integrated Innovation Promotion Council in 2019. The guidelines reaffirm the critical idea that a non-regulatory, non-binding framework is essential for the development and use of AI.

The guidelines also stipulate that businesses involved in AI development and operation should establish and adhere to fundamental principles. Japanese government agencies have finalized several additional documents discussing AI development and utilization to facilitate international discussions regarding ethics and governance related to AI along with the Governance Guidelines. These guidelines underscore the values that should be respected in the development and use of AI, such as fairness, transparency, and accountability. Consequently, many companies are likely to refer to these guidelines when establishing their principles for developing and operating AI.

In its "soft law" approach, Japan has refrained from imposing any binding obligations or harsh restrictions on companies. Instead, it has published a series of suggestions and best practices, encouraging the private sector to self-regulate. Proponents say this approach offers a pragmatic response to the rapidly evolving AI landscape. It allows for flexibility, enabling businesses to adapt and innovate while still adhering to a set of fundamental ethical principles. By doing this, Japan is positioning itself as a leader in AI governance, setting a precedent that other nations may follow.

As AI continues to advance rapidly, the need for clear, comprehensive, and effective governance becomes ever more critical. While Japan's approach provides a framework for discussion and self-regulation, a more robust, formal, and determinate legal compact is in order. Japan's pioneering efforts in issuing regulations and guidelines on generative AI imagery have set a global precedent and could serve as a "working document" as global jurisdictions strive to adopt an unambiguous method for resolving the ethical and legal implications AI creates.

Regulatory Provisions and Implications for Video Game Developers

  1. Disclosure Requirements call for complete transparency from AI developers, obligating them to disclose the purpose of their algorithms, any potential risks associated with using the data, and the data used in training the AI. This requirement has far-reaching implications for foreign businesses operating in Japan, particularly American video game companies whose products are based on AI.

    These companies would need to reveal not only the purpose of their games to Japanese regulators but also the underlying data on which their algorithms are based. They would further be compelled to highlight any potential risks such as the disclosure of financial information or other personal data. Forced disclosure would allow external parties to detect and mitigate any risk of generating problematic content in advance, thereby preventing issues such as infringement of intellectual property rights.

    While the requirements under Japan's AI rules mirror those found in the US and Europe, they are notably less stringent than the EU's regulations, which prioritize holding large corporations accountable over fostering innovation. While these disclosure requirements may seem demanding, they seem intent on striking a balance between accountability and the promotion of technological innovation.

  2. Third-party Audits and Transparency Obligations encourage AI companies to rely on outside professional verification and inform users when they are using AI. Video game companies can comply with these obligations in various ways, such as incorporating this information into their terms of service or asking users to sign a separate disclosure agreement.

    However, some AI developers have voiced concerns about losing their competitive edge if the scope of forced disclosure is extended to proprietary information. As such, it might benefit these companies to engage a law firm specializing in AI to advise on the best legal recourse and draft disclosure statements that comply with the guidelines without compromising the company's unique selling propositions.

  3. Data Protection and Privacy Obligations expect AI developers to disclose system functions and institute rules for excluding certain data from what is collected for AI training. The draft also emphasizes the necessity of disclosing which sources are included in the learning databases.

    Businesses offering AI-based services are also asked to distribute their policies for safeguarding personal information, prohibiting unacceptable usage such as generating disinformation and spam emails, and explicitly state when their services are AI-based.

    These obligations necessitate a comprehensive and well-drafted data protection and privacy policy. They aim to protect not only the privacy of users but also the integrity of the AI industry by preventing misuse.

Japan's guidelines contribute to the world's attempt to address the complexities involved in AI development. Emphasizing transparency, accountability, and fairness, Japan aims to channel AI technology in alignment with ethical best practices while encouraging innovation and mitigating risks. While they aren't legally binding, they set a precedent for industry self-regulation. Voluntary compliance, coupled disclosure, third-party audits, and data protection give global regulators a balanced blueprint for iterating the use of generative AI. More work is clearly needed, and it remains to be seen whether Japan's soft law tactic will prove effective or whether nations and regions will opt for legally binding obligations. The implications of these guidelines are complex, and the stakes are high, especially for businesses outside Japan

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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