Investment Manager's Insight: X (formerly Twitter) Resolves Legal Battle with EU Privacy Watchdog Over AI Model Training Data Without Consent
In a recent development, X (formerly Twitter) has reached an agreement with the European Union's lead privacy watchdog regarding the processing of user data for AI model training without consent. This resolution comes after X suspended its processing of European users' data for AI model training following legal action by Ireland's Data Protection Commission (DPC) over the use of people's information to train its AI chatbot, Grok.
This move by X is not isolated, as Meta has also faced regulatory scrutiny in the EU for similar data protection issues, leading to a pause in processing activities earlier. The DPC expressed satisfaction with the conclusion of the legal proceedings, emphasizing the importance of protecting the rights of EU/EEA citizens.
The exact terms of X's agreement with the DPC remain confidential, but it is believed to restrict the platform's use of people's data. The GDPR mandates a valid legal basis for processing personal data, and X has received GDPR complaints for utilizing data for Grok training without explicit consent.
The absence of a fine for X despite the serious nature of the violation suggests strategic considerations may be at play. With potential sanctions of up to 4% of global turnover for GDPR breaches, X may be choosing to prioritize other legal battles. The involvement of prominent privacy rights campaigners like Max Schrems further underscores the significance of this issue.
Looking ahead, the DPC has requested guidance from the European Data Protection Board (EDPB) on broader issues surrounding personal data use in AI models. This move aims to establish consistent regulation in the industry and address complaints related to AI model development.
In conclusion, X's resolution with the DPC highlights the importance of privacy rights and regulatory compliance in the digital age. Investors and users should stay informed about data protection practices of tech companies to make informed decisions and safeguard their personal information.