Italy fines first city for privacy breaches in use of AI

ROME: Italy's privacy watchdog has fined the northern city of Trento for breaking data protection rules in the way it used artificial intelligence (AI) in street surveillance projects. Trento was fined 50,000 euros ($54,225) and told to delete all data gathered in two European Union-funded projects. It is the first local administration in Italy to be sanctioned by the GPDP watchdog over the use of data from AI tools.

The authority - one of the EU's most proactive in assessing AI platform compliance with the bloc's data privacy regime - last year briefly banned popular chatbot ChatGPT in Italy. In 2021, it also said a facial recognition system tested by the Italian Interior Ministry did not comply with privacy laws.

Rapid advances in AI across multiple industries have raised questions about privacy rights and the safety of personal data. After an in-depth investigation of the Trento projects, the GPDP found "multiple violations of privacy regulations," it said in a statement, while recognising the municipality acted in good faith.

It said the data collected was not sufficiently anonymous, and that it was incorrectly shared with third parties. The municipality said it was considering appealing the decision.

"The decision by the regulator highlights how the current legislation is totally insufficient to regulate the use of AI to analyse large amounts of data and improve city security," it said in a statement. The Italian government led by Prime Minister Giorgia Meloni has said it would put a spotlight on the AI revolution during its presidency of the Group of Seven (G7) major democracies.

In December, EU lawmakers and governments agreed provisional terms for regulating AI systems like ChatGPT, taking a step closer to setting rules governing the technology. A critical sticking point was over the use of AI in biometric surveillance.