• Rafif Rizqullah

The Development of Artificial Intelligence and Challenges for Future Legal Landscape

Updated: Aug 31

By: Rafif Rizqullah (rafif.rizqullah@launcher.id)

As Artificial Intelligence (AI) converges with progress in robotics, cloud computing and precision manufacturing, tipping points will arise at which significant technological changes are likely to occur very quickly. Crucially, advances in robot vision and hearing, combined with AI, are allowing robots to better perceive their environments. This could lead to an explosion of intelligent robot applications — including those in which robots will work closely with humans.

Even academic debate on AI has tended to be polarized between sceptics and fanciful futurists. Yet there is an emerging middle-ground consensus that AI research is poised to have profound impacts on society. For those who remain sceptical that progress is imminent, bear in mind that Google, Toyota, Facebook, Microsoft and other companies are together pouring billions of dollars into AI and robotics research, which they see as the next frontier for profits. Efforts to accelerate research must be accompanied by safeguards against the potential pitfalls of these powerful technologies.

The development of AI in fact relates to the emerging development of the digital economy of the twenty-first century. The widespread used of AI in the application of business enterprises and consumer applications, has raised an important question on whether the current legal doctrine is sufficient enough to account for systems engaging in transactions on behalf of humans and corporations in ways that are a priori unknown or predictable by humans.

Stanford Business School White Paper Titled “Technological Disruption and Innovation Last-Mile Delivery” that was written in 2016, has emphasized that how algorithms are being used to collect orders, monitors deliveries and supplies, determine optimum routes, and forecast demand for products. In 2020, Algorithm in the digital economy does even more, through AI, algorithms serve as shopping agents, recommender services, data mining of customer buying patterns, customer service help, auctions, negotiations, contracts, brokering, reputational services, promotions, advertisings, procurement, and creating product catalogue. In the financial sectors, AI is currently widely used for credit decision, risk assessment, collections, even contracts.

The role of algorithms and other techniques of AI in contract law is another emerging subject for a law of AI. In the application of financial technology, especially in the field of peer to peer lending industry in Indonesia, most cash loan companies has used algorithms to enable automation of the credit decision in the system, however this has not been without risk, regardless the algorithms has been set to pass certain criteria for their credit decision, however breach are still inevitable. This raises the questions in law, who should be responsible on the breach, can algorithms be subject of law or the creator shall be responsible of the algorithms?

In a world of interconnected devices with artificially intelligent agents contracting and making decision on behalf of humans, raising the question on whether the Indonesian law ready to accommodate the action of AI to be regarded as agent of humans under the Indonesian Civil Code. Whether algorithm shall be considered as a tool also has not been adequately addressed by any Indonesia regulations. The emerging development of AI remains a challenge for the legal landscape to accommodate the question that it presents.