OpenAI and ChatGPT investigated by German regulators to determine privacy practices

Updated: 25 April 2023

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OpenAI has attracted a lot of attention after launching ChatGPT in late 2022. Unfortunately, the highly-advanced chatbot also raised a lot of questions. Some technology experts are raising concerns about advanced AI and whether it can be misused to threaten modern systems and potentially society itself.

Meanwhile, Germany’s regulators launched an investigation and established the bot’s General Data Protection Regulation (GDPR) compliance. Along the way, they were also interested in researching OpenAI’s privacy practices.

OpenAI faces another hurdle in its quest to continue doing business in the European Union, as German authorities have launched an inquiry into the company’s privacy practices and General Data Protection Regulation (GDPR) compliance. #OpenAI #ChatGPT #Germany #GDPR #Europe pic.twitter.com/FZ4Q83Qjqk

— Thomascrypto Guy (@Tommy_Roberts13) April 25, 2023

Regulators demand answers about OpenAI’s data privacy practices

The initial reports of the German authorities’ inquiry came from Agence France-Presse, which says that the regulators are demanding answers regarding the company’s intentions. They are also concerned about whether it can comply with the RU’s strict data privacy laws. According to the commissioner for the northern German state of Schleswig-Holstein, Marit Hansen stated that the regulators “want to know if a data protection impact assessment has been carried out and if the data protection risks are under control.”

He added that the country requested that OpenAI provide information about issues stemming from the European GDPR. Given that Germany’s regulators have recommended further scrutiny lately, this strict approach does not come as a surprise. However, it does add greater difficulty for OpenAI if it wishes to continue operating in Europe.

Last month, the company launched its GPT-4 model, which impressed with its capabilities. However, it also caused a lot of concern, which led to increased scrutiny of OpenAI from European regulators. Italy was the first European country to issue a full ban on the product. Meanwhile, the company and Italian regulators were trying to assess whether OpenAI can comply with Italian privacy laws and GDPR.

Following Italy, Germany opens administrative proceedings against #OpenAI. ?
The state data protection commissioners have emphasized the need for a legal framework to regulate #ChatGPT.?‍⚖️ pic.twitter.com/DFNXmnXfV8

— JetSoftPro (@JetSoftPro) April 21, 2023

Regulatory concerns may push OpenAI and its customers out of the EU

With Germany submitting its own requests for information, it remains unclear how OpenAI will respond. So far, the company did not provide any public comment on the matter. However, the regulators have signaled that they expect it to respond to their inquiries by June 11th at the latest.

The main issues that concern the regulators — not only in Italy and Germany but throughout Europe — relate to the training data that OpenAI used to build GPT AI models. At this time, users cannot opt out of having their data used. They cannot even correct the models if they make a mistake.

The existence of GDPR guarantees that individuals have the right to have their data modified to reflect accuracy if there is a mistake, or even removed from the system entirely, on their request. Between the regulators and the company, many OpenAI users are paying premium subscription fees in order to have personal or business access to the bot.

Even crypto analysts and traders have been using GPT API to build new, advanced bots for analysis or trading. All of them could be affected if OpenAI products get banned across the EU, which could even force individuals, or even entire companies, to stop operating in EU countries.

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