As per 1 January 2023, a new regulator for algorithms has been introduced in the Netherlands. It will be housed within the Dutch Data Protection Authority (Autoriteit Persoonsgegevens, Dutch DPA) but will have its own tasks and responsibilities.
The new algorithm regulator will focus on: (i) identifying and analyzing cross-sectoral and overarching risks and effects of algorithms and sharing knowledge about them, (ii) optimizing (existing) collaborations with colleges, market supervisors and state inspectorates, and mapping overarching supervision in the field of algorithms and AI and (iii) arriving at joint standard implementation and creating overview in legal and other frameworks (by means of guidance). The algorithm regulator cannot (yet) exercise specific investigative powers.
During 2023 it will be explored which steps need to be taken to establish a dialogue between (digital) regulators and which role the algorithm regulator should have in policy processes and emerging laws and regulations. More budget will be made available in 2024 and subsequent years allowing the regulator to further expand its activities.
The main task of the new regulator is strengthening and relieving the already existing regulators, without affecting existing powers and responsibilities of the existing regulators. The new regulator will identify cross-sector risks related to algorithms and AI and will share knowledge about them with the other regulators. It will also, in cooperation with already existing regulators, publish and share guidance related to algorithms and AI with market parties, clients and governments.
For the financial industry, this means that the algorithm regulator will also assist the AFM and DNB in supervising algorithms and AI used within financial markets and products. For the AFM, this relates to, among others, supervision of financial service providers, for example in the area of price comparison and algorithms interacting with each other. For the DNB, this relates to fintech governance, for example in the use of zip code for price differentiation in insurance or risk profiling. In time, we could expect these regulators to draft joint statements or guidance regarding the use of AI and algorithms within the financial industry.
The algorithm regulator does not answer individual questions about algorithms and automated decision-making of data subjects. This responsibility still lies with the already existing regulators equipped with such tasks such as the Dutch DPA, DNB and AFM.
Although the Dutch government has not yet decided which regulator will be designated nationally for the European AI Regulation, which is expected to be in force in the second half of 2024, the introduction of the new regulator does anticipate the upcoming regulation. It is currently not expected that the algorithm supervisor will be given specific enforcement powers in anticipation of this regulation just yet.