OpenAI Moves to Ireland to Reduce Regulatory Risk in the EU
OpenAI, the maker of ChatGPT, has announced a move to reduce regulatory risk in the European Union. In response to concerns about privacy and data protection, OpenAI has updated its terms and made its Dublin-based entity the data controller for users in the European Economic Area (EEA) and Switzerland. This change aims to comply with the General Data Protection Regulation (GDPR), a set of regulations that protect individuals’ privacy rights. By establishing a lead data supervisory in an EU Member State, OpenAI hopes to streamline privacy oversight.
The new terms of use will come into effect on February 15, 2024, and give OpenAI’s Dublin-based entity responsibility for processing personal data for users in the EEA and Switzerland. This shift in control allows OpenAI to benefit from the GDPR’s one-stop-shop mechanism, which enables companies processing Europeans’ data to have a single lead data supervisor. However, local privacy watchdogs still retain powers to intervene if they see urgent risks. OpenAI has been engaging with the Irish Data Protection Commission (DPC) and other EU data protection authorities to obtain main establishment status for its Dublin office.
In order to gain main establishment status under the GDPR, OpenAI’s Dublin-based entity will need to demonstrate that it has the expertise and legal structures necessary to influence decision-making around data processing. It is not just a matter of legal paperwork; the company needs to show that it can effectively protect privacy rights. If OpenAI obtains main establishment status in Ireland, it will join other tech giants like Apple, Google, Meta, TikTok, and X, which have made Dublin their home in the EU.
The move by OpenAI to shift its data controller role to its Dublin office is an important step towards complying with GDPR regulations and reducing regulatory risk in the EU. By streamlining privacy oversight and engaging with the Irish DPC, OpenAI aims to address concerns related to data protection. This change will have implications for ongoing investigations into ChatGPT’s data processing practices in Italy and Poland. While these investigations may shape future regulation, OpenAI’s move to establish its Dublin-based entity as the data controller may influence the direction of generative AI and privacy rights in the EU.
Source: OpenAI moves to shrink regulatory risk in EU around data privacy | TechCrunch
